SIE Comprehensive Final Exam (2024/2025) || With Questions & All Correct Solutions (Rated A+)
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Securities Industry Essentials
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Securities Industry Essentials
SIE Comprehensive Final Exam (2024/2025) || With Questions & All Correct Solutions (Rated A+)
SIE Comprehensive Final Exam (2024/2025) || With Questions & All Correct Solutions (Rated A+)
What is a tender offer? - ANSWER - When a company offers to buy outstanding securities for cash or for cash...
, SIE Comprehensive Final Exam
(2024/2025) || With Questions & All
Correct Solutions (Rated A+)
What is a tender offer? - ANSWER - When a company offers to buy outstanding
securities for cash or for cash plus other securities from its stockholders or
bondholders
What is a buy-back? - ANSWER - Sometimes referred to as a repurchase, is when a
company buys its own outstanding securities in the open market rather than
appealing directly to its investors.
What information is contained on the trade confirmation sent to the investor at or on
the settlement date? - ANSWER - The commission charged on the agency
transaction and the CUSIP number
What would require a loan consent form? - ANSWER - A customer has given
permission for securities in an investment account to be used for the purpose of
other customers who want to borrow them in order to sell those securities short
What is a municipal financial professional (MFP)? - ANSWER - an employee of a
FINRA member engaged in municipal security representative activities such as
underwriting and trading
What dose the NAC (National Adjudicatory Council) do? - ANSWER - establishes
the rules, regulations, and membership eligibility standards for registration with the
SEC.
Prospectus vs. official document - ANSWER - Prospectus : the full disclosure
document for nonexempt securities
Official document: the full disclosure document for exempt securities
What are considered investment companies under the Investment Act of 1940? -
ANSWER - Face amount certificates, unit investment trusts, and management
companies (both open and closed)
What can you do in hedge funds that you can't in mutual funds? - ANSWER - Use
borrowed money to purchase securities (purchasing on margin) and take short
positions in NYSE listed stocks (selling short)
What does it mean when an option is at "parity" - ANSWER - When the premium
equals intrinsic value (i.e.-"XYZ stock is traded on the NYSE. An investor notices that
the XYZ October 45 puts are selling for 2½ when the XYZ stock is quoted at $42.50.)
Investors who are bullish on a stock should buy.... - ANSWER - Calls (look at chart)
Investors who are bearish on a stock should buy.... - ANSWER - Puts (look at chart)
, Out of the following, which are not backed by the full faith of the government? :
Treasury bonds, bill, STRIPS, or receipts? - ANSWER - Treasury receipts because
they are issued by the broker-dealer, therefore their backing is only as good as the
credit rating of the broker-dealer that issued them
What type of risk is unique to a specific industry, business enterprise, or investment
type? - ANSWER - Nonsystematic risk
Under which of the following circumstances is an investor in a position to acquire
stock? - ANSWER - Buy a call, sell a call (The holder of a call has the right to buy
stock at the strike price if exercised. The seller of a put is obligated to buy stock at
the strike price if exercised)
Options- a premium - ANSWER - the cost of an option contract, expressed in dollars
per share of the underlying stock
Options- strike price - ANSWER - The price at which the stock will be bought or sold
if the contract is exercised, expressed in dollars per share
A customer believes that ABC's price will go up but does not have the money to buy
100 shares right now. How could the customer use options to profit from an increase
in the stock's price? - ANSWER - buy calls, write puts (both are bullish)
A corporation's offer to current stockholders of the ability to purchase a proportionate
number of new shares at a specific price for a limited time is called a - ANSWER -
right (they usually expire in 30-45 days)
American depositary receipts (ADRs) - ANSWER - issued by banks, represent a
specific number of shares of a foreign company, and trade and pay dividends in
dollars
Which of the following records must be maintained for 6 years? - ANSWER -
Customer ledgers (statements)
While underwriters can assist with preparation and filing, the accuracy and adequacy
of these documents is the responsibility of the - ANSWER - Issuing corporation
What institutions serve as depository and clearing facilities? - ANSWER - Depository
Trust Company and National Securities Clearing Corporation (most specifically) then
carrying and clearing firms can act as these as well.
What is a transfer agent? - ANSWER - (often a bank) for a corporation is responsible
for ensuring that its securities are issued in the correct owner's name, canceling old
and issuing new certificates, maintaining records of ownership, and handling
problems relating to lost, stolen, or destroyed certificates
What is the function of the clearing corporation? - ANSWER - Acting as an
intermediary in a trade, examples of these can be a commercial bank, can be a
broker-dealer but doesn't have to be
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