FINRA SIE Practice Test 75 Questions with Complete Solutions Rated A+ Upon Expiration, all in-the-money S&P 100 Index call options are settled by the delivery of which of the following? - Correct Answer Cash Which of the following statements is true about treasury stock? - Correct Answer It is issued stock that has been subsequently reacquired by the corporation In the event of a stock split, which of the following parties is required to maintain a record of the shareholders eligible to receive the additional shares? - Correct Answer Transfer Agent Which of the following actions is required of a broker-dealer's anti-money laundering (AML) program? - Correct Answer Designating an AML compliance officer A registered representative (RR) wants to participate in a private securities transaction.Which of the following actions must the RR take? - Correct Answer Send written notice to his supervisor outlining the activity and compensation structure A customer BUYS a 1 ABC Jan 35 PUT for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling at what price per share at expiration? - Correct Answer $38 The call provision of a bond stipulates which of the following factors? - Correct Answer Call date and call price When is interest on Treasury notes paid? - Correct Answer Semiannually The owner of which of the following products is MOST exposed to inflationary risk? - Correct Answer Treasury bonds (because it's long-term) A registered representative (RR) who wants to place a mutual fund advertisement must obtain written approval from which of the following parties? - Correct Answer A registered principal of the RR's firm A company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. An investor wants to participate in this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many, if any, of the investor's shares will the company purchase? - Correct Answer 1,000 (1,000 x 100 = 100,000 shares; 1 million - 900k = 100k) Broker-dealer ABC seeks to underwrite a municipal securities offering by a local town in which the mayor is currently seeking re-election. A municipal finance professional who 1 / 2
resides in the town and works for ABC contributed $200 to the mayor's re-election campaign 13 months ago. If the employee wants to support the campaign further without impacting the municipal securities business of the firm, he is permitted to make an additional contribution of up to what amount? - Correct Answer $50 ($250 is the limit PER election) Which of the following stakeholders has first claim priority in a Chapter 11 proceeding? - Correct Answer Secured debt holders
[Order of liquidation at bankruptcy:
- Unpaid wages
- Taxes (IRS)
- Secured claims (mortgages)
- Secured liabilities (bonds)
- Unsecured liabilities (debentures) and general creditors
- Subordinated debt
- Preferred Stockholders
- Common stockholders]
An investors owns 100 shares of XYZ common stock at the current market price of $50 per share. If XYZ conducts a 1-for-2 REVERSE stock split, the investor's post-split stock
position will be: - Correct Answer 50 shares at $100 per share
The primary purpose of a syndicate desk in the context of an equity offering is to: - Correct Answer build an order book and allocate the stock Which of the following investments are generally traded according to their average life rather than their stated maturity dates? - Correct Answer Asset-backed securities UTMA (Minor) accounts are opened under the tax ID of the: - Correct Answer minor Stability in the value of debt portfolio is greatest when: - Correct Answer maturities of the debt securities are short Which of the following statements is true about all U.S. government agency issues? - Correct Answer They are exempt from registration under the Securities Act of 1933 Which of the following products is adversely impacted if the issuer's credit rating is downgraded? - Correct Answer Exchange-traded notes (ETNs) Company ABC announces a 20% stock dividend for its common shareholders. If a customer holds 1,000 shares at $50.00, what is the new price and number of shares following the payment of the stock dividend? - Correct Answer 1,200 shares at $41.67 (20% increase in number of stock BUT market cap remains the same)
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