SIE Practice Exam 2022 with complete
solution
Which corporate voting procedures entitles a shareholder to one vote per share, and
votes must be divided evenly among the candidates being voted on?
Statutory voting
What market refers to the trading of exchange-listed securities in the over-the-counter
market? These trades allow institutional investors to trade blocks of securities directly,
rather than through an exchange, providing liquidity and anonymity to buyers.
Third market
An investor sells a naked call on Omikron for a $250 premium. What is true regarding
the investors position?
The investor's potential loss is unlimited
Which act created the SEC and empowered it with broad authority over all aspects of
the securities industry?
Securities Exchange Act of 1934
A free tool provided by FINRA that is intended to help consumers research the
professional backgrounds of brokers and brokerage firms, as well as investment advisor
firms and advisors?
BrokerCheck
The Federal Reserve Board performs what actions?
It sets monetary policy, but does not set tax policy
An offering of shares to existing stockholders on a pro-rata basis is called a
Rights offering
The difference between a bond's price and the conversion parity price is referred to as
conversion premium
An individual who meets what criteria must register as an investment adviser?
The individual provides advice or analyses concerning securities
The individual is in the business of providing investment advice
The individual provides investment advice for compensation
A type of preferred stock that gives the investor the right to receive dividends equal to
the normally specified rate, as well as an additional dividend based on a specific
predetermined condition is called a
participating preferred stock
Profit sharing plans have what characteristic?
they can be invested entirely in company stock
What is true regarding the Central Registration Depository (CRD)?
It was developed by NASAA and the NASD
It consolidated a multiple paper-based state licensing and regulatory process into a
single, nationwide computer system
Its computerized database contains the licensing and disciplinary histories on more than
650,000 securities professionals and 5,200 securities firms
, Who is responsible for maintaining fair and orderly markets for an assigned set of listed
firms? They operate both manually and electronically to facilitate price discovery during
market opens, closes, and during periods of trading imbalances and instability.
Designated Market Makers
If real GDP declined the last 3 quarters, how many more consecutive quarters of decline
would be needed to be classified as an economic depression?
3 quarters
What is a correct reason to purchase a particular investment for a client's portfolio?
Blue chip common stocks because they provide a hedge against inflation
An unconditional promise to pay a sum of money to a payee, either at a fixed or
determinable future time, under specific terms is called a
Promissory note
A trade surplus results from
a country exporting more than it imports
William, age 56, recently retired from Epsilon Inc., and would like to take a distribution
from a retirement plan to pay for medical expenses. What plan would allow William to
take a penalty free withdrawal?
401(k) from Epsilon Inc
Match the state of the business cycle with the description that follows for questions 19-
22
A. Trough
B. Expansion
C. Contraction
D. Peak
_______ Recession
contraction
_________ Utilization at its lowest level
Trough
_______ Recovery
Expansion
________ GDP at its highest point
Peak
All are characteristics of a REIT EXCEPT
it is a publicly traded open-end investment company
(it is closed-end)
What can an investor sign which allows him or her to receive breakpoint discounts
based upon a commitment to buy a specified number of mutual fund shares over a
period of time, usually 13 months
Letter of intent
What is a type of exchange rate system in which a country ties its currency to a basket
of other currencies or to another measure of value, such as gold?
Fixed exchange rate system
What will result if money distributed from a 529 plan is not used to pay for qualifying
education expenses?
solution
Which corporate voting procedures entitles a shareholder to one vote per share, and
votes must be divided evenly among the candidates being voted on?
Statutory voting
What market refers to the trading of exchange-listed securities in the over-the-counter
market? These trades allow institutional investors to trade blocks of securities directly,
rather than through an exchange, providing liquidity and anonymity to buyers.
Third market
An investor sells a naked call on Omikron for a $250 premium. What is true regarding
the investors position?
The investor's potential loss is unlimited
Which act created the SEC and empowered it with broad authority over all aspects of
the securities industry?
Securities Exchange Act of 1934
A free tool provided by FINRA that is intended to help consumers research the
professional backgrounds of brokers and brokerage firms, as well as investment advisor
firms and advisors?
BrokerCheck
The Federal Reserve Board performs what actions?
It sets monetary policy, but does not set tax policy
An offering of shares to existing stockholders on a pro-rata basis is called a
Rights offering
The difference between a bond's price and the conversion parity price is referred to as
conversion premium
An individual who meets what criteria must register as an investment adviser?
The individual provides advice or analyses concerning securities
The individual is in the business of providing investment advice
The individual provides investment advice for compensation
A type of preferred stock that gives the investor the right to receive dividends equal to
the normally specified rate, as well as an additional dividend based on a specific
predetermined condition is called a
participating preferred stock
Profit sharing plans have what characteristic?
they can be invested entirely in company stock
What is true regarding the Central Registration Depository (CRD)?
It was developed by NASAA and the NASD
It consolidated a multiple paper-based state licensing and regulatory process into a
single, nationwide computer system
Its computerized database contains the licensing and disciplinary histories on more than
650,000 securities professionals and 5,200 securities firms
, Who is responsible for maintaining fair and orderly markets for an assigned set of listed
firms? They operate both manually and electronically to facilitate price discovery during
market opens, closes, and during periods of trading imbalances and instability.
Designated Market Makers
If real GDP declined the last 3 quarters, how many more consecutive quarters of decline
would be needed to be classified as an economic depression?
3 quarters
What is a correct reason to purchase a particular investment for a client's portfolio?
Blue chip common stocks because they provide a hedge against inflation
An unconditional promise to pay a sum of money to a payee, either at a fixed or
determinable future time, under specific terms is called a
Promissory note
A trade surplus results from
a country exporting more than it imports
William, age 56, recently retired from Epsilon Inc., and would like to take a distribution
from a retirement plan to pay for medical expenses. What plan would allow William to
take a penalty free withdrawal?
401(k) from Epsilon Inc
Match the state of the business cycle with the description that follows for questions 19-
22
A. Trough
B. Expansion
C. Contraction
D. Peak
_______ Recession
contraction
_________ Utilization at its lowest level
Trough
_______ Recovery
Expansion
________ GDP at its highest point
Peak
All are characteristics of a REIT EXCEPT
it is a publicly traded open-end investment company
(it is closed-end)
What can an investor sign which allows him or her to receive breakpoint discounts
based upon a commitment to buy a specified number of mutual fund shares over a
period of time, usually 13 months
Letter of intent
What is a type of exchange rate system in which a country ties its currency to a basket
of other currencies or to another measure of value, such as gold?
Fixed exchange rate system
What will result if money distributed from a 529 plan is not used to pay for qualifying
education expenses?
