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

2 / 75

2. A company “reverse splits” its stock on a 1-for-10 basis. If an investor holds 800 shares before the event, what will be the impact of the split, if any, on the total value of the investors’ shares?

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3. In the industry, the term ‘Blue Chip’ most often is associated with:

4 / 75

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

5 / 75

5. A candidate who fails the SIE exam three times and has waited for the six-month moratorium period is preparing to take the exam for the fourth time. Which of the following is true?

6 / 75

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

7 / 75

7. Which of the following are not considered money market securities?

8 / 75

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

9 / 75

9. The US economy has traditionally performed in a way described by economists and analysts as the business cycle. When an economy that has been operating a peak efficiency begins to slow down, which phase of the cycle is the economy entering?

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10. Reinvestment risk is least present in:

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

12 / 75

12. Call option contracts are considered to have intrinsic value:

13 / 75

13. A communication made available to 20 institutional clients and 20 retail clients is classified as

14 / 75

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

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15. 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:

16 / 75

16. Sweeteners as that term is used in the investment banking community refers to issue enhancements which include:

17 / 75

17. When one of the individuals in an account opened as Tenants in Common dies, their share of the account:

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18. Choose from among the below ratings the one which is the higher credit rating in the speculative category as defined by Standard & Poors rating service would be:

19 / 75

19. Depreciation write-offs represent which of the following?

20 / 75

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

21 / 75

21. 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

22 / 75

22. In order for a registered representative to maintain their securities license on an ongoing basis, which of the following properly states the CE requirements?

23 / 75

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

24 / 75

24. A market maker is obligated

25 / 75

25. All states have a securities Administrator whose job it is to enforce the securities laws of their state. All Administrators are part of an organization known as:

26 / 75

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

27 / 75

27. 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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28. 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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29. With regard to the price of closed-end fund shares held by investors, which of the following statements is TRUE?

30 / 75

30. That most basic tenet of a suitability determination is the:

31 / 75

31. 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?

32 / 75

32. Exercise of an equity put option involves the writer:

33 / 75

33. All investors with short option positions:

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34. Which of the following organizations guarantees the performance of standardized options contracts?

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35. When the US dollar weakens,

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

37 / 75

37. 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

38 / 75

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

39 / 75

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

40 / 75

40. 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

41 / 75

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

42 / 75

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

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43. A municipal finance professional at JoeBrokerDealer contributed $500 to the candidate in a local election, resulting in a ban on underwriting activity. A month later, the MFP joined a new municipal securities firm, JaneBrokerDealer. The remainder of the two-year ban will apply to

44 / 75

44. Though there are numerous business sectors in the US economy, companies generally fall into three distinct categories:

45 / 75

45. Which of the following statements is TRUE regarding the value of variable contract annuity units?

46 / 75

46. A significant number of public investors do not have a solid understanding of how common stock is offered to the public. Two methods are the secondary offering and the follow-on offering. Which of the below are true statements regarding these methods?

47 / 75

47. In order to receive a dividend, a shareholder must own stock as of the

48 / 75

48. The term ‘issuer’ most often refers to:

49 / 75

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

51 / 75

51. When opening a margin account, the agreement that customers sign to pledge their securities as collateral for a loan from the broker-dealer is the

52 / 75

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

53 / 75

53. Absent exceptional circumstances, NASDAQ trades during business hours are reported within:

54 / 75

54. 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,

55 / 75

55. Penny stocks present added risk to customers because of

56 / 75

56. A customer complaint is formally defined as a:

57 / 75

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

58 / 75

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

59 / 75

59. 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

60 / 75

60. 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?

61 / 75

61. Investors purchase common stock primarily for

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

63 / 75

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

64 / 75

64. 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:

65 / 75

65. Each member broker-dealer is required to have a principal executive monitoring the firm’s adherence to SRO as well as State and Federal laws and regulations, known as the firm’s

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66. Accumulation units are most often associated with:

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67. A client of yours purchased 1000 shares of RAL common stock on Monday, February 11th in a cash account at a CMV of $115 per share. The next day the stock moves to $128 on a very favorable news report and the client places an order to sell the 1000 shares at the market. On the Reg. T payment date the client has not paid for the purchase and asks that liquidation proceeds be used to cover the cost of the purchase.

68 / 75

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

69 / 75

69. Accrued interest is calculated from the

70 / 75

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

71 / 75

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

72 / 75

72. An individual contacts her financial representative to sell her mutual fund shares. The price she will receive is

73 / 75

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

I. Declaration date

73. II. Payment date

III. Record date

IV. Ex-dividend date

74 / 75

74. Keynesian economic theory deals with:

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75. A primary difference between Ginnie Mae and Fannie Mae/Freddie Mac is that Ginnie Mae

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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.