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STC - SIE Final Exam 07 with 100- correct answers(graded A+).
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STC - SIE Final Exam 07 with 100- correct answers(graded A+).
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STC - SIE: Final Exam 07 with100% correct answers(graded A+)
If a registered representative terminates employment with a
member firm, the jurisdiction of FINRA:
A) Terminates upon the representative's resignation
B) Remains effective for five days following termination
C) Remains effective for 30 days following termination
D) Remains effective for two years following termination - answer
D) Remains effective for two years following termination
(FINRA retains jurisdiction over a registered representative for a
period of two years following resignation.)
A specialized or specialty fund invests in stocks that are primarily:
A) In many industries
B) In a particular industry or geographical area
C) Traded in the OTC market
D) Special situations - answer B) In a particular industry or
geographical area
(A specialized or specialty fund is a type of a fund that invests
primarily in a particular industry or geographical area.)
If a registered representative terminates employment with a
member firm, the jurisdiction of FINRA:
,A) Terminates upon the representative's resignation
B) Remains effective for five days following termination
C) Remains effective for 30 days following termination
D) Remains effective for two years following termina - answer D)
Remains effective for two years following termination
(FINRA retains jurisdiction over a registered representative for a
period of two years following resignation.)
The fund that would probably have the most price volatility is a(n):
A) International equity fund
B) Growth fund
C) Income fund
D) Municipal bond fund - answer A) International Equity Fund
(In general, bond funds are less volatile than equity funds. Within
the equity category, the NAVs of growth and income bond funds are
considerably less volatile than international equity funds whether
corporate or municipal. International equity funds are not only
vulnerable to market risk, but exchange and political risk as well.)
In order to convince a customer to purchase mutual fund shares, a
registered representative pledges to reimburse the client for a
predetermined amount if the shares perform poorly. This activity is:
A) Acceptable.
B) Acceptable if it's in writing.
C) Acceptable if it's in writing and approved by a principal.
D) Prohibited. - answer D) Prohibited.
,(The RR's pledge to reimburse the client for losses represents a
guarantee against a loss. This type of activity is a prohibited
practice.)
When documenting an investor's profile, which of the following is
important?
A) Marital status
B) Employment history
C) Liquidity needs
D) Education - answer C) Liquidity needs
(Liquidity needs is one of the factors that make up an investor's
profile. By itself, marital status is not relevant when making
recommendations. An investor's current employment is more
important than his employment history. Education is not nearly as
important as a client's investing experience.)
A broker-dealer has received no written complaints from its
customers. Which of the following statements is TRUE?
A) The firm is required to maintain an empty complaint file.
B) The firm is not required to maintain an empty complaint file.
C) The firm should question its registered representatives to
determine if there have been verbal complaints.
D) Notification of FINRA is required since the firm has received no
complaints. - answer A) The firm is required to maintain an empty
complaint file.
(Even if a member firm has received no written complaints, the firm
must still maintain an empty file. FINRA need not receive a report
that no complaints were received by the firm.)
, Fee-based accounts are generally suitable for:
A) An account that uses a buy-and-hold strategy
B) An account that's rebalanced frequently
C) An account that uses an indexing strategy
D) A qualified retirement account - answer B. An account that's
rebalanced frequently
(Fee-based accounts charge clients an annual fee that's based on a
percentage of assets under management (AUM). These accounts are
suitable for clients that trade frequently since the annual fee
typically includes an unlimited amount of trading. Commission-
based accounts that charge per transaction are more suitable for
clients who don't trade frequently (e.g., buy-and-hold investors).)
All of the following must be included in a preliminary prospectus
according to the Securities Act of 1933, EXCEPT:
A) A written statement on the left border of the preliminary
prospectus (red herring) that states that the prospectus may be
subject to changes
B) The purpose for which the funds are being raised
C) The final offering price
D) The financial status and history of the company - answer C) The
final offering price
(A preliminary prospectus (red herring) is issued to obtain
indications of interest on a prospective new issue of securities. This
document will have a written statement on it that states that the
prospectus may be subject to change. This statement will be on the
left border of the cover page. The red herring will state the purpose
for which the funds are being raised as well as the financial history
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