SIE Practice Exam 1

A decline in the gross domestic product (GDP) must last for at least how many quarters to be considered a recession?
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Terms in this set (75)
A decline in the gross domestic product (GDP) must last for at least how many quarters to be considered a recession?
2 Quarters
Which of the following actions is required when a firm receives cash in excess of $10,000 from one customer in one business day ?
File a Currency Transaction Report (CTR)
A firm is a participant in a public offering. To sell a substantial amount of the securities to its customers, the firm agrees to repurchase the shares at no less than the original sales price. Such agreements are:
prohibited as fraudulent and manipulative
Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of:
$2,000
Regular way settlement on treasury bond is:
nest business day
At the time of issuance, which of the following securities normally has the longest period of expiration?
Warrants
Under the Securities Act of 1933, registration is required for which of the following securities?
American Depositary Receipts (ADR)
In the event of a stock split , which of the following parties is required to maintain a record of the shareholders eligible to receive the additional shares?
Transfer Agent
FinCEN accomplishes its mission to safeguard the financial system from the abuses of financial crime, including terrorist financing and money laundering, by enforcing:
The Bank Secrecy Act
Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions?
The same stock in a cash account whiteout eating for the stock in full
Which of the following considerations should a registered representative explain to a customer when recommending a 529 college savings plan?The potential deductibility of contributions from state taxesWhen is interest on Treasury notes paid?SemiannuallyWhich of the following actions is required if a broker0dealer's anti0money laundering (AML) program?Designating an AML compliance officerIn a period of low inflation and economic recession, the Federal Reserve is expected to take which of the following actions?Buy Bonds in the open marketWhich of the following statements is true about all U.S, government agency issues?They are exempt from registration under the Securities Act of 1933In the over-the-counter market, the term "spread" refers to the difference between the:bid and asked prices.What is the cost basis of an inherited mutual fund?The net asset value (NAV) of the shares when the owner diesUnder a system of statutory voting, a common stockholder has as many votes for each vacancy on the board of directors as the number of:shares owned by the stock holderUnder FINRA rules, non cash compensation connected with the sale of variable ckntraxrs includes all of the following items except:commissionsNo-load mutual funds may have lower expense ratios than load mutual funds for which of the following reasons?No-load funds are not permitted to charge a 12b-1 fee greater than 25 basis points.Which of the following comparisons best describes the essential difference between a primary distribution and a secondary distribution?A primary distribution involves a sale of newly issued shares by the issuer while a secondary distribution involves the sale of already issued and outstanding shares.An investor owns 100 shares of XYZ common stock at the current market price of $50 per share. If XYZ conducts a 1-for-2 reverse stock split, the investor's post-split stock position will be:50 shares at $100 per shareUTMA accounts are opened under the tax ID of the:minorWhich of the following communications with the public is considered misleading?Literature providing 10-year performance information to support predictions of future performanceThe last transaction in XYZ 5.50s 2030 was at 102. This bond is selling at:a premiumTo offer its shareholders a privilege to obtain its shares at a fixed price, which of the following product does a corporation issue?RightsWhich of the following statements is true regarding a customer account held as tenants in common?The ownership of the decedent's assets is governed by their will or state law.Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in which the mayor is currently seeking re-election. A municipal finance professional who resides in the town and works for ABC contributed $200 to the mayor's-election campaign 13 months ago. If the employee wants to support the campaign further without impacting the municipal securities business of the firm, he is permitted to make an additional contribution of up to what amount ?$50A registered representative is reviewing the following portfolio: -30% ABC Energy Company -30% XYZ Health Care Company -30% Exchange-traded fund(tracks the S&P 500) -10% Money market funds Which of the following risks is inherent in this portfolio?NonsystematicA Company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. An investor wants to participate in this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many if an, of the investor's shares will the company purchase?1,000Which of the following investments are generally traded according to their average line rather than their stated maturity dates?Asset-backed securitiesWhich of the following investment risks is the greatest risk in a variable life insurance policy?Market RiskThe computation of dollar prices and accrued interest on municipal bonds is normally on what calendar basis?30/360A savings account at a bank is guaranteed by which of the following entities?FDICWhich of the following responses describes an advantage of index funds?Lower management fees due to passive management of the fundStability in the value of a debt portfolio is greatest when:maturities of the debt securities are short.At issue, which of the following debt securities mature in one year or less?Money market instrumentsA customer is an officer of a company that is involved in some significant changes. All of the following items are examples of corporate affairs that could be considered inside information if the customer shares them with his registered representative except:declared stock dividend.Call protection is most valuable to a bond owner when bond prices are generally:risingA married couple who earned income that exceeded $300,000 in each of the prior two years and reasonably expects the same for the current year is:an accredited investor.When a broker-dealer charges a commission on a securities transaction, it has acted as:an agent.Under Rule 144A, an issuer of restricted stock is permitted to sell to which of the following investor?Qualified institutional buyers (QIBs)All of the following risks apply to both foreign and domestic debt instruments except:exchangeWhich of the following Form U4 reportable events results in a statutory disqualification?A felony conviction for a driving under the influence (DUI) chargeWhich fo the following actions violates FINRA rules regarding selling away?Engaging in private securities transactions without written prior consent of the employing BDCompany ABC annoys a 20% stock divided for its common shareholders. If a customer holds 1,000 shares at $50.00, what is the new price and number of shares following the payment of the stock dividend.?1,200 shares at $41.67Under SEC Regulation S-P (Consumer Privacy), which of the following information must a firm include in tis customer privacy and out-put notices.The policies to protect the security of nonpublic informationUpon expiration, all in-the-money S&P 100 index call options are settled by the delivery of which of the following?CashWhich of the following represents the effect of a stock split?The price per share of common stock decreases.Which of the following stakeholders has first claim priority in a Chapter 11 proceeding?Secured debt holdersUnder normal circumstances a customer's letter of intent on a mutual fund purchase is valid for what maximum period of time?13 monthsThe owner of which of the following products is most exposed to inflationary risk>Treasury bondsWhen selling a fixed amount of a base currency to purchase a counter currency, which of the following factors is primarily used to determine how much of the counter currency the customer will receive?The spot exchange rateBlue-sky laws are regulated by which of the following entities?State securities regulatorsWhich of the following security types provides investors with a stated maturity date, a floating interest rate, and an option to put the security back to a financial intermediary on a daily or weekly basis?Variable rate demand noteA customer has a cash balance in her account together with long positions in several securities. She has made no securities transactions in the account during the past 18 months. How often must the firm send her an account statement?QuarterlyThe redemption value of an open-end investment company's shares is based on the :NAV computed after the order is received.Which of the following products is adversely impacted if the issuer's credit rating is downgraded?Exchange-traded notes (ETNs)A Transaction in which a writer covers a position by purchasing an option is called:A closing purchaseIn which of the following situations is an employee of a public company permitted to trade upon information without violating insider trading laws?An independent securities analyst explains to the employee why the earnings for the company next quarter could be markedly poorer than expected.A broker-dealer is permitted to accept payment for a new issue from a new customer when the:registration is effectiveDirect participation programs (DPPs) provide:exposure to non-correlated assets with steady returnsA registered representative (RR) who wants to place a mutual fund advertisement must obtain written approval from which of the following parties?A registered principal of the RR's firmWhich of the following outcomes are possible for the writer of a covered call option?Profit limited and loss limitedWhich of the following statements is true about treasury stockIt is issued stock that has been subsequently reacquired by the corporation.If a market maker posts a quote of 10.00 - 10.10 [25x10], which of the following actions is the market maker willing to take?Buy 2,500 shares at $10.00 and sell 1,000 shares at $10.10A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling at what price per share at expiration?$38The call provision of a bond stipulates which of the following factors?Call date and call priceWhich of the following statements is true regarding the concept of an annuity contract?The amounts of the periodic payments to the annuitant are determined by the performance of the insurance company's investment returns.Under FINRA rules, which of the following activities by a registered representative requires written notification her firm?Driving part time for a transportation network company on weekendsA member of a stock exchange responsible for providing liquidity in a security by being willing to buy and sell at all time is known as:a Market makerRoth 401(k) and Roth individual retirement account( IRA) plans share which of the following features ?Qualified distributions are excluded from federal income taxThe primary purpose of a syndicate desk in the context of an equity offering is to:build an order book and allocate the stockA registered representative (RR) wants to participate in a private securities transaction. Which of the following actions must the RR take?Send written notice to his supervisor outlining the activity and compensation structureAn associated person who is not a registered representative is permitted to engage in which of the following activities?Provide account opening forms to a new customer