Question 1

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

Options :

A : Only exercise discretion over market orders

B : Indicate that discretion was exercised on the order ticket to be identified for supervisory review

C : Obtain authorization from the customer before each discretionary order is entered

D : Receive instructions from the customer as to the price at which to buy or sell a security

Answer: B

Question 2

A broker-dealer (BD) creates a marketing postcard that includes a statement regarding FINRA's endorsement of the BD. Which of the following responses is true?

Options :

A : The statement regarding FINRA-s endorsement is not permissible.

B : The statement is permissible if a principal of the BD approves it in writing prior to use.

C : The statement is permissible if the statement is approved in writing by FINRA prior to use.

D : The statement is permissible if the postcard does not discuss specific investment opportunities.

Answer: A

Question 3

The civil penalty for an individual who is convicted of an insider trading violation is permitted to be an amount up to how many times the profit gained or loss avoided?

Options :

A : 1 time

B : 3 times

C : 6 times

D : 10 times

Answer: B

Question 4

An investor wants to purchase mutual fund shares, but she is concerned about the tax efficiency of the fund. Which of the following disclosures required under industry regulations will help the investor make an informed decision?

Options :

A : The fund-s turnover ratio

B : Sales charges and breakpoint discount opportunities

C : The commissions that the fund pays on each transaction

D : Projections of future dividend and capital gains distributions

Answer: A

Question 5

Assuming yields are held constant, which of the following statements describes what will occur as a discount bond reaches maturity?

Options :

A : Its price increases.

B : Its price decreases.

C : Its par value increases.

D : Its par value decreases.

Answer: A

Free SIE Mock Exam – Practice Online Confidently

Buying Options: