784 SIE FINRA Exam Questions and
Answers
The Federal regulatory body that governs the securities industry is: >>>The SEC
A fully disclosed BD: >>>is an inducing firm clearing its transactions through a carrying
firm
An intermediary between the buy and sell sides of a transa...
784 SIE FINRA Exam Questions and
Answers
The Federal regulatory body that governs the securities industry is: >>>The SEC
A fully disclosed BD: >>>is an inducing firm clearing its transactions through a carrying
firm
An intermediary between the buy and sell sides of a transaction is known as >>>a
clearing agent
For the Depository Trust and Clearing Corporation (DTCC), all of the following are true
EXCEPT:
a. it is a member of the Federal Reserve System
b. It acts as a retail bank servicing savings and checking accounts
c. it serves for the purpose of providing custody of securities
d. it is a worldwide clearing agent >>>b. it acts as a retail bank servicing savings and
checking accounts
Your BD acts as a prime broker for an institutional account. In this arrangement, your
BD is likely to be providing which of the following services? >>>clearing and transaction
settlement services for executing brokers
An individual or institution willing to hold securities positions in its own proprietary
account for the purpose of providing liquidity to the marketplace is >>>a market maker
An entity such as a corporation wishing to offer securities for sale to the public for the
purpose of raising capital is >>>an issuer
A nonprofit organization requiring members to pay assessments into a general
insurance fund used to meet customer claims in the event of a BD bankruptcy is >>>the
Securities Investors Protection Corporation (SIPC)
The FDIC provides insurance guaranteeing the safety of a depositor's accounts in FDIC
member banks for each deposit up to: >>>$250,000
Determining monetary policy and taking actions to implement those policies is the
responsibility of >>>the Federal Reserve Board (FRB)
The Magnolia Steel Corporation needs to build a refinery plant. It is estimated to cost
$750 million to complete. What market can be used to raise the money needed to build
the new plant? >>>Secondary Market
,When securities are sold to the investing public in what are known as issuer
transactions, the transactions are being done in: >>>the primary market
If an investment company bought stock directly from a bank, bypassing any
intermediary or broker, this trade took place in >>>the fourth market
Which of the following statements regarding the third market is TRUE?
a. it refers to trading of unlisted stocks directly between institutional investors
b. the services of a broker acting as an agent or intermediary are not used
c. It is composed of listed securities traded OTC
d. it is composed only of unlisted securities >>>c. It is composed of listed securities
traded OTC
An investor enters an order to purchase shares of XYZ stock. Another investor enters
an order to sell XYZ stock. These two orders meet on the floor of a US Stock Exchange
where they are executed. This transaction too place in: >>>the secondary market
Assuming all other factors to remain constant, an increase in imports would most likely
cause GDP to >>>decrease
Which state of the business cycle is characterized by rising interest rates and higher
wages? >>>Expansion
An economic environment with little or no economic growth, but where inflation is
present, is best described as >>>Stagflation
It is generally agreed that the two primary policies impacting the U.S. economy are
fiscal and monetary. Which of the following would be considered tools of fiscal policy?
I. Government Spending
II. Operations of the Federal Open Market Committee (FOMC)
III. Changing the reserve requirements
IV. Taxation >>>Government Spending and Taxation
Which of the following is added to M2 to arrive at M3? >>>$100,000 and larger time
deposits
Which of the following actions of the Federal Reserve Board (FRB) would likely have
the effect of causing interest rates to increase?
I. The FOMC buying securities
II. Raising the reserve requirements
III. Raising the discount rate
IV. Raising the prime rate >>>Raising the reserve requirements & Raising the discount
rate
,Economic data shows that the GDP has been declining steadily over the past two
quarters. This would suggest >>>a recession
All of the following would be considered a defensive industry security EXCEPT:
A. Tobacco stock
B. Food chain stock
C. Steel company stock
D. Utility company stock >>>steel company stock
Which of the following would be a leading economic indicator?
a. S&P 500 Index
b. Industrial production
c. Duration of unemployment
d. GDP >>>S&P 500 Index
When a government actively manipulates the economy through tax and spending
policies, this is referred to as >>>Keynesian Economics
A major distinction of secondary offering is >>>proceeds are not received by the issuer
of the securities
How many primary offerings can a corporation issue? >>>Unlimited
A corporation can only have one initial public offering (IPO), but there is no limit on the
number of subsequent public offerings (SPOs) or additional public offerings (APOs)
issued.
What federal law regulates the initial sale of securities to the public >>>The Securities
Act of 1933
A tombstone advertisement includes all of the following information EXCEPT
a. the offering price
b. the name of the issuer
c. the risks associated with the offering
d. the number of shares to be sold >>>the risks associated with the offering
Mark the following as true or false:
A __ The final prospectus may be delivered via the internet before a sale
B. __ A shelf registration is good for 5 years
, C. __ The access equals delivery rule is not applicable to the preliminary prospectus
D. __ Additional public offerings (APOs) of listed securities do not require delivery of a
prospectus
E. __ Once the SEC approves a registration, the cooling-off period ends and an
effective date is established >>>A: T
B: F
C: T
D: T
E: F
The Uniform Securities Act (USA) is the template from which state securities laws are
derived. Under the USA, a BD would have to register with the state under all of the
following conditions EXCEPT:
a. There was an office in the state
b. Calls were directed to prospects in the state
c. The BD made a market in municipal bonds issued by the state
D. Calls were received from clients in the state >>>c. The BD made a market in
municipal bonds issued by the state
An issuer wishing to raise additional capital engages the services of an under-writer
who proposes limiting the sale to the 6 New England states. In doing so, it is most likely
that the registration method to be used will be >>>Coordination
Under the Securities Act of 1933, a corporation may qualify for an exemption from the
registration statement and prospectus requirements under all of the following
exclusionary provisions EXCEPT:
a. Regulation A+
b. Regulation B
c. Rule 147
d. The Investment Advisers Act >>>d. The Investment Advisers Act
Miguel Reyes purchased $200,000 of ABC corporation common stock 5 years ago. At
one point, the value of his investment doubled. However, as a result of a recent class
action lawsuit, the company has been ordered to pay 50% more than the company's net
worth, and ABC filed for bankruptcy. What is the maximum loss that Reyes can lose on
his investment? >>>No more than his original investment of $200,000
Rights of common stockholders include all of the following EXCEPT:
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