Online Access Free SIE Exam Questions

An investor generally purchases an open-end mutual fund from which of the following parties?

• A.The NYSE
• B.An existing shareholder
• C.The fund's custodian
• D.The fund's underwriter

Which of the following transactions is most profitable if executed prior to a significant rise in a company's stock price?

• A.Buying a call option
• B.Selling a put option
• C.Buying a put option
• D.Selling a call option

A registered representative (RR) owns 500 shares of a thinly traded security. A customer of the firm calls the RR to place a sell order for 10,000 shares of the same security. The RR sells his shares before entering the customer's order to sell. Which of the following activities has the RR just engaged in?

• A.Front running
• B.Market manipulation
• C.Insider trading
• D.Selling away

A customer purchased 100 shares of Company XYZ common stock five years ago for $20.00 per share. Over the life of her investment, the customer received cash dividends of $2.00 per share, on which she paid total income taxes of $0.50 per share. She recently sold the stock for $30.00 per share. What is the customer's cost basis in each share of XYZ stock?

• A.$30.00
• B.$21.50
• C.$22.00
• D.$20.00

A registered representative must complete which of the following activities when entering a discretionary trade?

• A.Only exercise discretion over market orders
• B.Receive instructions from the customer as to the price at which to buy or sell a security
• C.Indicate that discretion was exercised on the order ticket to be identified for supervisory review
• D.Obtain authorization from the customer before each discretionary order is entered