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Securities Industry Essentials Exam (SIE)

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Total Questions : 410

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Question # 51

Interest rate risk is best minimized by purchasing municipal:

Options:

A.  

Revenue bonds

B.  

Bonds at a discount

C.  

Issues with short maturities

D.  

Issues with the highest yield available

Discussion 0
Question # 52

Class A and Class C shares of a mutual fund differ in which of the following ways?

Options:

A.  

The expense ratio

B.  

The net asset value (NAV)

C.  

The underlying investments

D.  

When the customer is permitted to purchase

Discussion 0
Question # 53

Which of the following statements is true of the writer of a listed equity call option?

Options:

A.  

Potential gains are limited, and potential losses are limited.

B.  

Potential gains are limited, and potential losses are unlimited.

C.  

Potential gains are unlimited, and potential losses are limited.

D.  

Potential gains are unlimited, and potential losses are unlimited.

Discussion 0
Question # 54

A company files a registration statement with the SEC to register a new Issue of securities. The company does not plan to sell all the registered shares at this time and instead plans to gradually sell new shares over a three-year period. This registration is called a:

Options:

A.  

shelf registration.

B.  

Rule 144 offering.

C.  

best efforts offering.

D.  

SEC Regulation S offering.

Discussion 0
Question # 55

An investor wants to purchase additional mutual fund shares with income distributed by the fund. Which of the following fund options permits this?

Options:

A.  

Asset reallocation

B.  

Dollar cost averaging

C.  

Dividend reinvestment

D.  

Capital gains reinvestment

Discussion 0
Question # 56

Which of the following securities issued by a corporation allows the owner to vote on matters of the corporation?

Options:

A.  

Warrant

B.  

Common stock

C.  

Preferred stock

D.  

Corporate bond

Discussion 0
Question # 57

The Investment Company Act of 1940 requires that a minimum percentage of a fund ' s board members are “uninterested persons.” This requirement is best described as an attempt to:

Options:

A.  

include a diverse set of professional experiences on the board.

B.  

expand the board ' s expertise beyond knowledge of investments.

C.  

ensure that regulations are followed consistently across fund companies.

D.  

ensure that board members have no material business relationship with the fund ' s advisers.

Discussion 0
Question # 58

A customer buys 100 ABC at $50 and at the same time sells an ABC April 50 call at $8. At expiration, ABC must be at what market price for the customer to break even?

Options:

A.  

$42

B.  

$44

C.  

$50

D.  

$58

Discussion 0
Question # 59

Which of the following documents must a firm provide to a customer upon the purchase of a mutual fund?

Options:

A.  

The fund’s prospectus

B.  

The firm’s annual report

C.  

A third-party research report

D.  

The statement of additional information

Discussion 0
Question # 60

A customer purchased $80,000 of Fund XYZ two years ago. He now wants to buy $50,000 of Fund LMN offered within the same fund family, which offers a $100,000 breakpoint under right of accumulation. Which of the following statements is true?

Options:

A.  

The additional investment qualifies for a $100,000 breakpoint.

B.  

Each fund requires contributions of $100,000 to qualify for a breakpoint.

C.  

The customer must sign a new letter of intent to receive the $100,000 breakpoint on the additional purchase.

D.  

The customer will receive a sales charge discount on his next purchase after the account balance of the fund reaches $100,000.

Discussion 0
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