SIE Exam Missed Questions

An individual purchased 100 shares of stock at $35 per share. The stock is now trading at $44 per share and the issuer decides to split the stock 2-for-1. After the split, the individual's cost basis per share will be: A) $17.50 B) $22.00 C) $44.00 D) $35.00

A) $17.50

A convertible bond has a conversion price of $50 and is currently selling in the market at $1,100. The conversion ratio is: A) 20 B) 22 C) 55 D) 50

A) 20

An investor purchases a 20-year 5.30% bond at par value that will yield 5.75% if called at the first call date in five years. The yield to maturity on the bond is: A) 5.30% B) More than 5.30% C) Between 5.30% and 5.75% D) 5.75%

A) 5.30%

Jamie has inherited 500 shares of an investment company. She calls her broker to redeem the shares and is informed that the kind of investment company she owns makes no provision for future purchases or redemptions. What kind of investment company does she own? A) An open-end fund B) A closed-end fund C) A unit investment trust D) A face-amount certificate company

A) Close Ended fund

Which of the following statements BEST describes exchange-traded notes (ETNs)? A) ETNs are debt instruments linked to the performance of a commodity, currency, or index B) ETNs are equity securities that pay a large dividend C) ETNs are mutual funds that invest in debt instruments D) ETNs are equity securities that represent ownership of a securities exchange

A) ETNs are debt instruments linked to the performance of a commodity, currency, or index

An investment company that is purchased in installments and that matures at a fixed-dollar amount is called a: A) Face-amount certificate company B) Unit investment trust C) Variable annuity contract D) Management company

A) Face-amount certificate company

Who is responsible for creating the official statement for a municipal bond offering? A) The issuer B) Bond counsel for the issuer C) The underwriting syndicate D) Bond counsel for the underwriting syndicate

A) The issuer

Who has the responsibility to investigate the accuracy of the information in a prospectus for a DPP? A) The managing underwriter B) FINRA C) The IRS D) The SEC

A) The managing underwriter

Government-sponsored enterprise securities are comparable to direct government obligations with regard to all of the following statements, EXCEPT: A) They trade in the over-the-counter market B) All are government guaranteed C) Short-term securities are quoted on a discount yield D) Long-term securities are quoted as a percentage of par

B) All are government guaranteed

Which of the following persons can a registered representative either make a loan to or borrow money from without providing notification to her employer? A) Another employee of an affiliated broker-dealer B) An institution that's in the business of borrowing or lending funds C) An individual with whom the RR maintains a personal relationship D) A company with which the RR has a business relationship

B) An institution that's in the business of borrowing or lending funds

A registered person wants to set up an investment program for a charity and will not be receiving compensation for his service. Which of the following statements is TRUE? A) He is required to provide written notification to FINRA. B) He must receive the written approval of his broker-dealer. C) He is required to provide verbal notice to his broker-dealer. D) He is required to provide written notice to his broker-dealer.

B) He must receive the written approval of his broker-dealer. "Under SRO rules, if a person engages in private securities transactions, he's required to provide written notice to his firm. If he's being compensated for the transactions, he must also receive his firm's written approval and the transactions must be recorded on the firm's books and records."

An registered person has purchased two tickets to attend a basketball game with a client. If the tickets cost $85 each, which of the following statements is NOT TRUE? A) Under FINRA rules, this is considered entertainment. B) If the registered person did not attend the game and gave one of the tickets to the client, it is a violation. C) If the registered person did not attend the game and gave both of the tickets to the client, it is a violation. D) This doesn't require the approval of a principal of the firm.

B) If the registered person did not attend the game and gave one of the tickets to the client, it is a violation. - For an activity to be considered an expense, the associated person of a broker-dealer must attend the event with the client.

Which of the following statements BEST describes a banker's acceptance (BA)? A) It facilitates the trading of foreign stocks in the United States B) It helps to finance foreign trade between importers and exporters C) It is used by a municipal issuer in raising funds to meet a seasonal need for cash D) It is issued by nondomestic banks and is secured by Eurodollar deposits

B) It helps to finance foreign trade between importers and exporters

Which of the following statements is NOT TRUE concerning a clearing corporation? A) It provides trade comparison and reporting services. B) It is responsible for automated book-entry changes in the ownership of securities. C) It assists broker-dealers in transferring assets in a customer account to another broker-dealer. D) It offers customers the ability to have real-time trade matching.

B) It is responsible for automated book-entry changes in the ownership of securities. "The responsibility for automated book-entry changes in the ownership of securities is a function of a depository facility (e.g., the DTC), not a clearing corporation."

The third market is concerned with: A) Securities listed on an exchange that are traded directly between institutional investors B) Securities listed on an exchange, but traded in the OTC market C) Listed securities trading on an exchange D) OTC equity securities trading on an exchange

B) Securities listed on an exchange, but traded in the OTC market "fourth market refers to direct institution-to-institution trading and does not involve the public markets or exchanges."

If an equity option is exercised, when does the stock transaction settle? A) T + 1 B) T + 2 C) At expiration D T + 4

B) T + 2

Which of the following is NOT a pass-through entity? A) Limited Liability Company (LLC) B) Real Estate Investment Trust (REIT) C) C Corporation D) S Corporation

C) C Corporation

A husband and wife have a joint account with right of survivorship. If one of the parties places an order, the RR: A) Should contact the other party prior to placing the order B)May accept the order only if the other party has granted trading authorization C) May accept the order D) Must have the order approved by a principal prior to execution

C) May accept the order In most cases, any joint owner may initiate activity in the account (e.g., enter orders to buy or sell securities).

Which of the following choices would NOT be subject to the holding period restriction under Rule 144? A) Restricted stock acquired under an investment letter B) Restricted stock acquired under a stock option plan C) Control stock acquired under a private placement D) Control stock acquired through an open-market purchase

D) Control stock acquired through an open-market purchase

MSRB rules do NOT apply to: A) Registered representatives B) Broker-dealers that prepare research C) Underwriters D) Issuers

D) Issuers

Which of the following securities would be subject to federal securities registration requirements? A) Securities offered through a private placement B) GNMA securities C) Municipal bonds D) Mutual fund shares

D) Mutual Fund Shares

The purchase price of a no-load fund is determined by the: A) Net asset value plus a commission B) Net asset value plus a sales charge C) Supply and demand for the fund D) Net asset value

D) Net Asset Value

The 5% markup policy applies to a: A) New issue of common stock B) Municipal bond trade C) Purchase of mutual fund shares D) Proceeds transaction

D) Proceeds transaction

Interest on Treasury Inflation Protected Securities (TIPS) is: A) Subject to federal and state income tax B) Exempt from federal and state income tax C) Subject to state income tax, but exempt from federal income tax D) Subject to federal income tax, but exempt from state income tax

D) Subject to federal income tax, but exempt from state income tax

If a customer exceeds SIPC limits: A) The customer will receive cash rather than his securities B) The customer is a secured creditor c) The customer doesn't have a claim to the excess amount D) The customer is a general creditor

D) The customer is a general creditor

Obtaining best execution includes all the following factors, EXCEPT: A) Price and volatility B) The general character of the market C) The size and type of transaction D) The number of market makers for the security

D) The number of market makers for the security

Broker-dealers must provide a privacy notice to every customer: A) When the first trade occurs b) When the account is opened C) If requested d) Before disclosing nonpublic, personal information

b) When the account is opened --> And annually thereafter