SIe practice exam Questions with correct answers provided. 100% Accurate.

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SIe practice exam Questions with correct answers provided. 100% Accurate. The Securities & Exchange Commission (SEC) was created by Congress in A 1929 B 1933 C 1934 D 1940 - ✔✔-1934 The ... Act of '34 created the SEC. The term 'disclaimer' is most often associated with A The fact that no agent can guarantee a customer against loss B The fact that unregistered securities are more risky than registered ones C The fact that the government cannot guarantee the accuracy of the information in a prospectus D None of the above - ✔✔-The fact that the government cannot guarantee the accuracy of the information in a prospectus The SEC reviews the information in a registration statement, it does not approve or disapprove of the information, nor does it guarantee the accuracy of the information disclosures. Therefore no sales agent can say to a prospect that these are 'government approved' securities SIPC, the securities investor protection corporation is: A) An insurance entity which protects investors investments again market losses up to $500,000 B) An insurance entity which protects investors investments against losses up to ½ million dollars in market value in the event of broker-dealer bankruptcy C) A Congressional guarantee against losses in the securities markets D) None of the above - ✔✔-None of the above SIPC was set up to protect customer ACCOUNTS in the event of a broker-dealer bankruptcy, not protect investments against loss. Be careful of the wording in this question. Cash & securities in customer accounts are 'insured' up to $500,000 in the event the B/D goes bankrupt and the cash and securities can't be located and properly returned to the customer. In most cases, Federal Securities Laws: A Supersede State securities laws B Are subordinate to State securities laws C Are given the same weight as State securities laws D None of the above - ✔✔-Supersede State securities laws : Federal securities laws typically supersede State laws. Which of the following are not considered money market securities? A) T-bills B) Commercial Paper C) Reverse Repos D) ADRs - ✔✔-ADRS : Since the 'money market' includes short term debt instruments only, and since ADRs represent ownership (equity) in foreign stocks, ADRs are not debt When a corporation goes public, it is issuing: A Common stock B Preferred stock. C Convertible bonds D Any of the above - ✔✔-Common stock Going public means sharing equity ownership (common stock) with public investors, for the first time (Initial public offering, IPO). The term 'issuer' most often refers to: A) A corporation seeking to raise additional capital for expansion or modernization purposes B) A business which prints up securities certificates such as bonds and stocks C) A business which has satisfied the listing requirements of one or more approved stock exchanges D) A business, a municipality, or a federal governmental entity which is seeking to raise capital from the sale of securities. - ✔✔-A business, a municipality, or a federal governmental entity which is seeking to raise capital from the sale of securities. Whether one considers answers A, B, or C partially accurate, the last answer, D is the most complete therefore best answer. Every publicly-traded corporation is required to have a transfer agent and a registrar. The primary distinction between the two is: A) They are not different --- they perform the same function B) The registrar keeps the record of all stock and bond holders C) The transfer agent transmits the payment for securities from the purchaser to the seller in all secondary market trades. D) The transfer agent ensures that dividend payments go out to all registered owners of record on the payable date. - ✔✔-The transfer agent ensures that dividend payments go out to all registered owners of record on the payable date. This is one of the functions of a Transfer Agent. Registrars make sure that a company does not issue more shares than authorized in the Charter. One of the more attractive features of common stock is that: A) One cannot lose more than one's investment B) The stockholders have the right to vote on quarterly dividends C) The stockholders have the right to choose Officers D) Any of the above - ✔✔-One cannot lose more than one's investment : You cannot lose more than you've put at risk. A common stockholder cannot be held liable for any debts of the corporation, therefore they have limited liability. When the market price of a company's common stock has reached triple digits ($100 or above), the Board of Directors may elect to declare which of the below to make the shares more affordable? A Reverse stock split B A stock split C A stock dividend D Any of the above - ✔✔-A stock split : Splitting a stock provides each shareholder with more shares and the CMV (current market value) of the stock will decline proportionately. Because of the reduced price in the market, it becomes more 'affordable. When a corporate Board announces a 10% stock dividend, shareholders know they will be receiving: A more shares B money C both of the above D neither of the above - ✔✔-more shares Stock dividends are not Cash dividends - they are dividends in the form of additional shares. Boards of Directors in the publicly-traded sphere are elected by corporate stockholders, using which of the following methods? A statutory voting B regular voting C cumulative voting D any of the above are possible voting procedures - ✔✔-any of the above are possible voting procedures All three are correct - in fact, Regular and Statutory are the same Call option contracts are considered to have intrinsic value: A when CMV exceeds exercise price B when exercise price exceeds CMV C when CMV is equal to exercise price D when the option holder has exercised the option - ✔✔-when CMV exceeds exercise price : Call option contracts go 'in the money' (intrinsic value) when the current market value of the underlying security exceeds the exercise price (strike price) of the option. If a call option's exercise price is $20, and the underlying stock is trading at $25, the intrinsic value of the call option is $5. Reinvestment risk is least present in: A 2% 10 year Treasury Note B 3% 10 year AA rated Municipal G.O. C 4% 10 year AAA rated Corporate debenture D Zero coupon Treasury Bond - ✔✔-Zero coupon Treasury Bond Since with a Zero coupon instrument there is no annual income to 'reinvest,' Zeroes have no reinvestment risk. All of the below are typical features of an ETF except: A they are marginable B they often are sector-driven portfolios C they are traded each day based upon 4:00 pm NAV D none of the above are exceptions - ✔✔-they are traded each day based upon 4:00 pm NAV Exchange traded funds trade on exchanges at market prices determined by supply and demand - the same as regular corporate stocks. Accumulation units are most often associated with: A life insurance B annuities C mutual funds D ETFs - ✔✔-annuities Variable annuities sell 'accumulation units' to purchasers, whose price each day is based upon the 4 pm net asset value of the separate account. One of the most frequently issued money market instruments is commercial paper. Typically, this investment has a maximum maturity: A) of one year B) of 90 days C) of 270 days D) of 180 days - ✔✔-of 270 days The maximum maturity is 9 months or 270 days. The Securities Industry Essentials examination gives a candidate A) the right to take one or more of the top-off representative exams B) the right to trade securities C) the right to engage in phone solicitation of sales prospects D) all of the above - ✔✔-the right to take one or more of the top-off representative exams. : This SIE exam enables the candidate to take one of several different FINRA registered reps exam Certain securities are marginable under Regulation T of the Securities & Exchange Act of 1934 except: A) listed stocks B) options C) NASDAQ stocks D) all of the above are marginal under Reg. T - ✔✔-options : Regulation T does not permit margin under normal circumstances on Option contracts. When an investor is bearish on the broa [Show More]

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