STC SIE Exam Final Practice Questions And
Answers 100% Pass
Which of the following statements is TRUE concerning periodic payment variable annuities?
A. A client's number of annuity units never changes
B. A client's number of accumulation units never changes
C. Annuity contracts never have a beneficiary
D. The monthly payout is fixed by the inflation index - answer✔A. A client's number of annuity
units never changes
Which of the following securities would be subject to federal securities registration
requirements?
A. Securities offered through a private placement
B. GNMA securities
C. Municipal bonds
D. Mutual fund shares - answer✔D. Mutual fund shares
Mutual fund shares would be subject to registration requirements at the state and federal level.
The other securities are exempt from federal and state registration requirements.
Which of the following is the likely result of persistent deflation?
A. A decrease in interest rates
B. A decrease in the level of inflation
D. An increase in the value of equities - answer✔A. A decrease in interest rates
Which of the following statements is NOT TRUE about a fidelity bond?
A. It protects customers in the event their broker-dealer goes bankrupt.
B. It's insurance that protects a broker-dealer in case of fraud such as forgery or counterfeit
currency.
C. FINRA must be notified if the bond is cancelled or substantially modified.
D. It covers securities that are held at the brokerage firm as well as those in transit. - answer✔A.
It protects customers in the event their broker-dealer goes bankrupt.
A fidelity bond does not protect customers in the event of broker-dealer bankruptcy; that's the
role of SIPC.
If a market maker has a current quote of 50.00 - 50.05 (15 x 20), this indicates that the firm is
willing to:
A. Sell 200 shares at $50.00 and buy 150 shares at $50.05
B. Buy 150 shares at $50.00 and sell 200 shares at $50.05
C. Sell 1,500 shares at $50.00 and buy 2,000 shares at $50.05
D. Buy 1,500 shares at $50.00 and sell 2,000 shares at $50.05 - answer✔D. Buy 1,500 shares at
$50.00 and sell 2,000 shares at $50.05
An investor purchases a 20-year 5.30% bond at par value that will yield 5.75% if called at the
first call date in five years. The yield to maturity on the bond is:
A. 5.30%
B. More than 5.30%
C. Between 5.30% and 5.75%
As it relates to private securities transactions that are executed by an associated person of a
broker-dealer, compensation does NOT include:
A. Being paid a commission by the employing broker-dealer
B. Being paid a commission by another broker-dealer
C. Receiving tax benefits received by the employee
D. Being given warrants by another firm - answer✔A. Being paid a commission by the
employing broker-dealer
A convertible bond has a conversion price of $50 and is currently selling in the market at $1,100.
The conversion ratio is:
A. 20
B. 22
C. 55
D. 50 - answer✔A. 20
To find the conversion ratio of a convertible bond, the bond's par value ($1,000) is divided by the
conversion price ($50).
The purchase price of a no-load fund is determined by the:
A. Net asset value plus a commission
B. Net asset value plus a sales charge
C. Supply and demand for the fund
D. Net asset value - answer✔D. Net asset value
SPDR is considered a type of:
A. Index option
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