Three Best Formats of FINRA SIE Practice Test Questions

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The customizable FINRA SIE practice tests create a scenario of a real-based FINRA which is helpful for students so they don’t feel much pressure when they are giving the final examination. The students can give unlimited SIE practice tests and make themselves better day by day to achieve their desired destination. The candidates can even access their previously given FINRA SIE Practice Test from the history which allows them to be careful while giving the test next time and prepare for FINRA SIE certification in a better way.

FINRA SIE Exam Syllabus Topics:

Topic	Details
Topic 1	Overview of the Regulatory Framework: This section of the exam measures the skills of Compliance Officers and evaluates knowledge of self-regulatory organization (SRO) requirements, including registration and continuing education for associated persons. Candidates must understand the distinction between registered and non-registered individuals and the requirements for maintaining industry qualifications.
Topic 2	Market Structure: This section of the exam measures the skills of Equity Market Specialists and covers the classification of financial markets, including the primary, secondary, third, and fourth markets. Candidates must demonstrate knowledge of electronic trading, over-the-counter (OTC) markets, and physical exchanges. One specific skill tested is differentiating between various market types and their operational mechanisms.
Topic 3	Understanding Trading, Customer Accounts, and Prohibited Activities: This section of the exam measures the skills of Securities Traders and focuses on different trading strategies, settlement processes, and corporate actions. Candidates must demonstrate knowledge of order types, including market, limit, stop, and good-til-canceled orders, as well as bid-ask spreads and discretionary versus non-discretionary trading.
Topic 4	Regulatory Entities, Agencies, and Market Participants: This section of the exam measures the skills of Financial Regulatory Analysts and covers the structure, authority, and jurisdiction of key regulatory bodies overseeing financial markets. The SEC's role in enforcing securities regulations is assessed, along with the authority of self-regulatory organizations such as FINRA and MSRB. Candidates must also understand the functions of other financial regulators, including the Department of the Treasury and state regulatory agencies. One key skill evaluated is identifying the jurisdictional scope of different financial regulators.

FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q124-Q129):

NEW QUESTION # 124
A retail investor owns shares of Mutual Fund ABC that paid a $0.25 dividend on September 1 and closed at
$10.00. What is the opening price once this fund trades on the ex-dividend date?

A. $9.25
B. $9.75
C. $10.25
D. $10.00

Answer: B

Explanation:
Step by Step Explanation:
* Ex-Dividend Date Pricing: On the ex-dividend date, the mutual fund's price is adjusted downward by the amount of the dividend.
* Closing Price: $10.00
* Dividend: $0.25
* Adjusted Opening Price: $10.00 - $0.25 = $9.75.
* Incorrect Options:
* A: $9.25 subtracts more than the dividend amount.
* C: $10.00 does not reflect the dividend adjustment.
* D: $10.25 adds to the price rather than subtracting the dividend.
References:
* SEC Guidance on Mutual Fund Pricing: SEC Mutual Funds.

NEW QUESTION # 125
Which of the following statements is true of an index exchange-traded fund (ETF)?

A. It has a high portfolio turnover ratio.
B. It offers an opportunity to outperform the index it tracks.
C. It is priced once daily, generally at the market close.
D. Passive ETFs will typically have lower fees than those associated with actively managed ETFs.

Answer: D

Explanation:
Passive ETFs track an index and require minimal management, leading to lower expenses compared to actively managed ETFs.
* D is correctbecause passive ETFs are cost-efficient and have lower fees.
* Ais incorrect because index ETFs have low turnover since they replicate an index.
* Bis incorrect because ETFs are priced continuously throughout the trading day.
* Cis incorrect as ETFs aim to match, not outperform, the index.

NEW QUESTION # 126
A registered representative (RR) intends to enter into an arrangement for compensation with an unaffiliated entity to participate in the sale of promissory notes to the general public. Which of the following statements is true?

A. The RR is required to notify his firm regarding this arrangement if compensation received is directly related to transactions.
B. The RR is not required to provide prior notice to his firm as promissory notes are not considered securities.
C. The RR must receive written approval from his firm prior to entering into this arrangement.
D. This is a permissible arrangement, and the RR is only required to notify his firm.

Answer: C

Explanation:
Step by Step Explanation:
* Private Securities Transactions: Under FINRA Rule 3280, RRs must obtain written approval from their employing firm before participating in the sale of securities outside the firm.
* Promissory Notes: These are typically considered securities, requiring prior approval.
* Incorrect Options:
* A & C: Notification alone is insufficient; written approval is required.
* D: Promissory notes are generally treated as securities under federal law.
References:
* FINRA Rule 3280 (Private Securities Transactions): FINRA Rule 3280.

NEW QUESTION # 127
The provision that allows a bond issuer to purchase bonds from customers prior to the maturity date on the bond is known as a:

A. Put
B. Call
C. Conversion
D. Defeasement

Answer: B

Explanation:
Step by Step Explanation:
* Call Provision: This allows the issuer to redeem bonds before their maturity date, usually at a premium to the par value, which benefits the issuer in a declining interest rate environment.
* Put Provision: Allows bondholders, not issuers, to sell the bond back to the issuer.
* Conversion: Relates to convertible bonds that can be converted into equity.
* Defeasement: Refers to the removal of a bond issuer's obligation by setting aside cash or securities to cover the debt.
References:
* SEC Guide on Callable Bonds: SEC Callable Bonds.

NEW QUESTION # 128
Which of the following products is the most appropriate class of investments for a customer looking for income and capital gains?

A. A growth stock
B. A blue-chip stock mutual fund
C. A money market account
D. Treasury Separate Trading of Registered Interest and Principal of Securities (STRIPS)

Answer: B

Explanation:
Step by Step Explanation:
* Blue-Chip Stock Mutual Funds: Invest in large, established companies that typically provide stable dividend income and potential for capital appreciation.
* Incorrect Options:
* A: Growth stocks prioritize capital appreciation, not income.
* B: Money market accounts focus on safety and liquidity, not capital gains.
* D: STRIPS provide fixed income without capital gains potential.
References:
* FINRA Investment Product Education: FINRA Investment Guidance.

NEW QUESTION # 129
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THREE BEST FORMATS OF FINRA SIE PRACTICE TEST QUESTIONS

Three Best Formats of FINRA SIE Practice Test Questions