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These FINRA SIE exam questions give you an idea about the final FINRA SIE exam questions formats, exam question structures, and best possible answers, and you will also enhance your exam time management skills. Finally, at the end of SIE Exam Practice test you will be ready to pass the final SIE exam easily. Best of luck in Securities Industry Essentials Exam (SIE) (SIE) exam and professional career!!!
| Topic |
Details |
| Topic 1 |
- Understanding Products and Their Risks: This section of the exam measures the skills of Investment Analysts and examines different financial products and associated risks. Candidates must understand equity securities, including common stock, as well as debt instruments such as Treasury securities and mortgage-backed securities.
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| Topic 2 |
- Employee Conduct and Reportable Events: This section of the exam measures the skills of Financial Compliance Specialists and covers regulatory expectations regarding employee conduct and disclosure requirements. Candidates must be familiar with Form U4 and Form U5, as well as reporting obligations for outside business activities and political contributions.
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| Topic 3 |
- Overview of the Regulatory Framework: This section of the exam measures the skills of Compliance Officers and evaluates knowledge of self-regulatory organization (SRO) requirements, including registration and continuing education for associated persons. Candidates must understand the distinction between registered and non-registered individuals and the requirements for maintaining industry qualifications.
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| Topic 4 |
- Understanding Trading, Customer Accounts, and Prohibited Activities: This section of the exam measures the skills of Securities Traders and focuses on different trading strategies, settlement processes, and corporate actions. Candidates must demonstrate knowledge of order types, including market, limit, stop, and good-til-canceled orders, as well as bid-ask spreads and discretionary versus non-discretionary trading.
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FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q25-Q30):
NEW QUESTION # 25
SEC regulations permit a company to issue securities exempted from registration requirements of the Securities Act of 1933 under which of the following conditions?
- A. Offerings with no more than 35 non-accredited investors and an unlimited number of accredited investors
- B. Offerings sold with an aggregate price exceeding $5 million
- C. Offerings sold with no more than 40 accredited investors
- D. Offerings sold inside of the U.S. to non-U.S. persons
Answer: A
Explanation:
Step by Step Explanation:
* Regulation D (Rule 506(b)): Allows offerings to an unlimited number of accredited investors and up to
35 non-accredited investors, provided certain disclosure requirements are met.
* Incorrect Options:
* A: Refers to Regulation S, which governs offshore offerings, not domestic exemptions.
* B: There is no 40-investor limit in Regulation D.
* C: The $5 million limit applies to Rule 504, not Rule 506(b).
References:
* SEC Regulation D: SEC Regulation D.
NEW QUESTION # 26
A rating agency downgrades a corporation's credit rating. Which of the following effects is this action most likely to have on the yield and price of the corporation's outstanding bonds?
- A. Yield will fall; price will fall.
- B. Yield will rise; price will fall.
- C. Yield will fall; price will rise.
- D. Yield will rise; price will rise.
Answer: B
Explanation:
Step by Step Explanation:
* Credit Downgrade: Increases perceived risk, causing bond prices to drop and yields to rise.
* Yield-Price Relationship: Yields move inversely to bond prices. Lower prices lead to higher yields as investors demand more return for increased risk.
References:
* SEC Guidance on Bond Ratings: SEC Bond Ratings.
NEW QUESTION # 27
A municipal securities dealer makes a political contribution of $990 to a local mayoral candidate. At the end of the quarter, to whom, if anyone, must the dealer report the contribution?
- A. MSRB
- B. SEC
- C. No disclosure required as the amount is below the reporting threshold
- D. FINRA
Answer: A
Explanation:
Step by Step Explanation:
* MSRB Rule G-37: Requires municipal securities dealers to report contributions to the MSRB, even if the amount is below the $1,000 threshold that would trigger a two-year prohibition on municipal business.
* Incorrect Options:
* SEC and FINRA: Not involved in reporting political contributions for municipal securities.
References:
* MSRB Rule G-37 (Political Contributions): MSRB Rule G-37.
NEW QUESTION # 28
An investor generally purchases an open-end mutual fund from which of the following parties?
- A. The fund's custodian
- B. The fund's underwriter
- C. An existing shareholder
- D. The NYSE
Answer: B
Explanation:
Step by Step Explanation:
* Open-End Mutual Funds: Shares are purchased directly from the fund or its underwriter at the current Net Asset Value (NAV), plus any applicable sales charges.
* Custodian: Holds the fund's assets but does not sell shares.
* NYSE and Shareholders: Open-end funds do not trade on exchanges or between individual shareholders.
References:
* SEC Mutual Fund Basics: SEC Mutual Funds.
NEW QUESTION # 29
A registered representative (RR) opens a new account for a customer whose investment objectives are growth and income. She makes an initial deposit of $5,500 using a series of money orders drawn from different sources, and she makes no investments for the first 30 days the account is open. At the end of that time, the customer asks to have the funds wired to an account at a different firm as her needs have changed. The RR's first course of action should be to:
- A. Accept the instructions and wire the funds.
- B. Deny the request.
- C. Report internally as a suspicious activity.
- D. Freeze the account.
Answer: C
Explanation:
Step by Step Explanation:
* Suspicious Activity: The use of multiple money orders, lack of investment activity, and request to wire funds to another firm raise red flags for potential money laundering.
* FINRA Rules: The RR should escalate the issue by reporting internally and potentially filing a Suspicious Activity Report (SAR).
* Incorrect Options:
* A: Denying the request without investigation may violate customer instructions.
* B: Freezing the account requires a valid legal or regulatory basis.
* D: Processing the request without investigation could facilitate illegal activity.
References:
* FINRA Anti-Money Laundering (AML) Guidance: FINRA AML Rules.
NEW QUESTION # 30
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