SIE Exam Practice Questions Flashcards

Vocabulary flashcards based on SIE 4.0 Zoom Manual content.

SIE Exam Passing Score

70%

SIE Testing Window Validity

120 days after registration

Who pays the SIE exam fee initially?

The candidate (reimbursed by Primerica after passing)

Document for SIE Exam Registration

Form U4

SIE Exam Wait Time After Two Failures

30 days

Securities Act of 1933 Purpose

Ensure full disclosure for new issues (primary market)

Co-requisite Exam for Registered Representative

Series 6 or Series 63 (depending on state)

SIE Exam Administrator

FINRA

SIE Exam Eligibility Lapse

4 years if not paired with a 'Series' exam

FINRA Rule Violation During SIE Registration

Failing to disclose a misdemeanor

Stock Dividend Effect on Share Price (20% dividend)

Decreases the share price. Example: Original price of $60 becomes $50.

Shareholder Right to Maintain Proportional Ownership

Pre-emptive rights

Treasury Stock Definition

Repurchased shares held by the issuer

Market Cap Classification ($8 billion)

Mid-cap

Taxable Dividend Type

Cash dividend

Reverse Stock Split Effect

Fewer shares at a higher price

Security Representing Ownership in a Foreign Company (traded in the U.S.)

ADR (American Depository Receipt)

Rule 144 Regulation

Sale of restricted securities

Penny Stock Trading Price

Below $5 per share

Shareholder Voting Rights

Common stock

Corporate Action Requiring Shareholder Approval

Mergers

Tender Offer Definition

An invitation to buy securities at a premium

Proxy Material Distribution

Broker-dealers

Dividend Declaration Date Setting

The Board of Directors

Authorized but Unissued Shares Rights

Have no shareholder rights

Bond's Yield to Maturity (YTM) Reflects

Total return if held to maturity

Bond Secured by Real Estate

Mortgage bond

Treasury Bond Interest Exemption

State taxes

Zero-Coupon Bond's Return

Capital appreciation

Bond Type Most Sensitive to Interest Rate Changes

30-year corporate bond

Bond Trading at 102 Price

$1,020

Tax Treatment of Municipal Bond Interest

Tax-free federally

Callable Bond Calling Likelihood

When interest rates fall

Bond Backed by a Corporation's General Credit

Debenture

TIPS Adjust For

Inflation

Bond Current Yield Calculation (5% coupon, $900 purchase)

5.56%

Bond with Highest Default Risk

BB corporate

GNMA Pass-Through Certificates Backing

Mortgages

Bond's Duration Measures

Interest rate sensitivity

Short-Term Money Market Instrument

Commercial paper

Open-End Mutual Fund Shares Transaction

Redeemed by the issuer

12b-1 Fee Coverage

Marketing/distribution costs

Fund Type with Fixed Portfolio

UIT (Unit Investment Trust)

Fund Expense Ratio Meaning (2%)

$2 per $100 invested annually

Breakpoints Reduce

Sales loads

ETF Shares Trading

On exchanges

Mutual Fund NAV Calculation

Daily

Share Class with No Front-End Load but Higher Annual Fees

Class C

Fund Investment Amount After Front-End Load (5% load on $10,000)

$9,500

Money Market Fund Investment

Short-term debt

Tax Advantage of a 529 Plan

Tax-free growth for education

REIT Distribution Requirement

At least 90% of taxable income as dividends

Hedge Fund Investor Type

Accredited investors

ETF Tax Efficiency Source

In-kind redemptions

Variable Annuity Returns Dependence

Market performance

Call Option Right

Buy the underlying asset

Put Option Breakeven ($50 strike, $3 premium)

$47

Covered Call Writing Requirement

Owning the underlying stock

American-Style Options Characteristic

Can be exercised early

Maximum Loss for Long Call (1 ABC call @ $5)

$500

Options Clearing Corporation (OCC) Assurance

Contract performance

Put Option In-The-Money

When the market price is below the strike

Strategy Profiting from Rising Asset Price

Long call

Theta Measures Option's Sensitivity To

Time decay

Protective Put Use

Hedge a long stock position

Roth IRA Contributions

Tax-free at withdrawal

IRS Penalty for IRA Withdrawals Before Age

59½

Retirement Plan with Employer Contributions

401(k)

1035 Exchange Allows Tax-Free Transfer Between

Annuities and life insurance

Required Minimum Distributions (RMDs) Begin at Age

73

Coverdell ESA's Annual Contribution Limit

$2,000

Account That Is Tax-Deferred

Traditional IRA

Rollover Completion Time (401k to IRA)

60 days

Municipal Bond Interest Taxable at Federal Level

Private activity

Wash Sale Rule Time Frame

30 days

FINRA's Primary Role

Regulate broker-dealers

Regulation Best Interest Prioritizes

Client’s best interest

SAR Filing Threshold

$5,000

SEC Creation Timing

Securities Exchange Act of 1934

Insider Trading Violation Act

Insider Trading Act of 1988

Broker Recommending Unsuitable Investment Violates

Regulation BI

Customer Complaint Retention Time

6 years

Registered Rep Outside Business Activity Requirement

Disclosed to the firm

"Do Not Call" Registry Exemptions

Existing clients, charities, political campaigns

SIPC Investor Protection Limits

$500,000 total, including $250,000 cash

Anti-Money Laundering Rules Enforcer

FinCEN

Client's Trusted Contact Person Can Be Added To

Prevent fraud

Recommending Variable Annuity to 85-Year-Old May Violate

Liquidity needs, risk tolerance, time horizon

Discretionary Account Requirement

Written client consent

MSRB Regulates

Municipal securities

Broker Using Customer Funds Commits

Embezzlement

Regulation T Margin Requirement

50%

Customer Account Statement Frequency

Quarterly

Rep's Form U5 Filing Time

30 days

Customer Privacy Notice Requirement

At account opening and Annually

Sharing Customer Account Profits Without Approval Violates

FINRA Rule 2150

Cold Calls Prohibited Before

8 AM local time

Recommending High-Risk Investment to Conservative Retiree Violates

Suitability

Registered Rep's Continuing Education Includes

Firm Element and Regulatory Element

Rep Selling Away Refers To

Selling unapproved securities