Free SIE Knowledge Questions and Answers

Question 1

FINRA's Rule 3220 was created primarily to:

Accepted Answer

forbid presents and gratuities from one business to another.

Answer

control rival corporations' securities exchanges.

Answer

forbid non-monetary remuneration.

Answer

control company expenditures.

Question 2

Which answer accurately sums up a margin account?

Accepted Answer

Brokers lend money to investors, who use it for trading.

Answer

Traders need to understand the minimum balance requirements.

Answer

Brokerage costs are not payable by investors.

Answer

Investors make their stock portfolios more resilient.

Question 3

Which of the following factors largely affects an option contract's price?

Accepted Answer

The linked stock's share price

Answer

If it's a put or a call

Answer

The date of the strike

Answer

The price at which strikes

Question 4

Which of these describes an Exchange-traded fund's (ETF) drawback?

Accepted Answer

Expenses of trading versus stocks

Answer

Has to release holdings every day

Answer

better tax efficiency compared to alternative investments, such as mutual funds

Answer

exchanged via the public market

Question 5

The following are some of the main reasons why investors engage in passive ETF investing:

Accepted Answer

have longer-term gains and save more money than you would from alternative trading methods' higher fees.

Answer

make quick profits by trading aggressively and then holding onto stocks for a while till their value rises and then trading them.

Answer

make quick profits on large purchases of shares made at a discount to the S&P Index.

Answer

have greater returns over an extended period of time, notwithstanding additional costs associated with alternative trading methods.

Question 6

Which of the above scenarios demonstrates an unsystematic risk?

Accepted Answer

Due to poor demand, American Airlines announced route cancellations, which dropped the value of its stock.

Answer

Oil businesses are impacted by the war in Ukraine, which lowers the value of their shares.

Answer

The COVID-19 outbreak drives down stock prices by forcing many businesses to close.

Answer

Stock values fall after a hurricane significantly affects the majority of the east coast.

Question 7

Which of the following describes the risk of losing money on an investment as a result of changes in the economy?

Accepted Answer

Risk of the market

Answer

Risk to equity

Answer

Risk of currency fluctuations

Answer

Risk of interest rates

Question 8

What is the name of a stock order that won't be filled unless a stock hits or drops below a specific market price?

Accepted Answer

Limitation of order

Answer

Order cancellation

Answer

Put an end to the order

Answer

Order of market

Question 9

An organization makes $100,000 a year, but it also spends $75,000. The corporation has 10,000 issued shares and owes $7,000 to preferred shareholders. Regarding the value of each share, which of the following assertions is true?

Accepted Answer

The par value of non-preferred stockholders' shares will be $1.80.

Answer

To enhance the value of the stock held by shareholders, the corporation ought to issue an additional 10,000 shares.

Answer

Each share will be worth $2.20.

Answer

10% of the company's stock is owned by investors, whose shares are worth at least $5,000.

Question 10

JCB Company owns 5000 shares of issued stock in addition to 1000 shares of treasury stock. The right amount of common stock is represented by which of the following?

Accepted Answer

4000

Answer

6000

Answer

1000

Answer

5000