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SIE — Practice Questions flashcards

6 of 60 questions free to study here · 18 topics · the whole deck is built into Willys

Multiple-choice practice questions, one best answer each, on markets, stocks, bonds, munis, funds, options, risks, orders and settlement, accounts, AML and regulation.

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Practice deck · part of FINRA SIE and Series 7 · written against: FINRA content outlines; T+1 settlement (May 2024); SECURE 2.0 RMD ages. Updated 2026-10-10.

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  1. XYZ went public five years ago. Today an investor sells 500 shares of XYZ on an exchange to another investor. Who receives the proceeds of this sale?

    A) The exchange where the trade took place
    B) The underwriter that managed the IPO
    C) XYZ, the company that issued the shares
    D) The investor who sold the shares
    D) The investor who sold the shares

    This is a secondary-market trade between investors, so the seller gets the money. The issuer received proceeds only once, in the primary-market IPO.
    Capital Markets
  2. A city will build a toll bridge and repay the bonds only from toll collections. Which type of bond is this, and what usually comes before the issue?

    A) A general obligation bond, preceded by a feasibility study
    B) A revenue bond, preceded by a feasibility study
    C) A general obligation bond, preceded by a voter referendum
    D) A revenue bond, preceded by a voter referendum
    B) A revenue bond, preceded by a feasibility study

    Bonds repaid only from a facility's income are revenue bonds, and a feasibility study shows the project can cover the debt. Voter approval is typical of GO bonds backed by taxing power.
    Municipal Securities
  3. Which risk can an investor reduce by spreading a stock portfolio across many companies and industries?

    A) Interest-rate risk
    B) Systematic risk
    C) Unsystematic risk
    D) Purchasing-power risk
    C) Unsystematic risk

    Unsystematic risk is specific to one company or industry, so diversification reduces it. Systematic (market) risk affects the whole market and cannot be diversified away.
    Investment Risks
  4. A customer buys common stock regular way on a Monday, and there are no holidays that week. When does the trade settle?

    A) Monday
    B) Wednesday
    C) Tuesday
    D) Thursday
    C) Tuesday

    Regular-way stock trades settle T+1, one business day after the trade date.
    Settlement
  5. A college student wants to take the SIE exam before joining any firm. Which statement is accurate?

    A) No sponsorship is needed; a pass is valid for four years
    B) No sponsorship is needed; a pass is valid for two years
    C) A firm must sponsor the candidate; a pass is valid for two years
    D) A firm must sponsor the candidate; a pass is valid for four years
    A) No sponsorship is needed; a pass is valid for four years

    Anyone at least 18 years old may take the SIE without sponsorship, and a passing result stays valid for four years. Top-off exams such as the Series 7 are the ones that need a sponsoring firm.
    Registration
  6. A customer's stock portfolio falls 35% in a market decline. Her broker-dealer remains solvent. What does SIPC cover?

    A) The cash portion of the loss but not the securities
    B) Nothing, since SIPC covers firm failure, not market loss
    C) Half of the loss, with the rest a creditor claim
    D) The full loss, up to the per-customer coverage limit
    B) Nothing, since SIPC covers firm failure, not market loss

    SIPC protects customers when a broker-dealer fails, restoring missing cash and securities. It never reimburses declines in market value.
    Customer Protection

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • Checked against the FINRA Securities Industry Essentials (SIE) Examination Content Outline (© 2025 FINRA; topic list only; no text copied).
  • Checked against SEC Investor.gov glossaries, TreasuryDirect product descriptions and MSRB EMMA education pages for product facts, and against FINRA rule summaries and SEC releases on T+1 settlement, Regulation Best Interest and Regulation SHO (reference only).
  • Checked against FinCEN guidance on suspicious activity reporting and SIPC's published coverage explanations (reference only).

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