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FINRA SIE TEST FINAL EXAM, STUDY GUIDE AND
PRACTICE EXAM 2025|REAL EXAM QUESTIONS
AND ANSWERS|GRADED A+
What is the cost basis of an inherited mutual fund? The net asset value (NAV) of the shares when the owner dies In a period of low inflation and economic recession, the Federal Reserve is expected to take which of the following actions? Buy bonds in the open market At the time of issuance, which of the following securities normally has the largest period to expiration? Warrants A married couple who earned income that exceeded $300,000 in each of the prior two years and reasonably expects the same for the current year is: An accredited investor A broker-dealer is permitted to accept payment for a new issue from a new customer when the: registration is effective.
Under the Securities Act of 1933, registration is required for which of the following securities? American Depositary Receipts (ADR's) Which of the following actions is required of a broker-dealer's anti-money laundering (AML) program? Designating an AML compliance officer No-load mutual funds may have lower expense ratios than load mutual funds for which of the following reasons? No-load funds are not permitted to charge a 12b-1 fee greater than 25 basis points Company ABC announces a 20% stock dividend for its common shareholders. If a customer holds 1,000 shares at $50.00, what is the new price and number of shares following the payment of the stock dividend? 1,200 shares at $41.
this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many, if any, of the investor's shares will the company purchase? 1, Under Federal Reserve Regulation T, a 90-day restriction is imposed when a customer opens and closes which of the following positions? The same stock in a cash account without paying for the stock in full A member of a stock exchange responsible for providing liquidity in a security by being willing to buy and sell at all times is known as: A Market Maker When selling a fixed amount of a base currency to purchase a counter currency, which of the following factors is primarily used to determine how much of the counter currency the customer will receive? The spot exchange rate In the over-the-counter market, the term "spread" refers to the difference between the: Bid and asked prices
At issue, which of the following debt securities mature in one year or less? Money market instruments Which of the following considerations should a registered representative explain to a customer when recommending a 529 savings plan? The potential deductibility of contributions from state taxes Stability in the value of a debt portfolio is greatest when: Maturities of the debt securities are short As associated person who is not a registered representative is permitted to engage in which of the following activities: Provide account opening forms to a new customer A firm is a participant in a public offering. To sell a substantial amount of the securities to its customers, the firm agrees to repurchase the shares at no less than the original sales price. Such agreements are: Prohibited as fraudulent and manipulative. Under normal circumstances, a customer's letter of intent on a mutual fund purchase is valid for what maximum period of time? 13 Months
Which of the following statements is true regarding a customer account held as tenants in common? The ownership of the decedent's assets is governed by their will or state law. Which of the following investment risks is the greatest risk in a variable life insurance policy? Market risk An investor owns 100 shares of XYZ common stock at the current market price of $50 per share. If XYZ conducts a 1-for-2 reverse stock split, the investor's post-split stock position will be: 50 shares at $100 per share Which of the following actions violates FINRA rules regarding selling away? Engaging in private securities transactions without written prior consent of the employing BD When is interest on Treasury notes paid? Semiannually
In the event of a stock split, which of the following parties is required to maintain a record of the shareholders eligible to receive the additional shares? Transfer agent Which of the following represents the effect of a stock split? The price per share of common stock decreases. Which of the following statements is true about treasury stock? It is issued stock that has been subsequently reacquired by the corporation. Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of: $2, The primary purpose of a syndicate desk in the context of an equity offering is to: build an order book and allocate the stock.
Upon expiration, all in-the-money S&P 100 index call options are settled by the delivery of which of the following? Cash The redemption value of an open-end investment company's shares is based on the: NAV computed after the order is received. Which of the following actions is required when a firm receives cash in excess of $10,000 from one customer in one business day? File a Currency Transaction Report (CTR) UTMA accounts are opened under the tax ID of the: minor. If a market maker posts a quote of 10.00 - 10.10 [25x10], which of the following actions is the market maker willing to take? Buy 2,500 shares at $10.00 and sell 1,000 shares at $10.
Under SEC Regulation S-P (Consumer Privacy), which of the following information must a firm include in its customer privacy and opt-out notices? The policies to protect the security of nonpublic information Which of the following investments are generally traded according to their average life rather than their stated maturity dates? Asset-backed securities To offer its shareholders a privilege to obtain its shares at a fixed price, which of the following products does a corporation issue? Rights Which of the following statements is true regarding the concept of an annuity contract? The kind of annuity selected partly determines the payment amounts to the annuitant. A decline in the gross domestic product (GDP) must last for at least how many quarters to be considered a recession? 2 quarters
Nonsystematic All of the following risks apply to both foreign and domestic debt instruments except: exchange. The call provision of a bond stipulates which of the following factors? Call date and call price Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in which the mayor is currently seeking re-election. A municipal finance professional who resides in the town and works for ABC contributed $200 to the mayor's re-election campaign 13 months ago. If the employee wants to support the campaign further without impacting the municipal securities business of the firm, he is permitted to make an additional contribution of up to what amount? $ Which of the following statements is true about all U.S. government agency issues? They are exempt from registration under the Securities Act of 1933.
A registered representative (RR) wants to participate in a private securities transaction. Which of the following actions must the RR take? Send written notice to his supervisor outlining the activity and compensation structure Which of the following Form U4 reportable events results in a statutory disqualification? A felony conviction for a driving under the influence (DUI) charge Roth 401(k) and Roth individual retirement account (IRA) plans share which of the following features? Qualified distributions are excluded from federal income tax. The owner of which of the following products is MOST exposed to inflationary risk? Treasury bonds A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling at what price per share at expiration? $
B. build an order book and allocate the stock C. solicit interest from investors in the stock offering D. chaperone company management during the road show B In a period of low inflation and economic recession, the Federal Reserve is expected to take which of the following actions? A. decrease taxes B. raise the federal funds rate C. buy bonds in the open market D. require banks to increase reserves C Which of the following communications with the public is considered misleading? A. historical illustrations based on factual performance B. product comparisons that illustrate material differences C. a research report that includes a buy recommendation for a specific security D. literature providing 10-year performance information to support predictions of future performance D
Under the Securities Act of 1933, registration is required for which of the following securities? A. eurodollar bonds B. municipal securities C. American depositary receipts (adrs) D. securities issued by the federal government C A savings account at a bank is guaranteed by which of the following entities? A. FDIC B. SIPC C. Federal Reserve D. Department of Treasury A To offer its shareholders a privilege to obtain its shares at a fixed price, which of the following products does a corporate issue? A. puts B. rights
C
Which of the following statements is true about treasury stock? A. it has voting rights B. it receives dividends C. it is issued stock that has been subsequently reacquired by the corporation D. it is authorized stock that has not been issued and is held in the corporation's treasury C Which of the following outcomes are possible for the writer of a covered call option? A. profit limited and loss limited B. profit limited and loss unlimited C. profit unlimited and loss limited D. profit unlimited and loss unlimited A
The computation of dollar prices and accrued interest on municipal bonds is normally on what calendar basis? A. 30/ B. 30/ C. actual/ D. actual/ A A registered representative is reviewing the following portfolio:
- 30% ABC energy company
- 30% XYZ health care company
- 30% exchange-traded fund
- 10% money market funds Which of the following risks is inherent in this portfolio? A. credit B. liquidity C. political D. nonsystematic D
