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Securities Industry Essentials (SIE) Exam practice questions

200 free questions with answers and explanations.

Practice test
  1. 151.A client places an order to sell 500 shares of ABC stock at $75.00 stop, limit $74.50. After the order is placed, the stock trades at $75.10, then $75.00, then $74.90, then $74.40. At what price, if any, will the order be executed?Understanding Trading, Customer Accounts, and Prohibited Activities
  2. 152.Which of the following is NOT a required disclosure when opening a new brokerage account for a customer?Understanding Trading, Customer Accounts, and Prohibited Activities
  3. 153.Which of the following describes a 'delivery versus payment' (DVP) account?Understanding Trading, Customer Accounts, and Prohibited Activities
  4. 154.A registered representative learns that their firm's research department is about to release a 'buy' recommendation on XYZ stock, which is currently trading at $20. The representative immediately buys 1,000 shares of XYZ stock for their personal account before the recommendation is published. This action is considered:Understanding Trading, Customer Accounts, and Prohibited Activities
  5. 155.A registered representative receives an order from a client to sell 300 shares of XYZ stock 'at the market' immediately. This type of order guarantees:Understanding Trading, Customer Accounts, and Prohibited Activities
  6. 156.A client places an order to buy 100 shares of XYZ stock at a limit price of $50.00. The current market price is $50.50. Which of the following statements is true regarding this order?Understanding Trading, Customer Accounts, and Prohibited Activities
  7. 157.A client opens a new brokerage account and wants to ensure that all their mail, including statements and trade confirmations, is sent to a post office box (P.O. Box) rather than their residential address. Under FINRA rules, what is the firm's obligation regarding this request?Understanding Trading, Customer Accounts, and Prohibited Activities
  8. 158.A customer who holds 100 shares of XYZ stock at $80 per share receives a notice that the company has declared a 1-for-4 reverse stock split. After the split, how many shares will the customer own, and what will be the new cost basis per share?Understanding Trading, Customer Accounts, and Prohibited Activities
  9. 159.An investor holds a bond with a 6% coupon rate, currently trading at 105 ($1,050). The bond has a par value of $1,000. What is the bond's current yield?Understanding Trading, Customer Accounts, and Prohibited Activities
  10. 160.A customer wants to open a new brokerage account but refuses to provide their Social Security number. Under FINRA rules, what action must the registered representative take?Understanding Trading, Customer Accounts, and Prohibited Activities
  11. 161.A client instructs their registered representative to purchase 500 shares of a highly speculative penny stock, despite the representative's advice that it does not align with the client's conservative investment objectives. The client insists on placing the order. What should the representative do?Understanding Trading, Customer Accounts, and Prohibited Activities
  12. 162.A customer is interested in purchasing shares of a stock but wants to ensure they do not pay more than a specific price. Which type of order should the customer place?Understanding Trading, Customer Accounts, and Prohibited Activities
  13. 163.A registered representative receives a verbal complaint from a client regarding a recent transaction. The client expresses dissatisfaction but does not allege any wrongdoing or request monetary damages. According to FINRA rules, how should the representative handle this situation?Understanding Trading, Customer Accounts, and Prohibited Activities
  14. 164.A client has a margin account with a current market value of $60,000. Their debit balance is $25,000. If the Regulation T (Reg T) margin requirement is 50%, what is the client's equity in the account?Understanding Trading, Customer Accounts, and Prohibited Activities
  15. 165.A client places an order to sell 200 shares of XYZ stock at $45.00 stop, GTC. The current market price is $46.50. After the order is placed, the stock price begins to fall. At what point does this order become a market order?Understanding Trading, Customer Accounts, and Prohibited Activities
  16. 166.A registered representative receives a complaint from a client alleging unauthorized trading in their account. What is the representative's immediate obligation?Understanding Trading, Customer Accounts, and Prohibited Activities
  17. 167.A customer holds 100 shares of ABC stock at $60 per share. The company declares a 2-for-1 stock split. Immediately after the split, what will be the customer's position?Understanding Trading, Customer Accounts, and Prohibited Activities
  18. 168.A registered representative learns that their firm's research department is about to release a highly positive report on XYZ Corp., which is expected to significantly increase its stock price. The RR immediately purchases a substantial number of XYZ shares for their personal account before the report is made public. This action is best described as:Understanding Trading, Customer Accounts, and Prohibited Activities
  19. 169.Which of the following activities is NOT considered a prohibited practice for a registered representative?Understanding Trading, Customer Accounts, and Prohibited Activities
  20. 170.A client instructs their registered representative to sell 300 shares of ABC stock at the best available price immediately. What type of order is this?Understanding Trading, Customer Accounts, and Prohibited Activities
  21. 171.A client instructs their registered representative to purchase '500 shares of XYZ stock at the best available price immediately.' Which type of order has the client placed?Understanding Trading, Customer Accounts, and Prohibited Activities
  22. 172.A registered representative (RR) is informed by a client that they have moved to a new state. According to FINRA rules, what is the most appropriate action for the RR to take regarding the client's account?Understanding Trading, Customer Accounts, and Prohibited Activities
  23. 173.A client has a margin account with a market value of $40,000 and a debit balance of $15,000. If the Regulation T initial margin requirement is 50%, what is the client's current excess equity?Understanding Trading, Customer Accounts, and Prohibited Activities
  24. 174.A registered representative learns that their firm's research department is about to release a 'strong buy' recommendation for XYZ stock. Before the official release, the RR purchases shares of XYZ stock for their personal account. This action is considered:Understanding Trading, Customer Accounts, and Prohibited Activities
  25. 175.A firm receives a check from a new customer to open a cash account. The check is for $500, but the customer's new account form has not yet been approved by a principal. According to FINRA rules, what action should the firm take with the check?Understanding Trading, Customer Accounts, and Prohibited Activities
  26. 176.Which of the following would be considered a 'third-party' account, requiring specific authorization for trading?Understanding Trading, Customer Accounts, and Prohibited Activities
  27. 177.A client opens a new cash account with a brokerage firm. Which of the following is NOT a characteristic of a cash account?Understanding Trading, Customer Accounts, and Prohibited Activities
  28. 178.A customer holds 200 shares of XYZ stock. The company declares a reverse stock split of 1-for-4. Immediately after the split, what will be the customer's new share count and the most likely effect on the price per share?Understanding Trading, Customer Accounts, and Prohibited Activities
  29. 179.A registered representative receives an order from a client to purchase 1,000 shares of XYZ stock. The client states, 'Buy me 1,000 shares of XYZ whenever you think the time is right today.' Which type of authority is the client granting?Understanding Trading, Customer Accounts, and Prohibited Activities
  30. 180.Which of the following scenarios would be considered a prohibited practice known as 'churning'?Understanding Trading, Customer Accounts, and Prohibited Activities
  31. 181.An investor owns a bond with a 5% coupon rate, currently trading at 95. The bond has a par value of $1,000. What is the bond's current yield?Understanding Trading, Customer Accounts, and Prohibited Activities
  32. 182.Which of the following is NOT a characteristic of a cash account?Understanding Trading, Customer Accounts, and Prohibited Activities
  33. 183.A client wants to ensure that their account statements and trade confirmations are sent to a location other than their primary residence for a temporary period while they are traveling. What is the FINRA rule regarding holding customer mail?Understanding Trading, Customer Accounts, and Prohibited Activities
  34. 184.A client holds shares of a company that is being acquired by another company. The acquiring company offers to purchase the target company's shares directly from the shareholders at a premium to the current market price. This corporate action is known as a(n):Understanding Trading, Customer Accounts, and Prohibited Activities
  35. 185.A client has a margin account with a market value of $30,000 and a debit balance of $12,000. If the Regulation T (Reg T) requirement is 50%, what is the client's current excess equity?Understanding Trading, Customer Accounts, and Prohibited Activities
  36. 186.Which of the following is typically NOT considered a discretionary order?Understanding Trading, Customer Accounts, and Prohibited Activities
  37. 187.A client places an order to sell 300 shares of XYZ stock at $55.00 stop, GTC. The current market price is $56.00. Which of the following statements is TRUE regarding this order?Understanding Trading, Customer Accounts, and Prohibited Activities
  38. 188.A broker-dealer's research department is about to release a highly favorable report on XYZ company. A registered representative (RR) learns of this report before its public release and immediately purchases a significant amount of XYZ stock for their personal account. This action is considered:Understanding Trading, Customer Accounts, and Prohibited Activities
  39. 189.An investor owns a bond with a par value of $1,000, a coupon rate of 6%, and is currently trading at 105. What is the current yield of this bond?Understanding Trading, Customer Accounts, and Prohibited Activities
  40. 190.A registered representative (RR) receives an order from a client to purchase 500 shares of XYZ stock, but the client does not specify a price. The RR executes the trade immediately at the current market price. This type of order is known as a:Understanding Trading, Customer Accounts, and Prohibited Activities
  41. 191.A client has a margin account with a current market value of $70,000. The debit balance in the account is $30,000. If the maintenance requirement is 25%, what is the excess equity in the account?Understanding Trading, Customer Accounts, and Prohibited Activities
  42. 192.A client owns 200 shares of ABC stock at $45 per share. The company announces a 1-for-4 reverse stock split. After the split, what will be the client's new share count and cost basis per share?Understanding Trading, Customer Accounts, and Prohibited Activities
  43. 193.A client wants to transfer their account from XYZ Brokerage to ABC Securities. Which of the following forms is primarily used to facilitate this transfer?Understanding Trading, Customer Accounts, and Prohibited Activities
  44. 194.A client has a margin account with a market value of $80,000 and a debit balance of $35,000. If the Federal Reserve's Regulation T is 50%, what is the client's buying power in this account?Understanding Trading, Customer Accounts, and Prohibited Activities
  45. 195.A client is interested in an investment that offers a fixed income stream, a stated maturity date, and a priority claim on assets over common stockholders in the event of liquidation. However, they are also concerned about interest rate risk impacting the value of their investment in the secondary market. Which of the following securities best fits this description?Understanding Products and Their Risks
  46. 196.A client, age 35, is looking for an investment that offers professional management, diversification, and the potential for long-term growth. They are comfortable with moderate risk and want to be able to easily buy and sell their investment throughout the trading day at market prices. Which of the following investment products would best suit this client's needs?Understanding Products and Their Risks
  47. 197.A broker-dealer firm's compliance officer receives an anonymous tip alleging that a registered representative (RR) has been engaging in excessive trading in customer accounts to generate higher commissions. This practice is commonly known as:Overview of Regulatory Framework
  48. 198.A broker-dealer firm is developing its internal policies and procedures manual. According to the Securities Exchange Act of 1934, which of the following is a fundamental requirement for the firm regarding its operations and conduct?Overview of Regulatory Framework
  49. 199.A client is interested in purchasing shares of a company directly from other institutional investors without using a public exchange. This type of transaction would occur in which of the following markets?Knowledge of Capital Markets
  50. 200.A registered representative (RR) is approached by a client who expresses interest in purchasing shares of a publicly traded company that is headquartered in the client's home country, which is outside the United States. The client is a non-U.S. resident and wishes to execute the transaction on the client's domestic exchange. Under which regulation would this transaction generally fall outside of U.S. jurisdiction?Overview of Regulatory Framework