SIE Practice Exam 1

Taking the SIE (Securities Industry Essentials) Practice Exam 1 is your first step towards gaining essential knowledge. Practice Exam 1 will empower you to understand the core concepts of the securities industry and prepare for a successful career.

The SIE Practice Exam 1 comprises 40 multiple-choice questions designed to be similar to those you might find on the actual SIE exam. This practice test is untimed, so you can have all the time you need to finish the exam.

You can also take our timed FINRA-like SIE practice exam, which consists of 75 multiple-choice questions with a time limit of 1 hour and 45 minutes.

Now, going back, each question of this practice exam has a detailed explanation of the correct answer.

Once you’re done answering all 40 questions, you can see your score, review your wrong answers, and check if you have achieved the 70% pass rate.

You can retake this free SIE Practice Exam 1 as many times as you like.

SIE Practice Exam 1: Knowledge of Capital Markets

Our 1st batch of SIE practice questions focuses on the fundamental aspects of capital markets. This practice exam covers topics such as regulatory entities and agencies like the Securities and Exchange Commission (SEC) and Self-regulatory Organizations (SROs) such as FINRA and CBOE.

Are you ready to take this test?

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

1. NASDAQ market makers wishing to increase the ADTV (average daily trading volume) they handle in those stocks:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

2. Keynesian economic theory deals with:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

4. 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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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

6. The Securities & Exchange Commission (SEC) was created by Congress in:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

7. An upward sloping yield curve indicates

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

8. Investors purchase common stock primarily for

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

9. When an investor is bearish on the broad stock market

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

11. Investment company financial statements are sent to shareholders

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

12. The Securities & Exchange Commission was formed as part of

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

13. Regulation SHO severely restricts short selling during the cooling offer period of a follow-on offering. Which of the below is true?

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

14. The spread between bid and offer

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

15. When calculating total return on a bond,

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

16. Among the most significant differences between an open-end investment management company and a unit investment trust is that:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

17. One of the most frequently issued money market instruments is commercial paper. Typically, this investment has a maximum maturity:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

18. All of the following are features of ETFs EXCEPT

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

19. Which of the following terms describes a broker-dealer’s practice of interjecting another broker-dealer into the middle of a trade, resulting in an increase in commission at the customer’s expense?

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

25. The Nasdaq market is a(n)

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

27. 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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

28. 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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Category: SIE Practice Exam 1: Knowledge of Capital Markets

29. 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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Category: SIE Practice Exam 1: Knowledge of Capital Markets

30. The security instrument most often associated with enabling a US investor to facilitate trading in foreign stock is:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

31. In most cases, Federal Securities Laws:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

32. Commercial paper, bankers’ acceptances, and large-time deposits are part of what segment of the fixed-income market?

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

34. Certain securities are marginable under Regulation T of the Securities & Exchange Act of 1934 except:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

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

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

37. Dollar limits on 529 plan contributions per beneficiary are set by

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

38. The principal difference between a selling syndicate and a selling group would be:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

39. When an investor writes a covered call, the client’s profit and loss potential on that position becomes:

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Category: SIE Practice Exam 1: Knowledge of Capital Markets

40. When a corporation announces that it is seeking additional equity capital through a sale of additional authorized but unissued shares,

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Looking for More Practice Questions?

If you’ve already mastered our SIE Practice Exam 1 or want to test your knowledge of SIE with regard to other topics, you can check out our other sets of practice tests.