SIE Practice Questions & Answers

Follow capital through markets

A company sells newly issued shares to investors to raise capital for its business. What is the most appropriate response?

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1. Call it a secondary-market resale between existing investors.
2. Assume the issuer receives the proceeds of every later exchange trade.
3. Classify it as a bank deposit.
4. Identify the sale as a primary-market transaction.

Reference basis: FINRA SIE Content Outline, copyright 2025. These are original learning questions, not questions reproduced from the references.

Understand equity ownership

An investor purchases common shares and asks what basic interest was acquired. Select every proposed response that fails to apply the control needed in this case.

Select all answers that apply.

1. Promise a fixed dividend on every common share.
2. Classify the purchase as an insured bank deposit.
3. Identify an ownership interest in the corporation.
4. Describe the shares as the company's fixed repayment obligation.

Reference basis: SEC Investor.gov: Stocks. These are original learning questions, not questions reproduced from the references.

Interpret order conditions

A customer prioritizes prompt execution of a stock order but specifies no maximum purchase price. What is the most appropriate response?

1. Promise that a fast market cannot change the fill price.
2. Recognize a market order's execution focus and price uncertainty.
3. Treat the order as a buy limit at an unstated maximum price.
4. Guarantee execution at the last displayed trade price.

Reference basis: SEC Investor.gov: Types of Orders. These are original learning questions, not questions reproduced from the references.

Understand registration and conduct boundaries

A person passes the SIE and assumes this alone authorizes securities business for a member firm. Select every proposed response that fails to apply the control needed in this case.

Select all answers that apply.

1. Explain that SIE passage alone does not confer the required registration.
2. Describe SIE passage as a government guarantee of investment skill.
3. Promise unrestricted securities-business authority immediately after passing.
4. Assume an SIE result replaces every appropriate qualification examination.

Reference basis: FINRA SIE exam overview and enrollment. These are original learning questions, not questions reproduced from the references.

Separate regulators and protections

A trainee asks which federal agency is associated with securities-market oversight rather than insuring bank deposits. What is the most appropriate response?

1. Identify the Securities and Exchange Commission.
2. Assign federal securities oversight to the FDIC deposit-insurance function.
3. Describe the SEC as guaranteeing market gains.
4. Treat a private issuer's board as the federal securities regulator.

Reference basis: FINRA SIE Content Outline, copyright 2025. These are original learning questions, not questions reproduced from the references.

Read debt claims and risks

An investor buys a conventional corporate bond rather than the issuer's common shares. Select every proposed response that fails to apply the control needed in this case.

Select all answers that apply.

1. Identify the bondholder as a creditor under the debt terms.
2. Describe bond principal as a discretionary common dividend.
3. Treat the bond as ownership of a specific slice of all company property.
4. Grant the bondholder all common-stock voting rights automatically.

Reference basis: SEC Investor.gov: Bonds. These are original learning questions, not questions reproduced from the references.

Establish account authority

A firm opens an account but has not gathered the essential facts about the customer and authorized persons. What is the most appropriate response?

1. Skip the information because the first order is small.
2. Treat an unsolicited social-media claim as verified trading authority.
3. Obtain the essential customer and authority information required for account handling.
4. Assume the customer's name alone establishes every relevant fact.

Reference basis: FINRA Rule 2090: Know Your Customer. These are original learning questions, not questions reproduced from the references.

Track option rights and obligations

A customer purchases a standard call option and asks what exercise right it provides. Select every proposed response that fails to apply the control needed in this case.

Select all answers that apply.

1. Treat purchase of the call as an obligation to exercise it.
2. Describe a call holder's right as the right to sell the underlying.
3. Identify the right to buy the underlying at the strike price.
4. Promise that the call's value cannot fall below its premium.

Reference basis: FINRA investor education: Options. These are original learning questions, not questions reproduced from the references.

Operate compliance controls

A firm plans to rely only on an informal employee promise rather than a written anti-money-laundering program. What is the most appropriate response?

1. Describe AML controls as optional marketing material.
2. Assume low transaction volume removes every AML obligation.
3. Treat informal good intentions as a substitute for a written program.
4. Maintain the required written AML program with applicable controls and review.

Reference basis: FINRA Rule 3310: Anti-Money Laundering Compliance Program. These are original learning questions, not questions reproduced from the references.

Compare pooled investments

An investor submits a regular open-end mutual-fund purchase order and asks whether it trades continuously like a listed share. Select every proposed response that fails to apply the control needed in this case.

Select all answers that apply.

1. Promise continuous intraday stock-exchange pricing for the ordinary fund order.
2. Guarantee execution at yesterday's NAV.
3. Explain pricing at the applicable next-computed NAV under the fund's rules.
4. Assume a stated NAV prevents a later investment loss.

Reference basis: FINRA investor education: Mutual Funds. These are original learning questions, not questions reproduced from the references.