FINRA-Like SIE Practice Exam and Questions

Our FINRA-like SIE practice test comprises practice questions from all four sections included in the content outline for the SIE exam.

The test has 75 multiple-choice questions, and each question has four answer choices. Here’s how the questions are divided:

SectionDescriptionNo. of Questions
1Knowledge of Capital Markets12
2Understanding Products and Their Risks33
3Understanding Trading, Customer Accounts and
Prohibited Activities
23
4Overview of the Regulatory Framework7
Similar to the FINRA SIE actual exam, our practice test has a time limit of 1 hour and 45 minutes. You need to score at least 70% in order to pass.

SIE Practice Exam (FINRA-Like)

For the SIE (Securities Industry Essentials) exam, you will generally learn about the fundamental aspects of the financial industry, including Capital Markets, Products and Their Risks, Trading, Customer Accounts, and Prohibited Activities, as well as the Regulatory Framework that governs these activities.

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1. Henry and Jennifer, a married couple, have a net worth of $800,000, excluding home equity. Their income has been about $250,000 for several years. Are they eligible to participate in a private placement of securities as accredited investors?

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2. The hours of operation of the Chicago Board Options Exchange are:

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3. When must the brokerage firm deliver a customer confirmation to the customer?

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4. Bonds that are issued by state and local governments but benefit a private corporate are

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5. An investor has 100 shares of XYZ stock at $90 per share. After a 3-for-1 split, the investor can expect to own

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6. Among the differences between an introducing broker-dealer and a clearing carrying broker-dealer is that clearing firms:

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7. ETPs (exchange-traded products) generally include:

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8. The least liquidity in the securities shown below would be found:

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9. Passive losses generated by a limited partnership may be used to reduce which of the following?

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10. A husband and wife wish to open a brokerage account in which the husband will own 60% and the wife 40%. At either owner’s death, the owner’s portion will be liquidated and distributed to his/her beneficiary. What type of account should they open?

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11. A customer wishes to liquidate 100 shares of ABC common at the market. If the current inside market is 904.78 – 905.57, the client’s transaction will occur disregarding commissions and other charges at:

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12. All of the following sectors are considered cyclical EXCEPT

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13. Every publicly-traded corporation is required to have a transfer agent and a registrar. The primary distinction between the two is:

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14. The money supply will tighten based on which of these techniques of monetary policy?

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15. To avoid double taxation on dividends paid to shareholders, REITs must invest what portion of their total assets in real estate?

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16. Joe is a registered rep currently employed by MidWest Broker-Dealer, a St. Louis based firm. Joe likes to leave downtown and drive through the rural fields of the Midwest on the weekends. He so enjoys the open plains that he chats with his 12 closest family members to borrow $200,000 and open his very own farm. Which of the following is true regarding this action?

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17. When the term ‘shelf registration’ is used, it typically refers to:

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18. Under the Internal Revenue Code as it pertains to traditional individual retirement accounts (IRA),

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19. Which of the following options positions obligates an investor to purchase stock?

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20. The order of liquidation in a limited partnership is

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21. Under what conditions, if any, may an agent of a broker-dealer share in the profits and losses of a customer’s account?

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22. When a corporation goes public, it is issuing:

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23. All investors with short option positions:

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24. Recommending a limited partnership DPP investment to a customer would be a defendable recommendation for a client:

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25. The so-called 5% policy pertains to

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26. A market maker is quoting a stock at 23.15 – 23.30. If the firm fails to honor its quote for at least one round lot on both sides of the market,

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27. When calculating total return on a bond,

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28. Stabilizing is a term generally used in Wall Street to refer to the practice of:

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29. A corporate bond that is currently trading at 95 pays a semi-annual coupon of $25. What is the current yield?

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30. Each of the below business enterprises exhibit flow-through of tax and related consequences except:

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31. All of the below are typical features of an ETF except:

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32. Accrued interest is calculated from the

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33. An investor sells short 100 shares of XYZ stock at 61 and buys 1 XYZ 65 call for 1.50 When the market price of ABC is 62. What is the investor’s breakeven on the combined positions?

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34. Which of the bonds listed below would have the greatest price volatility?

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35. An 80-year-old individual would be least likely to purchase a

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36. The credit quality of an exchange-traded note is

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37. Your client wishes to make a substantial investment in a mutual fund your firm is offering. In order to qualify for a reduced sales load, they sign a letter of intent which gives them:

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When a Board declares a cash dividend, the order of dates beginning with that announcement date is:

I. Declaration date

38. II. Payment date

III. Record date

IV. Ex-dividend date

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39. With regard to the price of closed-end fund shares held by investors, which of the following statements is TRUE?

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40. Allowable ways to qualify for a breakpoint when purchasing front-end load mutual funds include:

I. Exchange or conversion privilege with a fund family

II. Reinvesting dividends and/or capital gains distributions under an LOI.

III. 13 month LOI

IV. ROA — rights of accumulation

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41. Which of the following interest rates is established by the Federal Reserve Board?

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42. As interest rates rise, which of the below will change the least in price?

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43. During the accumulation phase of a variable annuity, dividends, interest, and capital gains

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44. For existing customer accounts, how often do broker-dealers required to send a written notice to the customer for verification of account information?

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45. Accumulation units are most often associated with:

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46. When the market price of a bond is lower than its par value,

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47. In a 401(k) with a Roth account option, how are employer-matching contributions allocated?

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48. Noreen and her husband Jeff, residents of New York City, have just had their first child Ali. They are interested in opening a 529 Plan for Ali to save for her future college education. As a registered representative, it would be most appropriate to tell them

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49. A representative’s personal account has been identified for review because of account activity in which securities were bought and quickly sold, often on the following day. This may be evidence of the prohibited practice called

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50. When comparing rights and warrants, which of the following statements is TRUE?

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51. It is not unusual for a broker-dealer to fill a customer order for an NYSE stock as principal out of inventory in lieu of wiring it to the floor the exchange.

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52. Which of the following investment instruments trades on an exchange at a market price not directly related to its net asset value?

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53. Single stock, or single sector, risk is more generally in the category described as:

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54. One of the primary risks associated with mortgage-backed securities is prepayment risk. This tends to present itself when

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55. Many folks living across the country choose to participate in their state’s 529 college savings plan. These investment programs are generally referred to by FINRA as:

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56. Investors that purchase high quality fixed income investments for retirement income are most concerned with

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57. When opening a minor’s account, the social security number to be used is that of the

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58. The “third market” is a marketplace where

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59. Which of the following is a key difference between a Traditional IRA and a Roth IRA?

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60. XYZ Inc. declares a $0.30 dividend payable on Monday, August 15, to all shareholders of record as of Monday, August 8. When is the ex-dividend date for a regular way trade in the stock?

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61. FINRA has promulgated various rules and procedures pertaining to the operation of broker-dealers and departments within member firms. The M&A Department:

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62. A customer requests in writing that the firm hold his account statements while he spends the winter in Florida. In response to the customer’s request, the firm is permitted to honor the request

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63. The threshold to qualify for a sales charge discount on a mutual fund is $75,000. An investor places an order for $72,500 of this fund and is not informed by the registered rep that he would be entitled to a sales charge discount if he invests an additional $2,500. This is an example of a

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64. What type of order should Martin enter if his objective is to buy 500 shares of Cisco stock as soon as possible at the best price available?

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65. A customer deposits $2,000 of cash into a brokerage account in the morning and $10,000 in cash into the same account that afternoon. The firm is required to file

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66. Trader R hears news from an underwriter that his firm will buy a large block of XYZ Co stock. If R buys shares of the stock before the news is made public, he is engaged in

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67. The writer of an option contract is said to have:

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68. Diversification is a very effective way for an investor to mitigate:

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69. Regulation S-P principally deals with:

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70. An NYSE listed corporation has outstanding preferred stock with a cumulative provision and a $5.00 annual dividend. If the earnings over the past two years have led to the Board of Directors declaring a $3.00 preferred dividend two years ago and a $2.00 dividend last year, in order that a common dividend may be paid for the current year:

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71. Pre-emptive Rights and Stock Warrants have a number of similarities. Which of the below represent characteristics these products have in common?

I. Each has a fixed price at which the holder may purchase shares of the issuer’s common stock.

II. The fixed exercise price for both products is initially set at a level below the current market value of the common stock.

III. These products are tradable on securities exchanges

IV. Both have relatively short-term expiration dates

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72. When a customer places a purchase order for an NYSE stock and the trade is reported at a price that is different than the actual transaction price,

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73. Preferred stock includes which of the following features?

I. Voting rights
II. Dividends if declared by the Board of Directors
III. Priority over debentures in a corporate liquidation

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74. Investors whose bonds have been called as interest rates have fallen are now facing

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75. When growth is the principal objective of the investor, each of the below could be suitable except:

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Looking for More In-Dept Practice Questions?

If you’re looking for a more comprehensive practice exam, check out our other sets of practice tests below. Practice Test 1 focuses on Knowledge of Capital Markets, #2 is on Understanding Products and Their Risks, Test 3 is on Trading, Customer Accounts, and Prohibited Activities, and an Overview of the Regulatory Framework for SIE Practice Exam 4.

Which topic are you interested in taking a practice exam? Just click it below.