SIE Progress Exam Quizzes

An annuitant is receiving payments from a variable annuity and, at the time of his death, his beneficiary receives a lump-sum payment. The annuity payout option is:

unit refund life annuity

A type of bond in which the amount of interest paid to the investor may change is referred to as a:

variable rate bond

While saving for her retirement, a variable annuity owner investing $1,000 per month will buy a:

varying number of accumulation units

When selling limited partnership interests, a registered representative is NOT required to:

certify that the customer is an institution

Which of the following investments is the MOST suitable for a person who is interested in aggressive growth?

common stock

The beneficial owner of stock held in street name is the:

customer

A 5% $1,000 par value bond sells at $900 and is maturing in 10 years. What is the amount of interest per year?

$50

A U.S. government bond is selling in the market at 95.28. The dollar value of this bond is

$958.75 (28/32 + 95 x 10)

What is the typical maturity for an ETN?

10 to 30 years

A customer enters a sell stop-limit order for 100 shares at 18.50. The last round-lot sale that took place before the order was entered was 18.88. Round-lot sales that took place after the order was entered were at 18.60, 18.25, 18.38, 18.50, and 18.63. The execution price is:

18.50

The federal securities regulation that provides rules for the secondary market is

1934

A convertible bond has a conversion price of $40 and is currently selling in the market at $950. The conversion ratio is:

25

What is the maximum coverage afforded to an investor under SIPC?

500,000 per customer and 250,000 of that 500,000 can be in cash

An individual may roll over a lump-sum distribution from a corporate pension plan to an IRA without tax consequences if it is done within:

60 days

A bond with a 6% coupon is priced at a 7.20 basis. If the bond's yield-to-maturity increases by 40 basis points, the yield would be:

7.60

A REIT will receive preferential tax treatment if it distributes at least what percentage of its income to shareholders?

90%

What is the market outlook for the sellers of call options?

Bearish

State securities laws are also referred to as:

Blue sky laws

The FDIC provides coverage for:

CDs

Which of the following choices is an exempt security?

Commercial paper with a maturity of 30 days

Which of the following choices does NOT hold customer cash or securities?

DTC

A brokerage firm purchases 600 shares of stock from a customer and places the securities into its inventory. In this case, the firm likely acted as a(n):

Dealer

Banks savings account are guaranteed and insured by the:

FDIC

Which of the following organizations enforces municipal securities regulations for broker-dealers?

FINRA

Which of the following statements is TRUE about the SEC Customer Protection Rule?

If a client sells securities and fails to deliver them within 10 business days of the settlement date, the broker-dealer must buy-in the customer

A registered representative is permitted to contact a person whose name is on the national Do Not Call List:

If the person has provided prior written consent to be contacted

On Wednesday, March 11, a customer purchases 1,000 shares of an OTC equity security in a cash account through an online brokerage firm. The transaction will settle:

March 13th

An investor asks a registered representative to underline the most important facts found in a preliminary prospectus. The registered representative:

May not do this since it violates federal securities laws

A customer wishes to open an account with a brokerage firm to trade options. The customer provides all the necessary new account information required but refuses to provide financial information. The brokerage firm:

Must record the customer's refusal on its records and use whatever information it can obtain on its own in determining whether it should accept the account for options trading

Who creates the Options Disclosure Document?

OCC

A corporation wants to offer its shareholders the ability to obtain shares at a fixed price. Which security should the corporation issue?

Rights

Which of the following regulates the resale of restricted securities?

Rule 144

For T-bonds, regular way settlement is on:

T+1

Which of the following statements is TRUE concerning electronic communication networks (ECNs)?

They help people who want to trade anonymously

In an equity offering, what's the function of a syndicate desk?

To create an order book and allocate the stock to investors

Which of the following securities trades in fractional units of 1/32 of a point?

Treasury Bills

Which bonds are considered the most liquid?

Treasury Bonds

Which of the following securities trades in fractional units of 1/32 of a point?

Treasury Bonds

As far as variable annuities are concerned, which of the following statements is TRUE?

Variable annuity nonqualified separate accounts are registered under the Investment Company Act of 1940

Which of the following securities has the longest period until expiration?

Warrants

If a stock is sold before the ex-dividend date, but delivered after the record date, it must be accompanied by:

a due bill

A hedge fund would NOT be a suitable investment for an investor seeking to:

access her funds

A common shareholder is not entitled to:

appoint officers

Although most bonds are traded according to their maturity dates, which of the following investments are traded according to their average life?

asset-backed securities

Which of the following statements is TRUE regarding preemptive rights?

belong to common stockholders

An individual is short XYZ stock. Which of the following options will provide him with protection?

buy (LONG) a xyz call

When a bond is called, the bondholder receives the:

call price + any accrued interest

An issuer includes warrants with a bond offering that it's conducting. This is done to:

decrease interest rate payments it has to pay for its bonds

If a municipal bond is backed by the revenues of a facility and the income is insufficient to make the debt service payment, which of the following statements is TRUE?

default

A fund which invests in companies that pay high dividends is:

equity income fund

Preemptive rights give a stockholder the right to:

maintain their level of ownership in the company

The purpose of a depository facility is to:

hold securities in book-entry form

How long is a broker-dealer required to keep a customer on its "Do-Not-Call" list?

indefintely

QIBS are not

individuals

When purchasing Treasury notes, an investor should understand:

interest is paid semi-annually

A bond is selling at a premium. This indicates that:

interest rates decreased

A decrease in which of the following would cause the price of a bond to increase?

interrest rates

A financial services firm that charges customers based on a percentage of the assets under management is BEST defined as:

investment adviser

An advantage a corporation receives when it issues a convertible bond is that:

it's able to borrow money at a lower rate

The major disadvantage to a limited partner in a direct participation program (DPP) is:

lack of liquidity

An advantage of buying shares of an index mutual fund is that:

lower management fees

Which term is used for a member of a stock exchange that's responsible for providing liquidity by buying and selling throughout the trading day?

market maker

Immediately prior to the effective date of an underwriting, an adverse event occurs that causes a sharp decline in the price of the stock. Which of the following clauses permits the underwriter to withdraw without a penalty?

market out

The Bond Buyer Index is based on which of the following securities?

municipal bonds

For an unregistered private placement of a real estate partnership, what document provides investors with the required disclosures?

offering memorandum

A primary offering of securities is being made for a company listed on the NYSE. Prospectuses must be delivered:

only on purchases made at the public offering price

Which of the following items is NOT found on a sell order ticket?

original purchase price

Which of the following sources of revenue is NOT used to pay the debt service on general obligation bonds?

tolls

A customer of a broker-dealer has not executed a trade in the past 18 months. If the customer's account currently shows $30,000 in cash and $250,000 of securities, how often does the firm need to send her an account statement?

quarterly

How often do Treasury notes pay interest to investors?

semiannually

closed end fund shares to customers are

share + commission

If an investor wants to build a bond portfolio that maintains a stable value, she should purchase bonds with:

short maturities

Which of the following objectives is the least suitable reason for investing in a mutual fund?

short term trading

What type of bond would MOST likely be secured by an excise tax, cigarette tax, or gasoline tax?

special tax bond

A vote of the common shareholders is required for a corporation to declare a:

stock split

What is the breakeven point for the buyer of a call option?

strike price + the premium

Interest on U.S. Treasury securities is:

subject to federal tax but, exempt from state tax

Which of the following features applies to a variable annuity, but not to a mutual fund?

surrender charge

A client is interested in determining the expense ratio of a mutual fund. Which of the following actions is the MOST appropriate for a registered person to take?

tell the guy he can find the info on the prospectus