FINRA
FINRA SIE
SIE EXAM
EXAM – 2025/2026 EDITION
2026 EDITION 100% – 100%
CORRECT ANSWERS FOR FULL EXAM PREPARATION
If interest Rates fall the issuer will most likely call which bonds first? -
ANSWER-High Dividend Rate preferred issues trading at a premium
What are some actions by a corporation will affect an individuals
common shareholder's equity -ANSWER-Conversion of convertible
preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must be voted on
because it effects Par Value)
Benefits to a Convertible stock compared to a regular debenture -
ANSWER-Convertible stock will have a slightly lower yield than non-
convertible however it will raise in value as the market price of common
stock rises
What traits do preferred stock and bonds have in common? How are they
different? ANSWER-Can be callable by issuer, both have periodic
payments. Both are senior securities to common stock.
Neither have voting rights
Preferred is paid dividends on a percentage of face value much like the
yield of a bond.
Preferred stock has no maturity date and can be held perpetually while
bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a declared
dividend has been issued to common stock
Payments to bond holders are mandatory
,When are common dividends declared and paid? -ANSWER-Quarterly for
both
A customer owns 256 shares of ABC common stock. ABC declares a rights
offering, with the terms being that for every 15 rights a shareholder may
purchase one additional share.at $24 a share. Any fractional rights may
be rounded up to buy an additional share.
How many shares may the customer buy with these right? -ANSWER-A
share holder can buy a maximum of 18 shares with these rights paying
$432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10% of the value of
an XXYZ ordinary share. The ordinary shares trade on the London Stock
Exchange, where the current price is 400 British Pounds (BP). The current
exchange rate for the British Pound against the US Dollar is $1.40. The
ordinary share pays an annualized dividend of 12 BP. The XXYZ ADR is
listed on the NYSE. If a customer places an order to buy $560,000 of the
ADR on the customer will buy how many shares of the ADR? -ANSWER-
10,000 Shares with $560.,000 Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on what?
Performance of stock?
Inflation?
Interest rates? -ANSWER-Interest Rates is the correct answer, remember
that preferred stock is much like a bond in that it has fixed payments and
is considered fixed income.
, Long term market interest rate levels determine the valuation.
Rights are? -ANSWER-Exerciserable, Negotiable (can be traded), Giftable
Dividends can be paid in the form of? -ANSWER-Cash or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? -ANSWER-Performance based, participating,
cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and credit of the
issuer.. -ANSWERDebenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
2) Treasury Bills
3) Prime Commercial Paper
4) Prime Banker's Acceptances -ANSWER-3) Prime commercial paper is
not traded by the Federal Reserve therefore does not settle in Fed
Funds
Prime Banker's Acceptances, T Bills, T Bonds, are all settled in Fed Funds
All of the following are sources of income that can be used to service debt
on municipal revenue bonds Except?
1) Toll Fees
2) Park Fees
FINRA SIE
SIE EXAM
EXAM – 2025/2026 EDITION
2026 EDITION 100% – 100%
CORRECT ANSWERS FOR FULL EXAM PREPARATION
If interest Rates fall the issuer will most likely call which bonds first? -
ANSWER-High Dividend Rate preferred issues trading at a premium
What are some actions by a corporation will affect an individuals
common shareholder's equity -ANSWER-Conversion of convertible
preferred stocks or bond
Repurchase of common shares
Issuance of additional common shares
(Stock splits do not effect shareholders equity but it must be voted on
because it effects Par Value)
Benefits to a Convertible stock compared to a regular debenture -
ANSWER-Convertible stock will have a slightly lower yield than non-
convertible however it will raise in value as the market price of common
stock rises
What traits do preferred stock and bonds have in common? How are they
different? ANSWER-Can be callable by issuer, both have periodic
payments. Both are senior securities to common stock.
Neither have voting rights
Preferred is paid dividends on a percentage of face value much like the
yield of a bond.
Preferred stock has no maturity date and can be held perpetually while
bonds have a set maturity date.
Payments to preferred stock are not mandatory unless a declared
dividend has been issued to common stock
Payments to bond holders are mandatory
,When are common dividends declared and paid? -ANSWER-Quarterly for
both
A customer owns 256 shares of ABC common stock. ABC declares a rights
offering, with the terms being that for every 15 rights a shareholder may
purchase one additional share.at $24 a share. Any fractional rights may
be rounded up to buy an additional share.
How many shares may the customer buy with these right? -ANSWER-A
share holder can buy a maximum of 18 shares with these rights paying
$432 for them.
The 17.06 shares may be rounded up to 18.
XXYZ ADR (American Depository Receipt) represents 10% of the value of
an XXYZ ordinary share. The ordinary shares trade on the London Stock
Exchange, where the current price is 400 British Pounds (BP). The current
exchange rate for the British Pound against the US Dollar is $1.40. The
ordinary share pays an annualized dividend of 12 BP. The XXYZ ADR is
listed on the NYSE. If a customer places an order to buy $560,000 of the
ADR on the customer will buy how many shares of the ADR? -ANSWER-
10,000 Shares with $560.,000 Explanation
400 BP x $1.4 = 560
$560, BP/share = 10,000 Shares of XXYZ
Preferred Stock market valuation is based primarily on what?
Performance of stock?
Inflation?
Interest rates? -ANSWER-Interest Rates is the correct answer, remember
that preferred stock is much like a bond in that it has fixed payments and
is considered fixed income.
, Long term market interest rate levels determine the valuation.
Rights are? -ANSWER-Exerciserable, Negotiable (can be traded), Giftable
Dividends can be paid in the form of? -ANSWER-Cash or products
Additional shares of ANOTHER company (yes another company)
Additional shares of that company
NOT Options and Not Tax deferments
Preferred Stock is? -ANSWER-Performance based, participating,
cumulative (dividends)
It is not refundable or redeemable
A corporate bond which is backed solely by full faith and credit of the
issuer.. -ANSWERDebenture
Trades of all of the following will settle in Fed Funds Except?
1) US Treasury Bonds
2) Treasury Bills
3) Prime Commercial Paper
4) Prime Banker's Acceptances -ANSWER-3) Prime commercial paper is
not traded by the Federal Reserve therefore does not settle in Fed
Funds
Prime Banker's Acceptances, T Bills, T Bonds, are all settled in Fed Funds
All of the following are sources of income that can be used to service debt
on municipal revenue bonds Except?
1) Toll Fees
2) Park Fees
