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Actual FINRA SIE Exam Dumps - Pass Exam With Good Scores
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| Topic |
Details |
| Topic 1 |
- Regulatory Entities, Agencies, and Market Participants: This section of the exam measures the skills of Financial Regulatory Analysts and covers the structure, authority, and jurisdiction of key regulatory bodies overseeing financial markets. The SEC's role in enforcing securities regulations is assessed, along with the authority of self-regulatory organizations such as FINRA and MSRB. Candidates must also understand the functions of other financial regulators, including the Department of the Treasury and state regulatory agencies. One key skill evaluated is identifying the jurisdictional scope of different financial regulators.
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| Topic 2 |
- 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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| Topic 3 |
- Market Structure: This section of the exam measures the skills of Equity Market Specialists and covers the classification of financial markets, including the primary, secondary, third, and fourth markets. Candidates must demonstrate knowledge of electronic trading, over-the-counter (OTC) markets, and physical exchanges. One specific skill tested is differentiating between various market types and their operational mechanisms.
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| Topic 4 |
- 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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FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q106-Q111):
NEW QUESTION # 106
A hypothecation agreement gives the broker-dealer the right to engage in which of the following activities?
- A. Using securities that a customer has bought on margin as collateral to obtain a loan from a bank
- B. Selling a customer's securities when the customer has failed to pay for trades in a cash account
- C. Entering trades in a customer's account without prior authorization from the customer
- D. Sharing customers' nonpublic personal information with nonaffiliated third parties
Answer: A
Explanation:
Step by Step Explanation:
* Hypothecation Agreement: Required for margin accounts, it authorizes the broker-dealer to use the customer's margin securities as collateral to secure loans for funding customer transactions.
* Incorrect Options:
* A: Sharing customer information is regulated under privacy rules (Regulation S-P).
* B: Unauthorized trading violates securities laws.
* C: Selling unpaid securities in cash accounts pertains to Regulation T, not hypothecation agreements.
References:
* FINRA Margin Account Rules: FINRA Rule 4210.
NEW QUESTION # 107
Class A and Class C shares of a mutual fund differ in which of the following ways?
- A. The net asset value (NAV)
- B. The underlying investments
- C. The expense ratio
- D. When the customer is permitted to purchase
Answer: C
Explanation:
Step by Step Explanation:
* Expense Ratio: Class A shares typically have lower ongoing expense ratios but higher front-end sales charges. Class C shares often have higher ongoing expense ratios but no front-end charges.
* Incorrect Options:
* B: NAV is determined daily and does not vary by share class.
* C: All share classes invest in the same underlying portfolio.
* D: Purchase timing is the same for all share classes.
References:
* SEC Guidance on Mutual Fund Share Classes: SEC Fund Classes.
NEW QUESTION # 108
How does an individual acquire restricted stock?
- A. By exercising publicly traded warrants
- B. By participating in an SEC Regulation D offering
- C. By exercising an option for exchange-traded calls
- D. By participating in an initial public offering (IPO)
Answer: B
Explanation:
Restricted stock refers to securities acquired through private placements, such as those offered under Regulation D. These securities are not registered with the SEC and are subject to holding period restrictions before resale.
* A is correctbecause Regulation D offerings involve private placements, resulting in restricted stock.
* Bis incorrect because IPOs involve publicly traded shares, not restricted stock.
* CandDare incorrect because restricted stock is not obtained through warrants or exchange-traded options.
NEW QUESTION # 109
A registered representative (RR) has a referral relationship with a family friend who is not affiliated with the financial industry. In the absence of a formal agreement, which of the following ways is the RR permitted to compensate the family friend for referrals?
- A. The RR is permitted to give the family friend prepaid credit cards equal to 50% of the commissions earned on the referrals.
- B. The RR is permitted to pay a flat-rate referral fee to the family friend.
- C. The RR is permitted to take the family friend out to dinner as a way to say thank you.
- D. The RR is permitted to split commissions with the family friend.
Answer: C
Explanation:
FINRA prohibits the payment of referral fees or splitting of commissions with individuals who are not registered with a broker-dealer. However, taking a friend out to dinner as a gesture of gratitude is allowed, as it does not involve cash or monetary compensation directly tied to the referral.
* C is correctbecause non-monetary expressions of gratitude (like a dinner) are permitted under FINRA rules.
* Ais incorrect because commission splitting with unregistered individuals is prohibited.
* Bis incorrect because paying referral fees is also prohibited without registration.
* Dis incorrect because giving prepaid credit cards tied to commission income violates compensation rules.
NEW QUESTION # 110
Which of the following statements is true regarding the SEC's characterization of a registration statement that has just been made effective?
- A. The SEC has determined that no material information has been omitted.
- B. The SEC has not passed judgment on the merits of the security being offered for sale.
- C. The SEC has approved the security being offered for sale.
- D. The SEC has found the information presented to be true and accurate.
Answer: B
Explanation:
Step by Step Explanation:
* SEC Registration Statements: The SEC reviews registration statements for completeness and compliance but does not judge the merits, approve, or endorse the securities being offered.
* Other Options:
* A, B, and C: Misrepresent the SEC's role in the registration process.
References:
* SEC Bulletin on Registration Statements: SEC Registration Process.
NEW QUESTION # 111
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