Securities Industry Essentials Exam (SIE)
Last Update Feb 28, 2026
Total Questions : 266
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Which of the following statements is true regarding the difference in treatment between common stock and preferred stock?
Which of the following entities settles broker-to-broker equity, listed corporate and municipal bond, and unit investment trust (UIT) transactions in the U.S. equities markets?
The Investment Company Act of 1940 requires that a minimum percentage of a fund's board members are “uninterested persons.” This requirement is best described as an attempt to:
Under which of the following circumstances, if any, is a member firm permitted to send gifts to registered representatives (RRs) of another member firm?
A mother wants to set up an account for her son so she can make yearly gifts but not allow her son to withdraw funds to pay for his living expenses. Which of the following account types best meets this objective?
Which of the following terms is used to describe a measure of the price volatility or correlation of a security in relation to movements in the overall market?
An investor owns $10,000 par value of a municipal bond with the following rates:
4.0% coupon rate
5.0% current yield
4.5% yield to maturity (YTM)
6.5% tax-equivalent yield
What amount of interest should the investor expect to receive each year?
A customer has four traditional Individual retirement accounts (IRAs): two are at banks, one Is held directly at a mutual fund, and one Is held in her brokerage account. In order to meet her required minimum distribution (RMD), which of the following actions is she required to take?
Which of the following statements describes a characteristic of exchange-traded funds (ETFs)?
Which of the following funds provides the highest liquidity for investors?
Which of the following customers Is eligible to open an institutional account at a broker-dealer?
SIPC provides investor protection for its members' customers in which of the following situations?
For which of the following account types will the partial ownership pass into an estate account upon the death of one of the individuals listed on the account?
A broker-dealer (BD) is underwriting an initial public offering (IPO). According to industry rules, which of the following customers is eligible to participate in the IPO?
Which of the following conditions typically has a negative effect on the value of an equity real estate investment trust (REIT)?
A bond with a par value of $1,000 that is backed by the taxing power of a local government is known as:
Which of the following must a registered representative disclose as an outside business activity (OBA) on his Form U4?
Which of the following characteristics describes the withdrawal provisions of a Coverdell Education Savings Account (ESA)?
Which of the following responses is an example of a bullish strategy, action, or position?
Which of the following statements best describes the permissibility of a borrowing arrangement between a registered representative (RR) and a customer who is also the RR's grandfather?
Which of the following statements is true of the writer of a listed equity call option?
A customer buys 100 ABC at $50 and at the same time sells an ABC April 50 call at $8. At expiration, ABC must be at what market price for the customer to break even?
A lien was filed against the property of a registered representative (RR) for their failure to pay a contractor for home remodeling work. Which of the following items is the RR’s broker-dealer (BD) required to file to reflect the lien, and within how many days of learning about the lien must the BD file?
Under FINRA rules, which of the following activities is not considered an outside business activity (OBA)?
On settlement date, a customer is unable to pay for a purchase in his cash account. His position is liquidated. Which of the following statements is true according to Federal Reserve Regulation T?
Which of the following responses describes a common feature of a hedge fund?
A customer wants to open an account to trade covered calls and puts. Which of the following communications must be provided to the customer prior to approving the account for trading?
Which of the following responses best describes the primary strategy that an investor uses when selling a covered call?
A confirmation indicates a 100-share purchase of Company ABC at $11. According to SEC rules, which of the following information is required to be stated on the confirmation?
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:
Which of the following entitles is primarily responsible for providing Internal settlement, accounting and tax support services for securities owned by an investment company?
Which of the following parties Is permitted to purchase a security in an Initial public offering (IPO)?
Which of the following statements best describes a characteristic of 529 savings plan accounts?
A company files a registration statement with the SEC to register a new Issue of securities. The company does not plan to sell all the registered shares at this time and instead plans to gradually sell new shares over a three-year period. This registration is called a:
An investor generally purchases an open-end mutual fund from which of the following parties?
A market maker quotes the market on an NMS equity security as 39.05 - 39.15 [5x10]. Which of the following orders is the market maker required to fill?
Under SEC Regulation A, which of the following market participants, if deemed to be a bad actor, will disqualify the offering from reliance on this registration exemption?
Which of the following characteristics is true of open-end mutual fund shares?
A broker-dealer (BD) signs a selling agreement with the ABC family of mutual funds. To introduce the funds to the BD’s sales force, ABC offers a training and education trip at a popular beach resort. The trip expenses will be covered by ABC for the three registered representatives in the BD who have the highest level of production in ABC funds during the month. The BD’s branch office managers assess each sale of ABC funds to ensure that the BD’s recommendations are aligned with the customers’ investment objectives and risk tolerance. Which of the following statements best describes the permissibility of this arrangement?
Which of the following is the primary risk of using asset allocation models without periodic rebalancing?
A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA’s endorsement of the BD. Which of the following responses is true?
A broker-dealer (BD) is considering employing a nonregistered person to assist its sales staff in servicing customers. Which of the following activities are nonregistered persons permitted to perform?
Which of the following economic theories or models is based on the belief that the supply of money in an economy is the primary driver of economic growth?
Which of the following is the term for a filing for a distribution of securities in which the issuer has up to three years after the effective date of registration to sell the securities?
A 529 savings plan investment is most appropriate for which of the following individuals?
Which of the following transactions is most profitable if executed prior to a significant rise in a company's stock price?
Under which of the following circumstances, if any, is a registered representative (RR) permitted to share in the profits and losses of security interests that the RR has purchased jointly with a customer?
A grandfather establishes a Uniform Transfers to Minors Act (UTMA) custodial account for his grandson and appoints an attorney as custodian. Which of the following individuals owns the account?
An investor wants to purchase additional mutual fund shares with income distributed by the fund. Which of the following fund options permits this?
If a company with a single outstanding bond issue chooses to extinguish this debt through refunding, which of the following actions will occur?
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?
Under MSRB rules, which of the following information is a municipal securities dealer required to provide annually in writing to each of its customers?
A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA's endorsement of the BD. Which of the following responses is true?
The Investment Company Act of 1940 requires that investment companies limit the percentage of interested persons that serve on their boards of directors. This limitation seeks to mitigate or eliminate which of the following risks?
At least how often Is a firm required to provide a customer with a statement In writing as to the availability of an Investor brochure posted on the MSRB website?
(AC?)
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?
Under SEC Regulation D, which of the following parties is considered an accredited investor?
An investor owns 200 shares of ABC common stock and sells four ABC calls. How many of those calls, if any, are covered by the ABC common stock position?
The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?
An investor holds 1,000 shares of a stock with a total cost basis of $5,000 in his account when a 1-for-5 reverse stock split is announced. What will be the investor's total cost basis after the payable date of the reverse split?
Under the SEC’s Recordkeeping and Retention Requirements Rule, a broker-dealer is required to keep which of the following records for the lifetime of its existence?
Which of the following documents must a firm provide to a customer upon the purchase of a mutual fund?
A registered representative (RR) reads an article online about a thinly traded security that the RR believes has a high likelihood of rapid growth and price appreciation. The RR purchases shares of the security in their own account and recommends to a number of high net worth customers that they purchase shares as well. After the RR's customers make several purchases of the security, the price appreciates, as the RR expected. The RR liquidates their position for a profit and subsequently recommends to customers that they do the same thing. Which of the following statements is true regarding this scenario?
Which of the following terms refers to the process in which the buying firm must pay for the securities and the selling firm must deliver the securities?
A customer will be out of the country for the next two months on business and asks his firm to hold his mail until he returns. Which of the following statements is true regarding this request?
Which of the following characteristics best describes a benefit of a variable annuity subaccount?
Which of the following investors is permitted to purchase shares in an equity initial public offering (IPO)?
Which of the following statements is true of the comparison between penny stocks and blue-chip stocks?
TESTED 28 Feb 2026
