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SIE Final Exam 124 Questions with Verified Answers,100% CORRECT
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SIE Final Exam 124 Questions with Verified Answers
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SIE Final Exam 124 Questions with Verified AnswersThe cost basis for inherited securities is: - CORRECT ANSWER The value of the
securities on the date the original owner dies
Liquidity risk - CORRECT ANSWER the risk that the investor will not be able to sell
an investment quickly and at a fair price
Reinvestment risk - CORRECT ANSWER is the risk of getting your investment back
early and being unable to find an equally attractive new investment to put that
money into
Inflation Risk (Purchasing Power Risk) - CORRECT ANSWER The risk that the return
on an investment will not keep up with the rise in the cost of goods and services
Interest rate risk - CORRECT ANSWER the risk that a bond or other fixed-income
investment will decline in price because rising interest rates make new issues of
those investment more attractive than the ones on the secondary market
Investor's cost basis (tax basis) - CORRECT ANSWER Shares x Price per share x
Commission %
Hypothecation Agreement - CORRECT ANSWER allows the broker-dealer to use
the customer's securities as collateral on a loan
Credit agreement - CORRECT ANSWER details the terms and conditions for the
credit that the broker-dealer is extending to the customer. This agreement will
include how the firm will calculate the interest charged on the credit and what
interest rate the loan rate it will be tied to
Loan consent agreement - CORRECT ANSWER permits the broker-dealer to lend
the customer's securities to other customers wishing to execute short sales
, Which of the following private placement offerings has no dollar cap and allows
for public advertising? - CORRECT ANSWER A Regulation D, Rule 506(c) offering
Consider the following bond notation: "IBM 5 3/4 debentures of '10 callable @
102 in '08." All are true of the following bond notation EXCEPT: - CORRECT
ANSWER The bond is callable in 2010
MSRB Rule G-20 places limits on gifts, gratuities, and non-cash compensation
received in connection with the sale and distribution of municipal securities. In a
primary offering, dealers cannot accept non-cash compensation except for: -
CORRECT ANSWER · Gifts that do not exceed $100 per person per year and are
not preconditioned on achievement of a sales target
· Occasional gifts of meals or tickets to theatrical or sporting events that are not
too frequent or expensive
· Payment in connection with attending meetings for the purpose of training or
education, if the attendee has the prior approval of his employer and attendance
is not preconditioned on achievement of a sales target, if the location is
appropriate to the purpose of the meeting, and if the payment is not applied also
to guests of the attendee
The compensation paid to a selling group member for selling shares of a new
issuer is called the: - CORRECT ANSWER Concession
Cyclical stocks - CORRECT ANSWER Stocks whose success is closely linked to the
rise and fall of the general economy
Non-cyclical stocks (defensive stocks) - CORRECT ANSWER stocks whose value are
less severely affected by the changes of the overall economy ( ex utilities,
consumer staples)
The following must be filed with FINRA within ten business days of first use: -
CORRECT ANSWER Retail communications related to investment companies
Retail communications related to DPPs
Retail communications concerning collateralized mortgage obligations
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