SIE practice test
10 questions per round from the 19-question free bank, weighted toward your weaker topics and questions you have not seen recently.
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1/10 · Understanding Products and Their Risks · difficulty 3/5
A bond is trading below par. How do its nominal yield, current yield and yield to maturity compare?
Practice by topic
- Knowledge of Capital Markets 16%
- Understanding Products and Their Risks 44%
- Understanding Trading, Customer Accounts and Prohibited Activities 31%
- Overview of the Regulatory Framework 9%
Free SIE practice exam questions, answers explained
About these questions
19 of the free questions have their own page with the correct answer, why each other choice is wrong, and the primary source it was checked against. They are original items written against the Financial Industry Regulatory Authority (FINRA)'s published blueprint, not recalled exam questions.
Knowledge of Capital Markets (16% of the SIE)
- A broker-dealer fails and a retail customer cannot access the securities in their account. Which body is relevant?
- Two institutions trade a large block of stock directly with one another without using a broker-dealer. Which market is this?
- The Federal Reserve conducts open market operations to influence the money supply. This is an example of what?
- An underwriter buys an entire issue from the issuer and resells it, bearing the risk of unsold shares. What is this arrangement?
Understanding Products and Their Risks (44% of the SIE)
- A bond is trading below par. How do its nominal yield, current yield and yield to maturity compare?
- An investor diversifies a portfolio across many issuers and sectors. Which risk does this principally address?
- Prevailing interest rates rise after an investor buys a fixed-rate bond. What happens to the bond's market price?
- A mutual fund investor signs a document committing to invest enough over 13 months to reach a reduced sales charge. What is this?
- An investor writes a call option on shares they already own. How is this position described?
- Which characteristic does the SIE outline associate with direct participation programmes?
Understanding Trading, Customer Accounts and Prohibited Activities (31% of the SIE)
- A customer holds 100 shares with a cost basis of $60 per share when a two-for-one split is completed. What is the position afterwards?
- A registered representative notices a pattern of transactions with no apparent lawful purpose. Which report does this call for?
- A firm fills a customer order from its own inventory rather than finding a counterparty. In what capacity did it act?
- A trader places an order for their own account ahead of a large customer order they know is coming. What is this?
- What does the ex-dividend date determine?
- Regulation S-P, as listed in the SIE outline, governs which of the following?