SIE questions
If an investor purchases $1,000 face amount of an 8% corporate bond at 93, and the bond is scheduled to mature in 2028, what will the investor receive at maturity?
$1040
The minimum initial requirement when purchasing 100 shares at $30 in a new account would be
$2000
Your customer, Rodrigo, is 40 years old. He is married and has four sons. Five years ago, he purchased a nonqualified variable annuity for $20,000. It has grown to $25,000 by the time he withdraws $10,000 to pay for his oldest son's college tuition. How will the withdrawal be taxed?
$5000 tax free and ordinary income, plus a 10% penalty on the other $5000. No taxes on return of principal.
An order is entered by a customer to sell at 30 stop limit. Once the order is entered, the stock trades in the following sequence: 32, 29, 31, and 33. The order would be executed and the investor would receive a price of
31
LMN Corporation has 10 million shares of common stock outstanding. LMN intends to offer an additional 2 million shares through a stock rights offering in order to raise additional capital. Your customer owns 500,000 common shares of LMN Corporation. How many stock rights will your customer receive when the rights are issued?
500,000
To fill a customer buy order over the counter, your broker-dealer requests a quote from a market maker for 600 shares. The response is 20 bid, and ask 20.15. If the order is placed, the market maker must sell
600 shares at $20.15 per share
A partnership would like to open a margin account. Which of the following is not needed?
A partnership agreement that specifically allows margin borrowing
How often must a representative complete the firm element continuing education (CE) requirement?
Annually
which class of shares have a 12b-1 fee as the primary sales charge
Class C shares
A mutual fund has breakpoints at $25,000, $50,000, $100,000, and $250,000. Which of the following transactions might be considered a breakpoint sale? The client purchases $48,000 worth of shares The client redeems $24,000 worth of shares The client purchases $252,000 worth of shares The client purchases $96,000 worth of shares
I and IV
When a company liquidates assets, in which order are claims satisfied?
Secured bondholders, debentures, preferred stockholders, common stockholders
An investor has a long position in OMQ stock. After selling the stock at a loss, the investor could purchase which of the following and not violate the wash sale rule?
QMQ put options
All of the following would be acceptable methods for the customer opting out of allowing the broker-dealer to share their nonpublic personal information except
Writing a letter
Paula has applied for a representative position with Great Sky Securities, a broker-dealer firm and FINRA member. While in college, she was a bit of a trouble maker. Since completing her education four years ago, she's been a model citizen. Which of the following issues from her past may result in her disqualification from becoming a registered representative?
a conviction eight years ago for misdemeanor larceny for selling her classmates an interest in the Bay bridge
Which of the following is true regarding accounts trading on margin?
a fiduciary account may only trade on margin if it is specifically permitted in the trust or custodial agreement
Hedge funds are considered
a form of private investment company and therefore unregulated
A person who looks to provide advice to a city government concerning the issuance of municipal debt securities would best be described as
a municipal advisor
The Windmill Alternative Energy Fund offers its shares to the public at the fund's net asset value (NAV) based on the next calculation of that figure. Based on this, you can say that the fund is
a no-load fund
A restricted person in the issuing of new securities under Rule 5130 would include all of the following except
a portfolio manager buying a portfolio she manages.
A mutual fund company may offer noncash compensation to associates of broker-dealer firms in the form of attendance at a meeting or convention, provided that
a record of compensation and meeting details is kept by the attendee members firm
A company's management team has agreed to issue additional shares of common stock in part to provide an employee stock ownership plan. It is agreed the issuance of the stock is not urgent and can wait until more favorable market conditions exist. What type of registration is most suitable under these conditions?
a shelf registration
All of the following statements about securities purchases are true except a. securities may not be purchased with borrowed money b. In a long margin account, customers borrow money for securities purchases c. in a short margin account, customers borrow securities for short sales d. in a cash account, the customer pays in full for securities
a. securities may not be purchased with borrowed money
Restricted shares, those that are unregistered, meaning that they were not attained in a public offering, may be sold by a nonaffiliate
after holding them for 6 mo and freely thereafter
Regarding sales loads, management fees, and operating expenses for mutual funds, which of the following is true?
all reduce investor returns because they reduce the amount of money available to the fund to invest
The SEC can do all of the following except
approve broker-dealers to participate in the securities business.
An investor owns a municipal bond fund. What is the tax status of distributions from the fund?
income is tax free but capital gains distributions are taxable
One of the ways in which closed-end investment companies differ from open-end investment companies is in their ability to
issue preferred stock
An associated person is unable to work for any business other than his member firm without having the employing broker-dealer's
knowledge of the activity
A luxury tax that consumers must pay that is levied on nonessential items of a certain value or more is an example of
legislative risk
The Municipal Securities Rulemaking Board (MSRB) does not regulate
municipalities issuing municipal securities
Those persons employed by a Financial Industry Regulatory Authority (FINRA)-registered broker-dealer to do nothing other than provide training for its associated persons
must be registered as a principal
A new registered representative working for a broker-dealer is taking a part-time job at a restaurant on evenings and weekends to supplement current income. Regarding this activity,
prior written notice must be made to the member firm, who could reject or restrict the affiliation
The forward pricing rule applies to
purchases and redemptions of the shares of open end investment companies
All of the following are nonsystematic risks except
purchasing power risk
the ex-date for a dividend from a mutual fund is set by whom?
the board of directors
With a discretionary account
the customer may still enter orders
Considered the most volatile of the benchmark interest rates in the economy would be
the federal funds rate
The board of directors of the Windmill Growth Fund have declared a dividend. The ex-date for the dividend will likely be on which of the following days?
the first business day after the record date
A registered representative (RR) wants to give employees of another broker-dealer located in the same office building $20 boxes of chocolates for the holiday season. Which of the following is true?
the gifts are permitted if no condition of sales or reciprocal business is expected and the RR's employing firm gives prior approval
For an owner to be paid a dividend, his name should be recorded on the stock record book of the issuer's transfer agent by
the record date
Tony was fired for cause from Great Plains Investments. A U5 Form was promptly filed stating that the cause was rude treatment of coworkers creating a hostile work environment. Great Plains will keep the U5 record for a minimum of
three years
Isaac James has some call options in his account that he would like to exercise. He wants to know when the resulting purchase of the stock would settle. You would tell him
trade date plus 2 business days
If a registered representative terminates employment with a member firm, how many years may elapse before she would be required to again pass the qualifying exams in order to affiliate with her prior firm?
two years
A customer called his registered representative to place a trade to buy 100 shares of ABC. The customer wants to put a limit on the order, but is unsure what would be an appropriate price. At the suggestion of the registered representative, the customer enters the order with a limit of $30. This trade was
unsolicited
All of the following are money market instruments except a. Warrants expiring in three months b. negotiable cds c T-bonds maturing within the next year d. bankers acceptances
warrants expiring within three months.
All registered persons must complete a computer-based training session within 120 days of the person's second registration anniversary and every three years thereafter to comply with
FINRA's regulatory element regulation
One of the Financial Industry Regulatory Authority (FINRA) Conduct Rules is concerned with private securities transactions. Under that rule, it would be correct to state that I. if the member approves the registered representative participating in a transaction for compensation, it must treat the transaction as if it is being done on its own behalf by entering the transaction on its own books and supervising the associated person during the transaction. II. as long as no compensation to the registered representative is involved, notification to the member is not required. III. sale of a securities product to the registered representative's mother where there is only nominal compensation is not covered under the rule. IV. if the member disapproves of the registered representative's participation in a transaction for compensation, the associated person may not participate in it.
I and IV
Which of the following choices would a registered representative be able to make for a customer in a nondiscretionary account? I.The time of execution of the trade II. Which security to buy III. How much of the security to buy IV. At what price to execute the trade
I and IV
A client buys stock on Monday, May 2, in a cash account. Under Regulation T, when is the client's payment due?
In four business dats
The federal government could use which of the following to stimulate the economy?
Increase govt spending
On Tuesday, July 3, your customer bought 15 SBRD 30 September calls at 4. On Friday, August 10, the calls are in the money and your customer issues exercise instructions. On which days did the trade and the exercise settle?
July 5 and August 14
If Edna moves $50,000 from a maturing certificate of deposit to her checking account, which of the following measures of money supply would change?
M1
Your customer owns 20 Government National Mortgage Association (GNMA) certificates. They receive a monthly payment of principal and interest. How is the interest taxed?
The interest is taxable at both the federal and state level
Which of the following transactions may be made on margin?
The purchase of NYSE listed closed end fund shares.
