SIE Unused Questions

obtain a written representation that the buyer is not a restricted person

A member firm receives an order to purchase shares in a common stock initial public offering (IPO) from another broker-dealer for a customer. Regarding restricted persons, the member must A) refuse to accept the order. B) obtain a statement witnessed by a notary representing that the buyer is not restricted. C) obtain a list of all of the broker-dealer clients to determine eligibility. D) obtain a written representation that the buyer is not a restricted person.

cannot exceed $250

A municipal finance professional wants to make a political contribution to a candidate for mayor in the town that she resides in. Under the MSRB pay-to-play rule, a contribution to this candidate A) is prohibited. B) cannot exceed $100. C) cannot exceed $250. D) can be in any amount.

an unlisted security trading trading at less than $5 per share

A penny stock is A) an unlisted common or preferred stock trading for $5 or less per share. B) an unlisted (not listed on a U.S. stock exchange) security trading at less than $5 per share. C) an exchange-listed stock trading at $5 or less per share. D) a stock in a company that has suffered a 50% devaluation within the most recent 30 calendar days.

par value

A preferred stock dividend is stated as a percentage of A) the 52-week average share price. B) the company's net worth. C) current market value. D) par value.

only if it is not listed as being restricted from doing so in the corporate charter.

Corporate accounts may trade on margin A) only if it is not listed as being restricted from doing so in the corporate charter. B) never. C) always. D) only if it is specifically listed as being permitted to do so in the corporate charter.

municipal securities sales to customers

An associated person of a Financial Industry Regulatory Authority (FINRA) member firm would not be considered a municipal finance professional (MFP) if involved solely in which of the following? A) Underwriting municipal securities for the firm B) Research involving municipal securities for the firm C) Municipal securities communications with customers D) Municipal securities sales to customers

premium of 2

An investor buys 1 DWQ May 70 call at 2, giving the investor the right to buy 100 shares of DWQ at $70 per share. All the specifications of the transaction are set or standardized by the Options Clearing Corporation (OCC) except A) exercise price of 70. B) contract size of 100 shares. C) premium of 2. D) expiration date in May.

negotiable CDs

Being secured by no physical asset and backed only by a bank's good faith and credit, a bank's promise to pay principal and interest can be evidenced in which of the following securities that are traded in the secondary market? A) CDs B) Notes and bonds C) Negotiable CDs D) Commercial paper

NYSE

BigCo, Inc., common stock is an NYSE-listed security. BigCo's board declared a $0.25 per share dividend on Tuesday, May 2. The dividend will be paid to holders of record of BigCo common stock as of Tuesday, May 24 and will be paid out on Wednesday, June 8. Who will set the ex-dividend date? A) FINRA B) The board of directors C) The NYSE D) The SEC

coincident indicators

GDP, industrial production, and unemployment are examples of A) dragging indicators. B) coincident indicators. C) lagging indicators. D) leading indicators.

July 5 and August 14

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? A) July 4 and August 11 B) July 6 and August 13 C) July 5 and August 12 D) July 5 and August 14

after holding them for six months and freely thereafter

Restricted shares, those that are unregistered, meaning that they were not attained in a public offering, may be sold by a nonaffiliate A) at any time but with volume restrictions. B) after holding them for six months and freely thereafter. C) after holding them for six months but then subject to volume restrictions. D) freely, with no holding period or volume restrictions.

I and II

Rule 144 imposes volume limitations on the number of shares that can be sold by I. control persons selling registered stock held for one year. II. control persons selling restricted stock held for two years. III. nonaffiliates selling registered stock held for one month. IV. nonaffiliates selling restricted stock held for more than six months. A) I and II B) I and IV C) III and IV D) II and III

business risk

Systematic risk would include all of the following except A) inflation risk. B) business risk. C) market risk. D) interest rate risk.

set out fair and ethical trade practices that member firms and their representatives must follow.

The Conduct Rules A) determine who is at fault in disputes that would result in monetary settlements. B) set out fair and ethical trade practices that member firms and their representatives must follow. C) establish standard trade practices, including settlement dates, good delivery procedures, and ex-dates. D) determine how member violations will be heard, reviewed, and addressed.

Discount

The Federal Reserve sets which of these rates? A) Broker call B) Discount C) Prime D) Federal funds

courts protect both corporate and individual filers from creditors

Regarding bankruptcy proceedings, A) a plan for reorganization must be submitted first before the courts can offer protection from creditors. B) liquidation of assets must occur first before the courts can offer protection from creditors. C) the procedure is only available to individuals seeking protection from creditors and not business entities. D) courts protect both corporate and individual filers from creditors.

there is no limit to the number of primary offerings a corporation can issue

Regarding primary offerings, which of the following is true? A) A corporation can have two primary offerings—the initial public offering (IPO) and an additional public offering (APO). B) A corporation can have only one primary offering—the initial public offering (IPO). C) There is no limit to the number of primary offerings a corporation can issue. D) After its initial public offering (IPO), a corporation can have only one more primary offering—its subsequent primary offering (SPO).

$2,400, which is not deductible from his ordinary income

Your Client, Sven, has an extensive portfolio of stocks and bonds. Last year, he had an income of $36,000, of which $200 a month was from a part-time job and the rest from his portfolio. How much can he contribute to a ROTH IRA for the previous year? A) The legal maximum, which is deductible from his ordinary income B) The indexed maximum, which is not deductible from his ordinary income C) $2,400, which is deductible from his ordinary income D) $2,400, which is not deductible from his ordinary income

trade date plus 2 business days

Your client is buying municipal bonds and wants to know when payment is due. You should tell him A) trade date plus 2 business days. B) trade date plus 1 business day. C) trade date. D) trade date plus 3 business days.

There is no limit to the number of transfers per year between custodians.

Your client retired from his job three years ago and placed all of the proceeds of his 401(k) distribution into a rollover IRA at his local bank. If the client wishes to transfer the funds to an IRA at your broker-dealer, which of the following statements would be true? A) A transfer of this type will incur a 10% penalty. B) A transfer of this type is not permitted. C) There is no limit to the number of transfers per year between custodians. D) Mandatory tax withholding applies to trustee-to-trustee transfers.

two business days following the trade

Your customer purchased a revenue bond issued by the Metropolitan Water District of Los Angeles in the secondary market at a price of 102.5. When is the investor required to deliver the funds to complete this transaction? A) The next business day B) By the close of business on the trade date C) When the offering is completed D) Two business days following the trade

a closed end company

A company has just conducted a stock offering, by prospectus, through an investment banker. The proceeds of the offering are used to purchase a portfolio of securities. The stock, now in the hands of the public, is freely traded in the secondary market, and the portfolio is managed to generate maximum profit according to a specific investment objective. The company must be A) a nonfixed UIT. B) a mutual fund. C) a closed-end company. D) a fixed UIT.

I only

A company is already public with several major stockholders. The company proposes an offering where sale proceeds for shares being sold to the investing public will go to some of the existing stockholders who want to divest of their shares as well as to the corporation. This is I. a combination offering. II. a primary offering. III. a secondary offering. IV. an initial primary offering (IPO). A) II and III B) II and IV C) I only D) I and IV

Yield to call (YTC) is the same as yield to maturity (YTM).

A customer buys a callable 5% coupon bond at par that will mature in 10 years. Which of the following statements is true? A) Yield to call (YTC) is lower than yield to maturity (YTM). B) Yield to call (YTC) is higher than yield to maturity (YTM). C) Yield to call (YTC) is the same as yield to maturity (YTM). D) Nominal yield is higher than either yield to maturity (YTM) or yield to call (YTC).

52

A customer purchased 1 MNO Jan 50 call at 2. What is the breakeven point for both the purchaser and the seller? A) 50 and 48 B) 52 and 48 C) 52 D) 50

supporting

A form of market manipulation that attempts to keep the price of the stock from falling is called A) capping. B) front running. C) backing away. D) supporting.

to the customer having the largest short position

A member firm is assigned an exercise notice by the Options Clearing Corporation (OCC). The member firm may assign the exercise notice to one of its short customers by any of the following methods except A) to the customer having the oldest short position. B) on a random-selection basis. C) in any way that is fair and reasonable. D) to the customer having the largest short position.

the shareholder must accept the proxys decision

A shareholder had arranged to vote by proxy at the corporation's annual shareholders' meeting, but later decided to vote the shares personally. All of the following statements regarding this situation are true except A) the shareholder may instead vote personally as they wish. B) the proxy may be assigned to yet another person. C) the shareholder must accept the proxy's decision. D) the shareholder may still abstain from voting altogether.

market maker

ABC Securities is a FINRA member broker-dealer that maintains an inventory in BigTech Computing stock. When transacting business in BigTech stock, ABC is most likely acting in what capacity? A) Agent B) Market maker C) Underwriter D) Broker

warrants expiring within three months

All of the following are money market instruments except A) banker's acceptances. B) negotiable certificates of deposit. C) Treasury bonds maturing within the next year. D) warrants expiring within three months.

a municipal bond issued from a state other than the customers residence

Which of the following securities pays interest that is taxable at the state level and tax free at the federal level? A) Any municipal bond B) Any Treasury bond C) A Treasury bond if owned by a U.S. resident D) A municipal bond issued from a state other than the customer's residence

money market instruments

Which of the following types of investments is least likely to be a major investment strategy for hedge funds? A) Currencies B) Options C) Money market instruments D) Selling short

becoming a limited partner is an oil and gas drilling program

Each of the following activities would require prior written notification by an associated person to the employing broker-dealer except A) part-time work parking cars on the weekend at a local racetrack. B) acting as a real estate sales agent, limited to the sales of individual homes only. C) becoming a limited partner in an oil and gas drilling program. D) offering to sell a limited partnership interest in an oil and gas drilling program.

the federal reserve bank at the discount rate

Federal Reserve member banks needing to borrow money can borrow from A) member firms at the discount rate. B) nonmember banks at the federal funds rate. C) the Federal Reserve Bank at the discount rate. D) the Federal Reserve Bank at the federal funds rate.

$5,000 and appears to serve no business or legal purpose

Which of the following would require the filing of a SAR? Any transaction alone or in aggregate involving at least A) $5,000 on a single day. B) $3,000 and appears to serve no business or legal purpose. C) $5,000 and appears to serve no business or legal purpose. D) $,3000 on a single day.

Coupon rate, current yield, yield to maturity, yield to call

If a bond is trading at a premium, which of the following rates is correctly ranked from high to low? A) Yield to call, yield to maturity, current yield, nominal yield B) Nominal yield, yield to maturity, current yield, coupon rate C) Yield to call, current yield, nominal yield, coupon rate D) Coupon rate, current yield, yield to maturity, yield to call

current yield (CY) equals yield to call (YTC).

If a callable bond is priced at par, which of the following is true? A) Current yield (CY) equals yield to call (YTC). B) Current yield (CY) is less than yield to maturity (YTM). C) Yield to maturity (YTM) is less than yield to call (YTC). D) Current yield (CY) is greater than yield to maturity (YTM).

the individual may associate with another member firm with SEC permission

If an associated person is barred from the securities industry, which of the following is true? A) The individual may still be employed as a paid adviser to a member firm. B) The individual may still serve as an officer or director of a member firm but have no sales function. C) The individual may associate with another member firm with SEC permission. D) The individual may never associate with another member for life.

inverse

If interest rates are changing, which of the following terms would best describe the relationship between prices and yields for corporate bonds? A) Coterminous B) Inverse C) Adverse D) Reverse

fixed income payments would become more valuable

If the U.S. economy were to enter an inflationary period, which of the following would likely not occur? A) Gold prices would increase. B) Interest rates would increase. C) Fixed income payments would become more valuable. D) Employment would rise.

a holder of common stock may dispose of the shares in whatever way they choose

In regards to the rights of a common stockholder, freely transferable is best described by which of the following statements? A) A holder of common stock may transfer the shares for value with the transfer agent's permission. B) A holder of common stock may transfer the shares with the issuer's permission. C) A holder of common stock may dispose of the shares in whatever way they choose. D) A holder of common stock may transfer the shares for value.

M3

Large time deposits of more than $100,000 are considered to be found in what part of the money supply? A) M2 B) M1 and M2 C) M3 D) M1

placement

Money laundering activities are most easily caught during which phase? A) Structuring B) Placement C) Integration D) Layering

FINRA

Which regulator sets maintenance requirements for margin accounts? A) the FRB. B) the OCC. C) FINRA. D) the SEC.

0 days

The aftermarket prospectus requirement following an APO for exchange-listed securities is A) 40 days. B) 0 days. C) 90 days. D) 25 days.

strike + premium

The breakeven on a short call is A) the premium. B) strike + premium. C) strike - premium. D) the strike price.

the balance of trade

The largest component of the U.S. balance of payments is A) imports. B) foreign currency. C) exports. D) the balance of trade.

the company receives at least 80% of its revenue from the home state

Which of the following is not a requirement for a security to be sold under Rule 147, the intrastate offering rule? A) The company receives at least 80% of its revenue from the home state. B) The company is based in the state where the offering will be made. C) All investors are residents of the state. D) The offering takes place in the home state.

BB

Which of the following is the highest noninvestment grade debt rating? A) B B) C C) BB D) BBB

BBB

Which of the following is the lowest investment grade debt rating? A) Aa B) BB C) BBB D) A

SOVEREIGN RISK

The ratings on the debt instruments of a foreign country with outstanding loans from a number of other countries worldwide have been downgraded. The impact felt due to the risk of possible default is known as A) interest-rate risk. B) legislative risk. C) political risk. D) sovereign risk.

common shares of a closed end investment company

Which of the following securities may trade above or below their net asset value? A) Units of a unit investment trust B) Face-amount certificates C) Common shares of a closed-end investment company D) Common shares of an open-end investment company

decrease

U.S. consumers are increasing their imports of foreign-made goods. On this data alone, one might expect gross domestic product (GDP) to A) increase. B) initially increase sharply and then decrease. C) decrease. D) remain the same.

3 years after the associate leaves the firm

U4 forms must be kept for A) 6 years after the associate leaves the firm. B) 4 years after the associate leaves the firm. C) 10 years after the associate leaves the firm. D) 3 years after the associate leaves the firm.

shares issued by a US government bond fund

Under the Securities Act of 1933, which of the following is a nonexempt security? A) Commercial paper B) U.S. government bonds C) Municipal bonds D) Shares issued by a U.S. government bond fund

the right to transfer the asset freely

What rights do owners of American depositary receipts (ADRs) and owners of domestic common stock share? A) The right to maintain percentage of ownership B) The right to vote the shares C) The right to transfer the asset freely D) The right to convert to the underlying asset

rehypothecation

When a broker-dealer pledges customer securities to a bank as collateral for a margin loan, the pledge is known as A) rehypothecation. B) loan consent. C) credit agreement. D) hypothecation.

T-bills

Which of the following earn interest but don't pay interest? A) T-notes B) T-bonds C) T-bills D) None of these