SIE PRACTICE EXAM REVIEW
A company has announced a tender offer for its shares at $50. The issuer wants to purchase a minimum of 100,000 shares, up to a maximum of 1,000,000 shares. If 80,000 shares are tendered, how much will an investor receive if he has tendered 1,000 shares?
$0
bond called at 103.75 how much does investor receive
$1,037.50 and accrued interest
A 55-year-old investor has earned $55,000 in pension income and $1,500 from a part-time job this year. How much can she contribute to her IRA?
$1,500
An 75-year old individual has contributed $40,000 to a qualified plan that currently has a value of $100,000. If she decides to take a lump-sum distribution of the total value, she is taxed on:
$100,000
What's the maximum contribution that can be made to a 529 plan without being subject to gift taxes?
$160,000 from a married couple if no additional contributions are made for the next five years.
If the bid price for a stock is 20.50 and the ask price is 20.60, a client who enters a market order to sell the stock will most likely receive:
$20.50 minus a commission A client who enters a market order to sell stock will generally receive the bid price minus a commission.
A customer opens a new margin account and her initial transaction is a short sale of 100 shares of XYZ at $16. What is her minimum deposit requirement?
$2000
VRDO characteristics
- floating interest rate, stated maturity, put ability
minimun denomination for a negotiable CD
100,000
what is $dollar paid on a T note quote of 105.24
105.24 24/32=.75 105.75% * 1,000 = $1,057.50
Keystone Chocolate Co. plans to sell, only in the state of Pennsylvania, shares of a new issue. In order to qualify for a registration exemption under Rule 147, what percentage of the corporation's assets must be located in Pennsylvania, and what percentage of its revenues must be derived from Pennsylvania sources, at the time of the offering?
80%
Us gov bond selling at 95.28 what is the dollar value
=$958.75 because T bonds are quoted = 95 28/32 = 95.875
A customer wants to transfer her annuity investment from a fixed annuity to the growth and income separate account of the ABC variable annuity. Which of the following steps should be taken?
A Section 1035 exchange should occur
A client is short stock that's trading at $35.00 and wants to buy, but only if he can buy at $34.00 or lower. He should place which of the following orders?
A buy limit
Which of the following entities is considered an eligible purchaser for a Rule 147 offering?
A corporation that has its principal office located in the state of the offering
An individual who is considering the purchase of closed-end fund shares would pay:
A market price as determined by the supply and demand for the shares
What strategy is the portfolio manager of a mutual fund employing when call options are being sold on stock that's held in the portfolio?
A neutral strategy that's considered a conservative means of generating income when prices are stable.
Which of the following statements is TRUE concerning the opening of a cash account?
A principal of the firm must sign the new account form.
Which of the following securities are required to be registered under the Securities Act of 1933?
American Depositary Receipts (ADRs)
An accumulation unit in a variable annuity contract is:
An accounting measure used to determine the contract owner's interest in the separate account
Which of the following statements are TRUE regarding a margin account?
An extension of time cannot be granted to meet a maintenance call.
If a customer purchases shares of one stock and sells short shares of another stock, how can she settle these transactions?
By executing both transactions in a margin account and depositing the required cash for both transactions.
Which of the following is a characteristic of a Roth IRA?
Contributions are made in after-tax dollars.
Which of the following choices would NOT be subject to the holding period restriction under Rule 144?
Control stock acquired through an open-market purchase
The investment banking department of a broker dealer is generally involved in which of the following activities?
Coordinating the offering of securities between the issuer and investors to raise capital.
Who does SIPC cover
Covers separate customers
NASAA role
Create rules, laws and exam practices for states
Which of the following may be subject to a capital call?
DPPs
An over-the-counter trader, when talking about the spread, is referring to the:
Difference between the bid and asked price of a stock at the current market
Which of the following statements is NOT TRUE of a Coverdell Education Savings Account?
Distributions can only be made for higher education expenses.
narrowest measure of market
Dow Jones industrial average
Which of the following investments generally distributes dividends and capital gains, mirrors a securities index, and can be purchased on margin?
ETF
A customer buys an IBM call option and pays a 2.50 point premium. The aggregate dollar amount paid is:
Each option contract is based on 100 shares of common stock. The dollar amount paid is $250 ($2.50 x 100 shares).
Who enforces municipal securities violation penalties for BD's?
Enforced by SEC or FINRA
A fee-based account is most suitable for customers who:
Engage in frequent trading
SPDR is considered a type of:
Exchange-traded fund Standard & Poor's Depositary Receipt (SPDR) is a type of exchange-traded fund (ETF). It can be used to refer to a specific exchange-traded fund that tracks the S&P 500 or a group of ETFs.
A customer has placed a market order with a broker-dealer. The broker-dealer must:
Execute at the most reasonable price available
If an investor expects a sharp increase in a stock's price, which of the following will be the most profitable?
Exercise rights
bank savings account insured by
FDIC
SIPC does not cover
Futures and commodity positions
When warrants are issued, the exercise price is:
Higher than the current market price of the stock
A broker-dealer's anti-money laundering (AML) compliance program must be approved:
In writing by a member of senior management
MSRB rules do not apply to
Issuers
Which of the following statements concerning a tax-qualified annuity is TRUE?
It has a zero cost basis and grows tax-deferred
Which of the following statements is NOT TRUE regarding a private placement?
It is usually a very liquid investment
Which of the following statements is TRUE regarding Form 10-K?
It must be filed at the end of an issuer's fiscal year.
For variable annuities, which of the following payout options provide the highest payout?
Life annuity
What type of order is used if a customer wants to sell stock at $25 although the stock is currently trading at $20?
Limit order
If an investor writes (sells) a covered call, what are the potential profit and loss outcomes?
Limited profit and limited loss
An investor is interested in selling 500 shares of her listed REIT. The sale will be handled in a manner that's similar to the:
Liquidation of a stock on the NYSE
An individual is short XYZ stock. Which of the following options will provide him with protection?
Long an XYZ call
A husband and wife have a joint account with right of survivorship. If one of the parties places an order, the RR:
May accept the order
A customer gives his registered representative the following instructions. Buy 100 shares of General Motors whenever you think the price is right. Under current regulations, the order:
May be accepted and may be executed anytime that day
The purchase price of a no-load fund is determined by the:
NAV
when redeeming shares of open end funds investors receive
NAV calculated after order sent
Which of the following statements is TRUE regarding the approval of an official statement?
Official statements are not required to be approved by a regulator.
Premature withdrawals of earnings from an IRA that qualify for an exception are subject to:
Ordinary income taxes on the amount withdrawn, but not a 10% tax penalty on that same amount
If a customer wants to open an account to trade options, the account must be approved:
Prior to the time the initial order is accepted
A variable annuity contract holder dies during the accumulation period. Which of the following is TRUE regarding the tax consequences?
Proceeds in excess of cost are taxable as ordinary income to the beneficiary.
The 5% markup policy applies to a:
Proceeds transaction
What feature is shared by both Roth IRA and Roth 401(k) plans?
Qualified distributions from both are excluded from federal income tax.
A unit investment trust (UIT):
Represents an undivided interest in a fixed account ( Unit investment trusts (UITs) sell shares of beneficial interest (SBIs) that represent an undivided interest in a fixed portfolio of securities. UITs typically assess an initial sales charge (load) along with operating fees. Since UITs are non-managed investment companies, they don't include management fees.)
All of the following statements are TRUE about closed-end investment companies, EXCEPT that the:
Shares may not sell below the current net asset value, The market price of the shares can be at, above, or below the net asset value. Closed-end investment companies have only one issue of shares.
The fund that would probably have the least price volatility is a(n):
Short-term corporate bond fund , NAVs of short-term bond funds are considerably less volatile than long-term bond funds whether corporate or municipal.
when does stock sell divvy price
Stocks sell ex-dividend on the first business day preceding the record date
A type of order that becomes a market order when a round-lot trades at or through a particular price is called a:
Stop order
An order that becomes a market order when it sells at or below (or at or above) a particular price is called a:
Stop order
The person who distributes interest in a DPP is referred to as the:
Syndicator
When do options trades settle?
T + 1
A quote of 5.90 - 5.75 is a quote for which of the following securities?
T - Bills
Which of the following statements is NOT TRUE about Forms 10-K and 10-Q?
The 10-K contains financial information, while the 10-Q contains voting information.
A customer requests that a broker-dealer sell stock that she owns and, at the same time, use the proceeds of the sale to purchase a different stock. For this transaction:
The broker-dealer is permitted to charge a markup on both transactions, but is required to compute the markup based on the amount of money involved in the sale to the customer
As it relates to money laundering, which of the following choices best describes structuring?
The client makes small deposits to evade AML reporting thresholds.
When determining the suitability of the recommendation of a 529 college savings plan, which of the following should a registered representative consider?
The deductibility of contributions from state income taxes
A customer has a variable annuity and wants to transfer from the XYZ growth separate account to the ABC growth separate account. To do this, who should the customer contact? QID: 3569884 Mark For Review
The insurance company that sponsors her account
Which of the following is found in a preliminary prospectus?
The number of shares being issued
Which of the following statements is NOT TRUE about selling stock short?
The short seller will receive any dividends that are paid while she is short the stock.
In order for the sale of stock from a joint account to be considered good delivery:
The stock power must be signed by all of the owners
Which of the following statements is TRUE concerning member firms' suitability requirements for institutional investors?
The suitability requirements are less stringent than those of retail accounts
Which of the following choices is a violation of federal laws with regard to tender offers?
The tender of stock in a short margin account that has been borrowed by a customer
Which of the following statements is TRUE regarding trustee-to-trustee IRA transfers?
There is no limit to the number of transfers per year.
Which of the following descriptions characterizes leveraged exchange-traded funds (ETFs)?
They are designed to deliver a multiple of the performance of an index or other benchmark
Which of the following statements is TRUE concerning registered nontraded real estate investment trusts (REITs)?
They are required to distribute the same percentage of taxable income as exchange-traded REITs
An investor is selling 400 shares of ABC stock. The client delivers four 90-share certificates and one 60-share certificate. According to the good delivery rules:
This does not constitute good delivery
A mother wants to gift money to her son. If she doesn't want the son to be able to use the money for living expenses, which of the following accounts is the most beneficial?
Trust account
Which investment company does NOT charge a management fee?
UIT
When a stock splits 5 for 4, by what percentage will the price of the stock be reduced?
When a stock splits 5 for 4, the price will be 4/5 of its original price. This represents a decrease of 1/5 or 20%. The number of shares that an investor owns will increase by a ratio of 5/4, which represents an increase of 1/4 or 25%.
largest measure of market size index
Wilshire associates equity index
asset backed securities
backed by consumer loans, therefore subject to prepayment risk
an example of a collateralized time draft
bankers acceptances
for bond owner call protection is valuable when
bond prices increase
All of the following are offered by an issuing corporation, EXCEPT:
call options
warrants
can be perpetual
FDIC provides coverage for
certificates of deposit CD's
what type of stock is suitable for someone who wants growth
common stock
Probate fees
costs are associated with establishing the validity of a will, which is not a disclosure item for annuities. However, surrender, mortality, and administrative fees must be disclosed
strike price
exercise price on warrant higher than market price of stock
investment advisor act 1940 regulates
fee charged by IA (or Excluded IA) for providing advice concerning securities
treasury bonds have what type of liquidity
high liquidity
Who is responsible for creating the official statement for a municipal bond offering?
issuer
An investor buys T-bonds on Friday, January 16 for cash settlement. This transaction will settle on:
jan 16th
In which of the following types of accounts can an uncovered call writing strategy be executed?
margin accounts
Secured bondholder ex
mortgage bondholders
The Bond Buyer Index is based on which of the following securities?
municipal bonds
preferred dividends must?
must be settled before common dividends
Fanny Mae (FNMA)
not backed by credit of US gov
Freddie Mac (FHLMC)
not backed by credit of US gov
Which of the following is NOT a benefit of investing in a real estate investment trust (REIT)?
passive losses
stable portfolios consist of
short term bonds
The value of the conversion feature on a convertible bond is determined by:
stock price
Which of the following statements concerning ETFs is TRUE?
these funds' values may fluctuate throughout the trading day.
when YTM<coupon rate
trading at premium
international equity funds
very volatile
securities ranked from longest to shorten life
warrants, options, rights
