Coventry House Publishing - SIE Exam Practice Question Workbook: Seven Full-Length Practice Exams (2022 Edition)

Copyright 2022 Coventry House Publishing All rights reserved. The author and publisher have provided this e-book to you without Digital Rights Management software (DRM) applied so that you can enjoy reading it on your personal devices. This e-book is for personal use only and may not be printed, posted, or reproduced. Practice Exam 1 Questions 1. Which of the following corporate voting procedures entitles a shareholder to one vote per share, and votes must be divided evenly among the candidates being voted on? A. Accumulated voting B.

Cumulative voting C. Non-regulatory voting D. Statutory voting 2. Which of the following refers to the trading of exchange-listed securities in the over-the-counter market? These trades allow institutional investors to trade blocks of securities directly, rather than through an exchange, providing liquidity and anonymity to buyers. A. First market B.

Second market C. Third market D. Fourth market 3. An investor sells a naked call on Omikron for a $250 premium. Which of the following is true regarding the investors position? A. B. B.

The investors potential loss is unlimited. C. The investors potential loss is limited to $250. D. The investors outlook for Omikron stock is bullish. 4.

Which of the following acts created the SEC and empowered it with broad authority over all aspects of the securities industry? A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. Investment Advisers Act of 1940 D. Investment Company Act of 1940 5. Which of the following is a free tool provided by FINRA that is intended to help consumers research the professional backgrounds of brokers and brokerage firms, as well as investment adviser firms and advisers? A.

BrokerCheck B. FirmCheck C. InvestorCheck D. None of the above are correct. 6. The Federal Reserve Board performs which of the following actions? A.

It sets monetary policy, but does not set tax policy. B. It sets tax policy, but does not set monetary policy. C. It sets monetary policy and tax policy. D.

None of the above are correct. 7. Which of the following is an offering of shares to existing stockholders on a pro-rata basis? A. Private placement B. Public offering C. Rights offering D.

Tender offering 8. The difference between a bonds price and the conversion parity price is referred to as which of the following? A. Bond premium B. Conversion premium C. Discount price D. Option premium 9.

An individual who meets which of the following criteria must register as an investment adviser? (1) The individual provides advice or analyses concerning securities. (2) The individual is in the business of providing investment advice. (3) The individual provides investment advice for compensation. (4) The individual is a CPA or attorney whose investment advice is only incidental to his or her other activities. A. (1), (2), and (3) only C. (1), (2), and (4) only D. (2), (3), and (4) only 10. (2), (3), and (4) only 10.

Which of the following is a type of preferred stock that gives the investor the right to receive dividends equal to the normally specified rate, as well as an additional dividend based on a specific predetermined condition? A. Accumulating preferred stock B. Dividend preferred stock C. Non-participating preferred stock D. Participating preferred stock 11. Profit sharing plans have which of the following characteristics? A.

They favor older employees. B. They can be invested entirely in company stock. C. They are a type of defined contribution pension plan. D.

The minimum funding standard requires the employer to make an annual contribution. 12. All but which of the following are correct regarding the Central Registration Depository (CRD)? A. It was developed by NASAA and the NASD. B. C. C.

Its computerized database contains the licensing and disciplinary histories on more than 650,000 securities professionals and 5,200 securities firms. D. All of the above are correct. 13. Which of the following are responsible for maintaining fair and orderly markets for an assigned set of listed firms? They operate both manually and electronically to facilitate price discovery during market opens, closes, and during periods of trading imbalances and instability. A.

Certified Exchange Specialists B. Designated Market Makers C. Registered Floor Brokers D. Supplemental Liquidity Providers 14. If real GDP declined the last 3 quarters, how many more consecutive quarters of decline would be needed to be classified as an economic depression? A. 2 quarters C. 3 quarters D. 4 quarters 15. 4 quarters 15.

Which of the following is the correct reason to purchase a particular investment for a clients portfolio? A. Growth stocks because they pay high dividends. B. FNMA securities because they are backed by the full faith and credit of the U.S. government. C.

Global fund because it provides only international exposure. D. Blue chip common stocks because they provide a hedge against inflation. 16. Which of the following is an unconditional promise to pay a sum of money to a payee, either at a fixed or determinable future time, under specific terms? A. IOU C. IOU C.

Promissory note D. None of the above are correct. 17. A trade surplus results from which of the following? A. A country having a current account deficit. B.

A country exporting more than it imports. C. A country exporting less than it imports. D. None of the above are correct. 18.

William, age 56, recently retired from Epsilon Inc., and would like to take a distribution from a retirement plan to pay for medical expenses. Which of the following plans would allow William to take a penalty free withdrawal? A. Single premium deferred annuity B. Traditional IRA C. Money purchase plan from his employer before Epsilon Inc. 401(k) from Epsilon Inc. 401(k) from Epsilon Inc.

For questions 19 22, match the stage of the business cycle with the description that follows. Use only one answer per blank. Answers may be used more than once or not at all. A. Trough B. Expansion C.

Contraction D. Peak 19. ____ Recession 20. ____ Utilization at its lowest level 21. ____ Recovery 22. ____ GDP at its highest point 23.

All but which of the following are characteristics of a REIT? A. It is a publicly traded open-end investment company. B. A mortgage REIT is a specific type of REIT. C. D. D.

All of the above are correct. 24. Which of the following can an investor sign which allows him or her to receive breakpoint discounts based upon a commitment to buy a specified number of mutual fund shares over a period of time, usually 13 months? A. Investment advisory contract B. Investment memorandum C. Letter of intent D.

Prospectus 25. Which of the following is a type of exchange rate system in which a country ties its currency to a basket of other currencies or to another measure of value, such as gold? A. Adjustable exchange rate system B. Commodity exchange rate system C. Fixed exchange rate system D. Variable exchange rate system 26.

Which of the following will result if money distributed from a 529 plan is not used to pay for qualifying education expenses? A. The gain is taxed at capital gains rates, and a 10% penalty is applied. B. The gain is taxed at capital gains rates, and a 20% penalty is applied. C. D. D.

The gain is taxed as ordinary income, and a 20% penalty is applied. 27. An investor who believes that an economic recession is imminent should purchase which of the following type of stocks? A. Defensive stocks because they tend to underperform during economic downturns. B. C. C.

Cyclical stocks because they tend to outperform during economic downturns. D. Cyclical stocks because they tend to underperform during economic downturns. 28. Which of the following is/are correct regarding dividends paid by growth stocks and value stocks? (1) Because they are growing and expanding, growth stocks typically do not pay large dividends. A. (1) only B. (2) only C. (2) only C.