SIE Finals

Question 1

What should an investor enter if they want to receive immediate execution?

Answer 1

A Market Order

Question 2

What is a customer who exceeds SIPC limits?

Answer 2

General Creditor

Question 3

Do growth dividends have high or low payout ratios?

Answer 3

Low

Question 4

What is the dollar amount of this T bond? 92.29

Question 5

short-term municipal financing issued in anticipation of receiving a grant from the federal government or one of its agencies.

Answer 5

Grant anticipation notes

Question 6

What is a time draft and facilitates foreign trades?

Answer 6

Bankers Acceptance

Question 7

What is quoted on a discount yield basis?

Answer 7

Treasury bills

Question 8

income payments, and hence value, are derived from and collateralized by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets which are unable to be sold individually.

Answer 8

Asset backed securities

Question 9

the interest on a bond or loan that has accumulated since the principal investment, or since the previous coupon payment if there has been one already.

Answer 9

Accrued interest

Question 10

A charge against a property that receives benefit from improvement.

Answer 10

Special assessment bond

Question 11

What has seniority in a liquidation process?

Answer 11

Mortgage bonds

Question 12

Minimum denomination for CDs are?

Answer 12

$100,000

Question 13

municipal debt securities issued by a government agency on behalf of a private sector company and intended to build or acquire factories or other heavy equipment and tools.

Answer 13

Industrial Development Bonds

Question 14

timing of payment of dividends on stocks of corporations, income trusts, and other financial holdings, both publicly and privately held.

Answer 14

Ex-date

Question 15

the fraction of net income a firm pays to its stockholders in dividends

Answer 15

Dividend payment

Question 16

a daily finance newspaper that covers the municipal bond market and tracks 40 highly-rated, long-term municipal bonds.

Answer 16

Bond buyers index

Question 17

Price you paid on your shares. Helps determine gain or loss.

Answer 17

Cost basis

Question 18

What is found by dividing the annual dividend by the current market price?

Answer 18

Stock yield

Question 19

the sale of a mutual fund at a set dollar amount that allows the fundholder to move into a lower sales charge bracket.

Answer 19

Breakpoint sale

Question 20

an investment product offering a fixed portfolio of securities having a definite life.

Answer 20

Unit investment trust

Question 21

When should a payment be sent if a client redeems mutual fund shares?

Answer 21

7 days

Question 22

What fund invests in stocks in a specific geographic area?

Answer 22

Specialty fund

Question 23

primarily a form of ownership in a corporation, representing a claim on part of the company’s assets and earnings.

Answer 23

Common stock

Question 24

Responsible for safeguarding securities owned by a mutual fund.

Answer 24

Custodian bank

Question 25

fund that invests solely in businesses that operate in a particular industry or sector of the economy and is least likely to provide income.

Answer 25

Sector fund

Question 26

Ability to receive cumulative quantity discounts

Answer 26

Rights of accumulation

Question 27

Does a clients number of annuity units ever change?

Answer 27

No

Question 28

an insurer deposits premiums from policies it underwrites and from which it funds day-to-day operations of the business.

Answer 28

General account

Question 29

Designed to deliver multiples of the performance of an index or other benchmark.

Answer 29

ETFs

Question 30

Debt instruments linked to the performance of the commodity, currency, or index.

Answer 30

ETNs

Question 31

REITs must have 200 shareholdes. T or F

Answer 31

False, they must have 100.

Question 32

What is the typical maturity for ETNs

Answer 32

10-30 years.

Question 33

What do accredited investors purchase the most?

Answer 33

Hedge funds.

Question 34

a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to improve investment performance and insulate returns from market risk.

Answer 34

Hedge Fund

Question 35

a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the bid–ask spread, or turn.

Answer 35

Market Maker

Question 36

How much is the max amount for political donations?

Answer 36

$250

Question 37

the inappropriate practice of an investment professional who sells, or solicits the sale of, securities not held or offered by the brokerage firm with which he is associated.

Answer 37

Selling away

Question 38

They sell securities to individuals, advise companies in search of investors, and conduct trades and charge a commission.

Answer 38

Agent

Question 39

a mutual fund in which shares are sold without a commission or sales charge.

Answer 39

No load fund

Question 40

Used to keep the price of a newly issued stock from falling.

Answer 40

Stabilization

Question 41

When do equity options settle when they are exercised?

Answer 41

2nd business day

Question 42

An upfront sales charge investors pay when they buy fund shares.

Answer 42

Front end load

Question 43

If a bond is trading at a discount, the YTM and YTC are higher than the nominal yield. T or F?

Answer 43

True

Question 44

The coupon rate of a fixed income security is the interest rate that the issuer agrees to pay to the security holder each year, expressed as a percentage of the security's principal amount or par value.

Answer 44

Nominal Yield

Question 45

Risk to the entire market, not just one particular stock or industry.

Answer 45

Systematic or Market Risk

Question 46

Each option contract is based on how many shares of common stock/

Answer 46

100

Question 47

Are disclosures required if the execution occurred in the primary or secondary market?

Answer 47

Primary

Question 48

What is less liquid? Blue chip stocks or Penny stocks?

Answer 48

Penny stocks

Question 49

What is the minimum deposit requirement for a new short sale in a new margin account?

Answer 49

$2,000

Question 50

When buying EFTs, you pay...?

Answer 50

Market price plus commission

Question 51

Cash flow received from a dividend/interest, plus the appreciation or the depreciation in the value of an investment.

Answer 51

Total Return

Question 52

The rate that banks charge their most creditworthy customers, typically corporations. it is a lagging indicator, not leading.

Answer 52

Prime Rate

Question 53

Execution of an order ahead of a customer order to gain profit or limit loss

Answer 53

Frontrunning

Question 54

Max gift to 529 plans is?

Answer 54

$17,000 per person per year.

Question 55

A person cannot front load a 529 plan for 5 years without consequences. T or F?

Answer 55

False, they can

Question 56

If a RR is fired or quits, when and where should the firm notify FINRA?

Answer 56

Form U5 in 30 days.

Question 57

Excess trading in a customers account

Answer 57

Churning

Question 58

Diversifiable risk is called?

Answer 58

Regulatory Risk

Question 59

The market is assigned a beta coefficient of ??

Answer 59

1.0

Question 60

can measure the volatility of an individual stock compared to the systematic risk of the entire market.

Answer 60

Beta Coefficient

Question 61

a type of public offering where certain issuers are allowed to offer and sell securities to the public without a separate prospectus for each act of offering and without the issue of further prospectus.

Answer 61

Shelf Registration

Question 62

Broker dealers must maintain records of wire transfers of how much?

Answer 62

$3,000

Question 63

ERISA

Answer 63

Employee Retirement Income Security Act

Question 64

Making adjustments to the investments in a portfolio based on changes that are made to a market index or average.

Answer 64

Indexing

Question 65

A call option sold against a position

Answer 65

Covered Call

Question 66

Issued to obtain indications of interest on a prospectus new issue of securities

Answer 66

Red Herring

Question 67

Funds have to send payments of redeemed mutual fund shares in??

Answer 67

7 days

Question 68

How much is each index point?

Answer 68

$100

Question 69

How long must a BD keep records if an account is closed?

Answer 69

6 years

Question 70

Above market price, sell at limit or higher

Answer 70

Sell limit order

Question 71

Below market price, market price falls or below stop price.

Answer 71

Sell stop order

Question 72

ADRs must be registered under what?

Answer 72

Securities Act of 1933

Question 73

A variable annuity is an accounting measure used to determine the contract owners interest in the separate account.

Answer 73

Accumulation Unit

Question 74

Individuals are referred to as?

Answer 74

Separate customers

Question 75

How long must customer complaints be kept?

Answer 75

4 years

Question 76

A type of fund that invests primarily in a particular industry or geographical area is a ?

Answer 76

Specialized fund

Question 77

states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.

Answer 77

Efficient Market Hypothesis

Question 78

If a stock index call option is exercised, the writer must deliver cash. True or False?

Answer 78

True

Question 79

Money received by a corporation when it sells its stock above its par value.

Answer 79

Paid- in Capital

Question 80

Insider trading penalty

Answer 80

$5,000,000 fine and/or 20 years in prison

Question 81

Type of analysis that uses a specific company's financial information and the direction being taken by the company's management is?

Answer 81

Fundamental

Question 82

guarantees the payment of any missed dividends to shareholders.

Answer 82

Cumulative Preferred stock

Question 83

pays a dividend and can be converted into common stock at a fixed conversion ratio after a specified date.

Answer 83

Convertible Stock

Question 84

pay both preferred dividends plus an additional dividend to their shareholders.

Answer 84

Participating Stock

Question 85

an investor borrows a security, sells it on the open market, and expects to buy it back later for less money.

Answer 85

Short Stock

Question 86

You own the stock.

Answer 86

Long stock

Question 87

Proportionate ownership will not be diluted if additional shares are issued.

Answer 87

Preemptive rights

Question 88

allows you to borrow money from a brokerage firm to buy securities.

Answer 88

Margin account

Question 89

commissions, markups, and markdowns of more than 5% are prohibited on standard trades, including over-the-counter and stock exchange listings, cash sales, and riskless transactions.

Answer 89

5% Markup policy

Question 90

the process of changing the weightings of assets in an investment portfolio. It is like a tune-up for your car: it allows individuals to keep their risk levels in check and minimize risk.

Answer 90

Portfolio rebalancing

Question 91

offering an asset of value (collateral) as backing a loan. If you default on the loan, the lender can take the asset to recoup their money.

Answer 91

Hypothecation Agreement

Question 92

A BD failing to honor a firm quote.

Answer 92

Backing away

Question 93

known for following the cycles of an economy through expansion, peak, recession, and recovery.

Answer 93

Cyclical stock

Question 94

a financial instrument used to document and identify a stock seller's obligation to deliver a pending dividend to the stock's buyer.

Answer 94

Due bill

Question 95

an insurance product that provides an income for life to both partners in a marriage.

Answer 95

Join with Last survivor life annuity

Question 96

unpaid interest related to credit cards, loans, investments, savings and beyond.

Answer 96

Accrued Interest

Question 97

, arises from the change in price of one currency in relation to another.

Answer 97

Currency Risk

Question 98

the potential risk where future proceeds, such as the coupon payments or debt principal, will need to be reinvested at a lower interest rate compared to the original yield

Answer 98

Reinvestment Risk

Question 99

a written communication regarding securities being publicly offered disseminated by the issuer during the waiting period of an initial public offering (IPO) that discloses information that would not be included in the registration statement.

Answer 99

Free writing prospectus

Question 100

a legal document that states the objectives, risks, and terms of an investment involved with a private placement.

Answer 100

Offering Memorandum

Question 101

debt security issued by a government to support government spending and obligations

Answer 101

Government Bonds

Question 102

a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, mergers & acquisitions, or to expand business.

Answer 102

Corporate Bonds