Securities Industry Essentials (FINRA SIE)
The SIE covers the fundamentals that you'll need for any role in finance, establishing a solid foundation for your career path.
Question 1
A customer buys 700 shares of ABC stock at $81 on Thursday, February 11. The following year, the customer sells 700 shares of ABC stock at $97 on Wednesday, February 14. What is the tax consequence?
A.
Passive income
B.
Earned income
C.
Long-term capital gain
D.
Short-term capital gain
Question 2
All of the following statements related to Treasury securities are true, EXCEPT:
A.
Treasury bills trade flat
B.
TIPS par values are adjusted according to inflationary changes
C.
Treasury notes pay interest semi-annually
D.
STRIPS are subject to taxation on interest only at maturity
Question 3
The lowest investment grade bond rating is which of the following choices?
A.
A
B.
BB
C.
BBB
D.
AA
Question 4
Which of the following statements regarding preferred equity securities is correct?
A.
The par value should be assumed to be $1,000 unless otherwise specified
B.
These securities maintain prominence over all other securities in corporate liquidations
C.
Most have a variable coupon
D.
They are suitable for investors seeking income as a primary goal
Question 5
A registered agent facilitates a transaction with one of their clients. After a long discussion regarding the suitability of the trade, the agent executes a transaction that results in the client obtaining shares of a technology company's stock. The trade confirmation reports the transaction as executed in a principal capacity. Which of the following statements is true?
A.
The client was charged a sales load
B.
The client was charged a markup
C.
The client was charged a commission
D.
The client was charged a markdown
Question 6
A customer wants their firm to manage their assets and wants a simplified fee structure. What should the registered representative recommend?
A.
Partnership account
B.
Guardianship account
C.
Wrap account
D.
TIC account
Question 7
Which of the following orders are placed above the current market price?
A.
Buy limits and sell stops
B.
Buy stops and sell stops
C.
Buy stops and sell limits
D.
Buy limits and sell limits
Question 8
An investor learns a company they're invested in is considering the offer of warrants in an upcoming sale of securities. To better understand this security, they call their assigned registered representative to discuss this security. Which of the following statements made by the representative would be considered false or misleading?
A.
Warrants are typically issued without intrinsic value
B.
Warrants are typically issued without time value
C.
Warrants are usually attached to the sale of another security like a bond
D.
The issuance of warrants is dilutive
Question 9
A 19 year, 6.10% bond is quoted at a 15 point discount. What is the order of yields, from highest to lowest?
A.
YTM, YTC, Current, Nominal
B.
YTC, YTM, Current, Nominal
C.
Nominal, Current, YTM, YTC
D.
Nominal, Current, YTC, YTM
Question 10
Rylan goes short 4 TSLA Feb 315 calls at $8 when TSLA's market price is $311. What is Rylan's breakeven price?
A.
$307
B.
$312
C.
$320
D.
$323
FINRA's SIE exam summary
Knowledge of Capital Markets
16%
12 questions
The basics, laws, and regulations of the financial markets. You'll need to know the primary and secondary markets, the regulators (SEC and FINRA), and their rules (Act of 1933, etc).
Understanding Products and their Risks
44%
33 questions
The products of the financial markets, which include stocks, bonds, mutual funds, ETFs, and options. You'll need to know what these products are, the risks of investing in them, and how they benefit investors.
Understanding Trading, Customer Accounts and Prohibited Activities
31%
23 questions
How customers buy and sell securities in their accounts. You'll need to know different types of orders and accounts, how those orders are entered into the market, and the regulations that govern these activities.
Overview of Regulatory Framework
9%
7 questions
How financial professionals operate in their jobs and the rules that govern their activities. You'll need to know FINRA and SEC rules, ethics of working with clients, and general procedures for financial professionals.
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