SIE practice exam with complete solutions.

A customer writes an MMM January 70 put at 6. The maximum potential gain on this position is 600 Your customer is long 1 October 75 put at 2. The customer's maximum gain potential is 7300 Large time deposits of more than $100,000 are considered to be found in what part of the money supply? M3 By purchasing shares of stock in a company, investors can benefit from which of the following? An increase in the price of the shares An increase in price of the company's debt securities An increase in the yield of the company's outstanding debt securities The receipt of profits to be distributed An Increase in price of shares and The receipts of profit to be distributed An offering in which one or more stockholders in the corporation are selling all or a portion of their own shares to the investing public for the first time is known as a secondary offering Which of the following is an example of an unsecured debt security? Debenture Preferred stock Mortgage bond Income bond Debenture and Income bond Mutual funds that market directly to the public, using no underwriter and charging no sales charge, are called No load funds During the cooling-off period, underwriters of new securities may accept orders to purchase shares not accept orders to purchase shares not accept indications of interest regarding potential purchases of shares accept indications of interest regarding potential purchases of shares not accept orders to purchase shares and accept indications of interest regarding potential purchase of shares The USA PATRIOT Act's required Customer Identification Program is designed chiefly to prevent real estate fraud funding of terrorist activities use of insider information money laundering funding of terrorist activity and money laundering The firm element of a broker-dealer's continuing education requirement must be undergone by all registered persons who have direct contact with the public An August 15 call is written at 4. The call expires without being exercised by the owner. The writer of the call keeps the $400 received when the call was written A mutual fund can offer all of the following to investors EXCEPT physical custody of the fund's portfolio cash and securities In an LP, which of the following is TRUE? The partnership entity is not responsible for paying taxes on gains MAS Corporation has enjoyed an extremely profitable year. It has been determined that those owning the MAS 4% preferred, participating to 6% preferred shares, will receive the full participating dividend. The participating shareholders will receive an additional dividend of 2% A registered representative has a customer buying securities, but rather than paying in full, the customer wants to borrow some of the money needed for the purchase from the broker-dealer. It is explained to the customer that in order to borrow the money, there will be interest payable based on the broker call loan rate In the dividend disbursement process three of the four critical dates are determined by the board of directors but one is determined by either FINRA for OTC stocks or the exchange for listed stocks. Which one is it? ex dividend An investor owns 500 shares of stock whose current market value is $20 per share. The stock undergoes a split, after which the investor owns 400 shares. What is the new price of the investor's stock? $25 per share Listed options expire on the 3rd Friday of the expiration month A corporation has issued a single bond having successive maturity dates set from 2020 through 2030. This is known as what type of bond? Serial An investor discovers that exactly 2 years and 9 months ago, the investor was given fraudulent information on a security that prompted the investor to sell it. As a result, the investor lost money. How long does the investor have to bring action? 3 months While a branch office manager can initially approve an options account for trading, it must ultimately be approved by the firm's ROP A shareholders' meeting for ABC Corporation will take place in 8 days. A customer whose stock is being held in street name has not returned the proxy statements. Which of the following is TRUE? The member firm may vote the shares as it wishes on minor matters An investor owning 400 shares of CDS stock receives notice that the stock will be split. When the split is complete, the customer owns 600 shares of stock. The split must have been a forward, uneven split Each SRO functions under the SEC's oversight and is accountable to the commission for enforcing federal securities laws. While the MSRB regulates all matters related to the underwriting and trading of state and municipal securities, it does not have enforcement powers of its rules. Which of the following does the MSRB rely on for enforcement of these rules? Financial industry regulatory authority Under what circumstances could a broker-dealer firm share in a financial loss with a customer? If the loss was due to an error on the part of the firm Under the Uniform Transfers to Minors Act (UTMA) a custodian has control over the account and can do each of the following EXCEPT sell short and write uncovered call options An individual is solicited with a cold call made by a registered representative. He tells the representative he is not interested in this investment or in making any future investments. Which of the following actions is required by the Telephone Consumer Protection Act of 1991? No calls may be made to the prospect by anyone at the firm Which of the following are TRUE regarding mutual fund sales charges? They are used to defray fund expenses, such as operating costs and salaries. They are set by the fund's transfer agent. They are not an expense to the fund, but to the investor. They are used to compensate the fund's underwriter and sales representatives. They are not an expense to the fund, but to the investor and they are used to compensate the fund's underwriter and sales representatives An investor anticipates that a fall in interest rates is imminent. This investor, now wanting to purchase bonds in order to lock in interest income, would likely buy noncallable bonds