Comprehensive SIE Practice Exam Questions with Verified Solutions
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Course
Comprehensive SIE Practice
Institution
Comprehensive SIE Practice
Comprehensive SIE Practice Exam
Questions with Verified Solutions
What role does the syndicate desk play during an equity offering?
It is responsible for creating an order book and managing the allocation of shares.
What advantage does investing in index funds offer?
Index funds typicall...
1 Comprehensive SIE Practice Exam Questions with Verified Solutions What role does the syndicate desk play during an equity offering? ✔✔ It is responsible for creating an order book and managing the allocation of shares. What advantage does investing in index funds offer? ✔✔ Index funds typically incur lower management fees because they follow a passive management approach. How does a primary distribution differ from a secondary distribution? ✔✔ A primary distribution inv olves the issuer selling new shares, whereas a secondary distribution involves selling previously issued shares. On what basis are dollar prices and accrued interest on municipal bonds usually calculated? ✔✔ Using a 30/360 day count convention. What bene fit do Direct Participation Programs (DPPs) provide to investors? ✔✔ They offer access to investments that are not correlated with traditional market assets. 2 When is call protection most beneficial for a bondholder? ✔✔ It is most advantageous when bond pr ices are increasing. What change occurs to the stock price as a result of a stock split? ✔✔ The price per share decreases. When is a debt portfolio most stable? ✔✔ When it consists of debt securities with shorter maturity dates. What is a requirement fo r a broker -dealer’s anti -money laundering (AML) strategy? ✔✔ Appointing an AML compliance officer. What action violates FINRA regulations regarding selling away? ✔✔ Engaging in private securities transactions without the broker -dealer’s written consent. If Company ABC declares a 20% stock dividend and a customer holds 1,000 shares valued at $50 each, what will be the new share quantity and price after the dividend? 3 ✔✔ The customer will have 1,200 shares priced at $41.67 each. What characteristic is share d by both Roth 401(k) and Roth IRA plans? ✔✔ Distributions that meet certain criteria are free from federal income tax. What task is an associated person, who is not a registered representative, permitted to perform? ✔✔ Providing account opening forms to new clients. If XYZ 5.50s 2030 bonds are last traded at 102, what does this indicate about their market value? ✔✔ The bonds are selling at a premium. What is required for a registered representative (RR) to run a mutual fund ad? ✔✔ Approval must be obtai ned in writing from a registered principal within the RR's firm. For how long is a letter of intent valid for mutual fund purchases? ✔✔ It remains valid for up to 13 months. 4 What instrument does a corporation use to offer its shareholders the right to bu y additional shares at a set price? ✔✔ Rights. What does the call provision of a bond specify? ✔✔ It details the dates and prices at which the bond can be redeemed before its maturity. How many quarters of declining GDP are necessary to classify as a rec ession? ✔✔ Two quarters. What is the regular settlement period for Treasury bonds? ✔✔ The next business day. How are assets distributed in a customer account held as tenants in common upon the account holder’s death? ✔✔ According to the decedent's will or applicable state laws. What is meant by treasury stock?
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