SIE Exam: 1001 Practice Questions For Dummies

A helpful and effective SIE test prep resource

If you want a job in the Securities industry, the first step is to show your employer you’ve got what it takes. And to do that, you need a great score on the SIE Exam. You can maximize your chances of acing it on the first try with the latest SIE practice resource from your friends at For Dummies.

SIE Exam: 1001 Practice Questions For Dummies offers helpful and challenging practice questions, along with detailed, step-by-step answers and explanations, for anyone preparing for the Securities Industry Essentials exam. This useful study aid will help you banish test anxiety and get familiar with the format of the test questions. It also provides:

• Questions for every domain on the SIE exam
• Fully explained answers for every question so you can see where you went wrong (or right!) on each one

The perfect companion for everyone preparing for the Securities Industry Essentials exam, SIE Exam: 1001 Practice Questions For Dummies is a fast, efficient, and effective way to prep for the test.

Steven M. Rice is a partner and instructor at Empire Stockbroker Training Institute, one of the country’s leading schools for training to the securities industry. Steven is the author of Series 7 Exam For Dummies, SIE Exam For Dummies, and Series 7 Exam: 1001 Practice Questions For Dummies.

Introduction 1

What You’ll Find 1

Beyond the Book 2

Where to Go for Additional Help 2

Part 1: Tackling the Questions 3

Chapter 1: Securities Underwriting: The Process and the Team Players 5

The Problems You’ll Work On 5

What to Watch Out For 5

1–35 Bringing New Issues to Market 6

36–43 Types of Securities Offerings 10

44–61 Exempt Securities and Transactions 11

Chapter 2: Equity Securities: Corporate Ownership 15

The Problems You’ll Work On 15

What to Watch Out For 15

62–97 Common Stock 16

98–125 Preferred Stock 20

126–141 ADRs, Rights, and Warrants 24

Chapter 3: Debt Securities: Corporate and US Government Loans 27

The Problems You’ll Work On 27

What to Watch Out For 27

142–178 Types of Bonds 28

179–208 Price and Yield Calculations 32

209–224 U S Government Securities 36

225–238 Money Market Instruments 37

Chapter 4: Municipal Bonds: Local Government Securities 41

The Problems You’ll Work On 41

What to Watch Out For 42

239–268 GO and Revenue Bonds 43

269–275 The Primary Market 47

276–286 Additional Municipal Bonds 48

287–296 Municipal Notes 49

297–302 Municipal Fund Securities 50

303–313 Taxes on Municipal Bonds 51

314–335 Municipal Bond Rules 52

Chapter 5: Delivering Diversification with Packaged Securities 57

The Problems You’ll Work On 57

What to Watch Out For 58

336–340 Investment Company Rules 59

341–384 Management Investment Companies 59

385–406 Investment Company Options 65

407–431 Annuities 67

432–436 Variable Life Insurance Products 70

Chapter 6: Working with Direct Participation Programs and REITs 73

The Problems You’ll Work On 73

What to Watch Out For 74

437–457 DPPs, General, and Limited Partners 75

458–464 Partnership Paperwork 77

465–470 Passive Gains and Losses 78

471–491 Types of DPPs 79

492–502 REITs 81

Chapter 7: Options: Understanding the Basics of Puts and Calls 83

The Problems You’ll Work On 83

What to Watch Out For 84

503–535 Option Basics 85

536–573 Standard Option Math 88

574–602 Option Paperwork and Rules 93

Chapter 8: Customer Accounts: Doing the Right Thing 97

The Problems You’ll Work On 97

What to Watch Out For 97

603–622 Opening Accounts 98

623–640 Selecting the Appropriate Type of Account 101

641–664 Margin Accounts 103

665–667 Telephone Act of 1991 106

Chapter 9: Securities Analysis: Doing a Little Market Research 107

The Problems You’ll Work On 107

What to Watch Out For 108

668–686 Systematic and Nonsystematic Risk 109

687–709 Fundamental and Technical Analysis 111

710–734 Money Supply and Monetary Policy 114

735–744 Economic Indicators 117

745–752 Cyclical, Defensive, and Growth Investments 118

753–755 Economic Theories 118

Chapter 10: Securities Markets: Taking Orders and Executing Trades 121

The Problems You’ll Work On 121

What to Watch Out For 121

756–763 Primary and Secondary Market 122

764–774 Making the Trade 123

775–781 Broker-Dealer 124

782–810 Executing Customer Orders 125

811–815 Types of Investors 129

Chapter 11: Making Sure the IRS Gets Its Share: Taxes and Retirement Plans 131

The Problems You’ll Work On 131

What to Watch Out For 132

816–822 Tax Categories and Types of Income 133

823–843 Taxes on Investments 133

844–876 Retirement Plans 137

Chapter 12: Rules and Regulations: No Fooling Around 143

The Problems You’ll Work On 143

What to Watch Out For 144

877–892 Securities Regulatory Organizations 145

893–904 FINRA Registration and Reporting Requirements 147

905–957 Trading After the Account Is Open 149

958–993 Additional Rules 156

994–1,001 FDIC and SIPC 161

Part 2: Checking Your Answers 163

Chapter 13: The Answers 165

Chapter 1 Answers 165

Chapter 2 Answers 174

Chapter 3 Answers 187

Chapter 4 Answers 203

Chapter 5 Answers 219

Chapter 6 Answers 234

Chapter 7 Answers 243

Chapter 8 Answers 261

Chapter 9 Answers 272

Chapter 10 Answers 285

Chapter 11 Answers 294

Chapter 12 Answers 302

Index 321

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