SIE Practice Exams: Missed Questions

Control Person (insider)

(1) A director or an officer of an issuer. (2) A stockholder who owns more than 10% of any class of a corporation's outstanding securities. (3) Spouse or other immediate family of any of the previous. See insider. control persons are always subject to volume limits

watch for questions asking about opening a position and then closing it later without saying if it is a buy or sell

**** that

Penny stock rules

-specify established customers need not sign a suitablility statement - mandate that an account with only penny stocks -doesnt need to be provided with a monthly statement

currency transaction reports must be held for...

5yrs

street name

A brokerage account or bank or dealer where securities are held on behalf of a purchases

Listed option transactions settle

T+1

Regarding purchases on margin, which of the following is TRUE?

Warrants can be purchased on margin, but rights cannot.

A broker-dealer firm managing an IPO wishes to give a gift to an associated person of one of the selling group members. Which of the following would be an unacceptable gift under the rules?

anything greater than $100 that does not have business purpose (including merch w logos)

Which of the following funds would most likely fall the most in a rising interest rate environment?

bond funds would fall the most because they have the longest duration; meaning they are more sensitive to interest rate changes and if rates are going up then the price of the bond fund will fall

An investor having no affiliation with CDS Company has just purchased shares that were sold subject to Rule 144. This investor

buyers of stock being sold subject to rule 144 are not subject to any restrictions

Under Rule 144, which of the following sales are subject to volume limitations on the number of shares sold?

control person selling registered stock for 1yr control person selling registered stock for 2yrs

As long as it is not restricted in any documentation, margin trading is permissible in which of the following accounts?

corporate and partnership

what can a fully disclosed firm do?

fully disclosed means they can clear buy and sell orders

Closed-ended funds

fund that issues fixed number of shares and is impacted by daily supply and demand forces

`shelf registration characteristics

good for 2 years; requires supplemental prospectus to be filed before each sale

The Investment Company Act of 1940 defined the term, "investment company." Which of the following is NOT included in that term?

hedge fund

non-cumulative preferred stock dividends

if stopped, are lost forever.

Limited partnerships sold publicly via a prospectus offering would be expected to have

large group of investors each contributing a small sum; LPs are offered publicly via prospectus

In left unexecuted, a good til cancel (GTC) order will automatically be canceled when?

last business day of april or october

An applicant for registration was convicted of a misdemeanor within the past 5 years having to do with a motor vehicle driving infraction. For purposes of filing Form U-4 for registration with a member firm, the applicant

non-security related misdemeanors do not need to be reported & will not subject persons to staturoy disqualification

A bank is likely to do which of the following when the Federal Reserve Board (FRB) tightens the money supply?

raise its prime rate

While a branch office manager can initially approve an options account for trading, it must ultimately be approved by

registered options principal (ROP)

Failure to complete the regulatory element continuing education requirement within the allotted time period will result in

registration being deactivated until requirements are met

Correspondent firms would be likely to have relationships with which of the following types of broker-dealers?

self clearing

All of the following actions must be completed before a customer enters the first option order EXCEPT

signing of an options agreement; this has to be done within 15 days of account approval

nd to broker-dealers for the purpose of lending money for margin loans is typically

slightly above other short term rates

what entity's services are not required in an IPO

stock exchange

maximum potential loss when shorting a put

strike - premium * contracts premium is collected as you sold the put

prime rate

the lowest rate of interest at which money may be borrowed commercially. charged to banks best customers

If the beneficiary of a custodian account dies, the securities in the account pass to the

the minors estate

A client has just purchased a ZZZ June 35 call @ 8 when the stock is trading at 41. What is the contact's premium?

the premium will be made up of intrinsic value and time value; this option is 6 points into the money and the remaining two points must be a function of time value

what is not included in a final prospectus?

the underwriting contract and all of the underwriters names

what is unique about treasury bills

they are the only UST securities without a stated interest rate

what do open & closed end funds have in common

they both pay dividends when declared

Associated persons or registered representatives who want to work outside of their existing employment with their current broker-dealer may do so if they provide prior written notice to the member. In which of the following would notice not be required?

they will be extensively involved in fundraising for a charitable foundation

when would a company call a callable bond

they would call it when interest rates are falling so they can reissue at the new, low rate

Rule 144

those who are in possession of restricted shares must wait 6mos before selling and are subject to volume restrictions for as long as they are affiliates

At a shareholders' meeting, a mutual fund investor might be called upon to vote on any of the following EXCEPT

voting on BOD and selling stock out of portfolio; major decisions

nominal yield

yield set at time of issuance