SIE Practice Exam 3

The SIE Practice Exam 3 has 25 multiple-choice questions designed to be similar to those you might find on the actual SIE exam.

The correct answer will be revealed instantly (in case you got it wrong), along with a detailed explanation for each question that you answered. At the end of practice exam 3, you will be able to see your score, review your mistakes, and check if you have achieved the 70% passing rate.

You can retake this free SIE practice exam 3 as many times as you like.

SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

Our 3rd batch of SIE practice questions focuses on various aspects of securities trading and customer accounts in the financial industry, as well as the prohibited activities associated with these areas. This practice exam covers topics such as types of trading orders, investment returns, trade settlement processes, and corporate actions.

Are you ready to take this test?

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

1. 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.

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

2. A customer complaint is formally defined as a:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

3. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

4. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

I. Declaration date

5. II. Payment date

III. Record date

IV. Ex-dividend date

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

6. A short call is:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

7. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

8. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

9. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

10. The Securities Industry Essentials examination gives a candidate;

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

11. A market maker is obligated

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

12. Making cold calls to prospects in accordance with the telemarketing consumer protection act may only be done:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

13. Reinvestment risk is least present in:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

14. The so-called 5% policy pertains to

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

15. Regulation S-P principally deals with:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

16. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

17. All of the following sectors are considered cyclical EXCEPT

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

18. A registered representative located in California makes a 7:30pm cold call to a potential customer in New Jersey. This is

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

19. When institutional investment managers open brokerage accounts at several clearing broker-dealers, those clearing broker-dealers process the transactions and have the back-office clearing and processing handled through a single broker-dealer. This firm is identified in the SEC and FINRA regulations as a:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

21. The order of liquidation in a limited partnership is

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

22. Not all corporate securities offerings are required to be registered with the SEC. An offering done under Regulation D is often called:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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24. Mitigation of the risk of loss in a bearish market can be achieved by customers with vulnerable long stock positions placing:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

25. What tax benefit do municipal bonds offer to individual U.S. investors?

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

29. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

30. The primary difference between a stock dividend and a cash dividend is:

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

32. A customer of a brokerage firm must receive a customer account statement with which of the following frequencies?

I. Monthly if there has been any activity in the account

II. Monthly

III. Weekly if there has been any activity in the account

IV. A minimum of at least quarterly

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

33. When the US dollar weakens,

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

34. A large institutional client of yours has discussed their imminent intent to place a very large purchase order for the stock of XYZ. As the agent of record, you place an order immediately in your own account prior to placing the client’s order.

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

35. Accumulation units are most often associated with:

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

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

37. 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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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

38. Penny stocks present added risk to customers because of

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

39. The theory that says the economy is best controlled through taxation and government spending is known as

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Category: SIE Practice Exam 3: Trading, Customer Accounts & Prohibited Activities

40. 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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If you’ve already mastered our SIE Practice Exam 3 or want to test your knowledge of SIE with regard to other topics, you can check out our other sets of practice tests.