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Securities Industry Essentials Exam (SIE)

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Total Questions : 410

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Question # 61

Which of the following activities is a responsibility of a mutual fund transfer agent?

Options:

A.  

Underwriting new shares of securities

B.  

Distributing the fund ' s prospectus to investors

C.  

Maintaining custody of the fund ' s securities

D.  

Maintaining records of shareholder purchases and redemptions

Discussion 0
Question # 62

The prohibited practice of excessively trading in a discretionary account in order to generate commissions is known as:

Options:

A.  

Kiting

B.  

Churning

C.  

Freeriding

D.  

Front running

Discussion 0
Question # 63

A registered representative pleads guilty to an investment fraud scheme that occurred five years ago. Which of the following documents must be updated within 30 days of the guilty plea?

Options:

A.  

Form U4

B.  

Form U5

C.  

An arbitration disclosure

D.  

Written supervisory procedures (WSPs)

Discussion 0
Question # 64

Which of the following discretionary decisions is a registered representative permitted to make on the day oral authorization is received?

Options:

A.  

Whether to buy or sell and the execution price

B.  

Whether to buy or sell and the number of shares

C.  

Selection of the security and timing of the order

D.  

Timing and execution price of the purchase or sale

Discussion 0
Question # 65

A customer has four traditional Individual retirement accounts (IRAs): two are at banks, one Is held directly at a mutual fund, and one Is held in her brokerage account. In order to meet her required minimum distribution (RMD), which of the following actions is she required to take?

Options:

A.  

Take a distribution from the largest account based on current value

B.  

Take a distribution from the smallest account based on current value

C.  

Take a distribution from one of the bank IRAs and either the mutual fund or brokerage IRA

D.  

Take a distribution based on the value of all of the accounts at the previous year end

Discussion 0
Question # 66

Which of the following types of investment companies raise money by issuing a fixed number of shares through an initial public offering (IPO), actively manage their portfolios and trade their shares on a stock exchange?

Options:

A.  

Open-end funds

B.  

Closed-end funds

C.  

Variable annuities

D.  

Unit investment trusts (UITs)

Discussion 0
Question # 67

Which of the following market participants serve as intermediaries between buyers and sellers to ensure that trades are settled correctly?

Options:

A.  

Exchanges

B.  

Investment advisers

C.  

Market makers

D.  

Clearing corporations

Discussion 0
Question # 68

Which of the following is the primary risk of using asset allocation models without periodic rebalancing?

Options:

A.  

Inflation

B.  

Marketability

C.  

Overweighting

D.  

Interest rate risk

Discussion 0
Question # 69

A customer and his two brothers want to Invest $30,000 to start an equity portfolio. Two of the brothers will Invest $7,500 each, and the other brother will invest S15,000 to start the account. In the event of death, each of them agrees that the assets should be passed on to their heirs proportionately. Which of the following types of accounts should the registered representative recommend to the customers?

Options:

A.  

Tenants by the entirety

B.  

Transfer-on-death (TOD)

C.  

Joint tenants in common

D.  

Joint tenants with right of survivorship (JTWROS)

Discussion 0
Question # 70

A registered representative is positive about the prospects of Company ABC, a publicly traded corporation. He wants to send an email to his customers about the company’s stock. Which of the following statements in that email is prohibited?

Options:

A.  

“The stock has paid a quarterly dividend for the past 20 years.”

B.  

“According to the attached research report, our firm has rated the stock a strong Buy.”

C.  

“ABC has recently changed management. The new chief executive officer has 12 years of experience in ABC’s industry.”

D.  

“There is strong demand for ABC stock, and it will hit $50 per share, a 20% increase, by May of this year.”

Discussion 0
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