105:00 The clock starts when you press begin, or when you answer your first question.

The full mock

80 questions, 105 minutes, four choices, scored the way FINRA scores it. Free, in full, as many times as you want.

SIE outline 1 to 4Full mock

Read this before you read your score. The real exam draws 12 from Section 1, 33 from Section 2, 23 from Section 3, 7 from Section 4. This paper draws 55 from Section 1, 20 from Section 2, because those are the outline items written so far. Nothing at all comes from Sections 3 and 4, which are 30 of the real exam's 75 scored questions. So it is a real check on what you have studied and a real run at the clock and the format, and it is not a prediction of your exam score. The section table in the result shows both mixes side by side.

Before you start

This paper is built the way the real one is: 80 questions in total, of which 75 count toward your score and 5 do not. You are not told which, the same way you are not told on the day. The ones that do not count are ordinary questions from our own bank, put here so the paper is the real length and the real pace. FINRA's own unscored questions are new ones it is trialling, which is a different thing, and we are not trialling anything.

You have 105 minutes, FINRA's own limit. Nothing is marked or explained until you finish, and the button on each question marks it for review instead. Answer everything: there is no penalty for a wrong answer on the real exam either. Each question also asks how sure you are, and that one tap is what lets the coach tell a confident mistake from a lucky guess afterwards.

FINRA's own Securities Industry Essentials content outline, copyright 2025, at finra.org/sites/default/files/2025-10/SIE_Content_Outline.pdf: 75 scored multiple-choice items with four answer choices each, 5 additional unidentified pretest items distributed at random, 80 items in total, and 1 hour and 45 minutes to finish. The passing score of 70 on a 0 to 100 scale is FINRA's own, from its exam page.

Questions

Pick an answer and say how sure you are. Nothing is marked until you finish.

Question 1Exam level

A rise in new building permits typically happens before the broader economy exits a contraction. What kind of indicator is that?

How sure are you?

Correct: A. Moving before the cycle turns is the definition of a leading indicator.
B. A lagging indicator only confirms a turn that already happened, the opposite timing.
C. A coincident indicator moves with the cycle in real time, not ahead of it.
D. An inflation indicator tracks the price level on its own axis, not cycle timing.

Unit: SIE outline 1.3.2

Question 2Exam level

The dollar strengthens sharply against the euro. What happens to the price of imported European goods for U.S. buyers, and to U.S. exporters selling into Europe?

How sure are you?

Correct: A. A stronger home currency makes imports cheaper and exports more expensive abroad.
B. Reverses both effects; a stronger currency makes imports cheaper, not more expensive.
C. Only imports get cheaper under a stronger currency; exports get more expensive.
D. Contradicts the outline's own stated exchange-rate effect on cross-border prices.

Unit: SIE outline 1.3.3

Question 3Exam level

A Japan-headquartered automaker operates an assembly plant inside the United States. In which measure does that plant's output count for the United States?

How sure are you?

Correct: A. GDP is a location-based measure: output produced within a country's own borders, by anyone, foreign-owned included.
B. GNP is ownership-based, tracking a country's own citizens and companies wherever they operate; a foreign-owned plant does not count toward U.S. GNP simply because its output is sold in the U.S.
C. GDP is a location-based measure specific to where the plant physically sits, not where its parent company is headquartered.
D. GDP explicitly counts output produced within a country's borders by anyone, foreign-owned included.

Unit: SIE outline 1.3.3

Question 4Exam level

A U.S.-headquartered company's factory in Germany reports rising output. In which U.S. measure does that output count?

How sure are you?

Correct: A. GNP is ownership-based: output produced by a country's own citizens and companies, wherever in the world they operate, so a U.S. company's German factory counts toward U.S. GNP.
B. GDP is location-based; output produced outside U.S. borders does not count toward U.S. GDP regardless of where it is later sold.
C. The factory's location inside Germany affects Germany's GDP, not its GNP claim on this output, which follows ownership instead.
D. GNP specifically counts a country's own companies' foreign output; it does not vanish from both measures.

Unit: SIE outline 1.3.3

Question 5Exam level

Industrial production moves up and down in step with the business cycle itself, in real time. What kind of indicator is that?

How sure are you?

Correct: A. Moving with the cycle in real time is the definition of a coincident indicator.
B. A leading indicator moves before the turn, not with it.
C. A lagging indicator only confirms a turn after it happens.
D. A cyclical stock is a stock category, not an economic indicator.

Unit: SIE outline 1.3.2

Question 6Exam level

A homebuilder's stock rises sharply during expansions and falls sharply during contractions, tracking consumer confidence closely. What kind of stock is that, on the outline's own classification?

How sure are you?

Correct: A. Rising and falling with the business cycle, tied to consumer confidence, is the definition of a cyclical stock.
B. A defensive stock holds steady regardless of the cycle, the opposite behavior.
C. A growth stock is valued for future earnings and reinvestment, not cycle sensitivity specifically.
D. A lagging indicator is an economic data series, not a stock category.

Unit: SIE outline 1.3.2

Question 7Exam level

Monetarist theory, as the outline names it, favors managing the economy through which lever?

How sure are you?

Correct: A. Monetarist theory favors managing the money supply, with policy set by steady rules rather than discretionary intervention.
B. That describes Keynesian theory, the competing named theory, not monetarist.
C. Congress does not set the federal funds rate under either named theory; the FOMC does.
D. Exchange-rate policy is a separate international factor, not monetarist theory's named lever.

Unit: SIE outline 1.3.2

Question 8Exam level

What does a country's balance of payments record?

How sure are you?

Correct: A. The balance of payments is the record of a country's transactions with the rest of the world.
B. That describes fiscal policy or the federal budget, not the balance of payments.
C. A currency's value against a benchmark is an exchange rate, a separate factor.
D. Stock market capitalization is unrelated to a country's payments with the rest of the world.

Unit: SIE outline 1.3.3

Question 9Exam level

A country buys more from abroad than it sells abroad. What is that called on its balance of payments, and what is the reverse case called?

How sure are you?

Correct: A. Buying more than it sells is a deficit; selling more than it buys is a surplus.
B. Reverses the two terms; buying more than selling is a deficit, not a surplus.
C. Recession and expansion are business-cycle phases, not balance-of-payments terms.
D. Tariffs and subsidies are trade-policy tools, not descriptions of a payments balance.

Unit: SIE outline 1.3.3

Question 10Exam level

On this outline, what does the abbreviation GDP actually measure?

How sure are you?

Correct: A. GDP measures output produced within a country's own borders, by anyone.
B. That describes GNP, the ownership-based measure GDP is distinguished from.
C. Tax revenue is a fiscal-policy figure, not GDP.
D. Currency value against a benchmark is an exchange rate, unrelated to GDP.

Unit: SIE outline 1.3.3

Question 11Exam level

Which of the following is classified as a lagging economic indicator?

How sure are you?

Correct: C. Employers are slow to cut staff and slow to rehire, so the unemployment rate turns after the cycle does.
A. The interest-rate spread moves ahead of a turn, which is leading, not lagging.
B. GDP measures output as it happens, which is coincident.
D. A building permit is filed before construction begins, which is about as leading as an indicator gets.

Unit: SIE outline 1.3.2

Question 12Exam level

A contraction deepens. Which group of shares is described as defensive?

How sure are you?

Correct: B. People keep eating and keep the lights on in every phase of the cycle, so those earnings hold up.
A. A luxury car is the archetypal postponable purchase, a cyclical sector.
C. Construction machinery is bought out of capital budgets, cut early in a downturn.
D. Air travel and resort stays are discretionary spending that falls with income.

Unit: SIE outline 1.3.2

Question 13Exam level

A customer's SIPC-member brokerage firm fails. Which statute created SIPC?

How sure are you?

Correct: B. SIPC exists under the Securities Investor Protection Act of 1970.
A. The 1934 Act created the SEC's authority over markets and firms; it did not create SIPC.
C. That statute registers investment advisers, an unrelated body.
D. That statute governs pooled investment vehicles, not the brokerage-failure protection fund.

Unit: SIE outline 1.1.3

Question 14Exam level

What does GNP measure, as distinct from GDP?

How sure are you?

Correct: A. GNP measures output produced by a country's own citizens and companies, wherever in the world they operate.
B. That is GDP's own location-based definition, the measure GNP is distinguished from.
C. Imports minus exports describes a trade balance, not GNP.
D. A central bank's rate-setting is a monetary-policy fact, unrelated to GNP.

Unit: SIE outline 1.3.3

Question 15Exam level

Which body's founding number on the SIE is 1934?

How sure are you?

Correct: B. The Securities Exchange Act of 1934 is the SEC's founding statute, and 1934 is its number.
A. FINRA's number on this sheet is its 3 named rules, not a founding year.
C. The MSRB carries no SIE statute; its number is its 3 named rules.
D. NASAA carries no SIE statute and no SIE number at all.

Unit: SIE outline 1.1.1

Question 16Exam level

Which of these bodies has no examination staff and no enforcement authority of its own?

How sure are you?

Correct: C. The MSRB writes municipal rules and stops there; it has no examiners of its own.
A. FINRA examines its own member firms and brings enforcement actions.
B. The SEC has its own enforcement powers over federal securities law.
D. The Federal Reserve supervises banks directly and enforces Regulation T within its own domain.

Unit: SIE outline 1.1.2

Question 17Exam level

Regulation T is issued by which body?

How sure are you?

Correct: C. Regulation T, 12 CFR Part 220, is issued by the Federal Reserve's Board of Governors.
A. FINRA polices firm conduct once credit is already in play; it does not write Regulation T.
B. The SEC administers disclosure and registration, not margin credit rules.
D. The Treasury handles tax treatment and Treasury debt, not margin credit.

Unit: SIE outline 1.1.3

Question 18Exam level

Which office is a bureau of the Treasury that receives Bank Secrecy Act filings, not a securities regulator in its own right?

How sure are you?

Correct: A. FinCEN is the Treasury bureau that receives Bank Secrecy Act filings.
B. OFAC is also a Treasury office, but it runs sanctions programs and the SDN list, not Bank Secrecy Act filings.
C. NASAA is an association of state securities administrators, unrelated to the Treasury.
D. The MSRB is a securities SRO, not a Treasury bureau.

Unit: SIE outline 1.1.3

Question 19Harder

A customer's mutual fund shares, purchased at a bank, lose value after that bank itself fails. Which protection scheme, if any, covers this loss?

How sure are you?

Correct: C. The FDIC's own not-covered list names mutual funds directly, and buying them at a bank does not change that. SIPC responds only to a failed SIPC-member brokerage, and no brokerage failed here.
A. Being purchased at a bank does not turn a mutual fund into an insurable deposit.
B. SIPC responds to a failed brokerage firm, not a failed bank; being a security is not, by itself, enough.
D. Invents a split coverage mechanism neither fund provides.

Unit: SIE outline 1.1.3

Question 20Harder

Which SRO's scope is limited to standardized options, and cannot itself clear or guarantee a contract?

How sure are you?

Correct: C. CBOE is the SRO for standardized options, the narrowest scope of the three named SROs, and it does not itself clear or guarantee a contract; that belongs to the Options Clearing Corporation.
A. FINRA's scope is broker-dealers generally, across most product lines, not limited to options.
B. The MSRB's scope is municipal securities, unrelated to options.
D. NASAA is a state-level association, not an options SRO.

Unit: SIE outline 1.1.2

Question 21Harder

NASAA brings a direct federal enforcement action against a broker-dealer for a rule violation. Is this accurate?

How sure are you?

Correct: B. NASAA itself regulates nothing directly; its members, the individual state securities administrators, run blue-sky registration and state enforcement.
A. NASAA is not an SRO; it is an association of state administrators, a different kind of body entirely.
C. NASAA's scope is not limited to municipal securities, and it still is not the direct enforcer even there.
D. FINRA also brings actions against broker-dealers, and state administrators act at the state level; the SEC is not the only possible actor.

Unit: SIE outline 1.1.3

Question 22Exam level

Which two Securities Act of 1933 sections govern the primary market, where a security is issued for the first time?

How sure are you?

Correct: A. Securities Act sections 7 and 10 are the sections that govern the primary market: registration content and the prospectus itself.
B. Sections 12 and 15 are Exchange Act sections governing the secondary market, not the primary market.
C. Section 23 governs what 'effective' means, not the primary market generally.
D. Sections 15 and 15-A govern broker-dealer registration and FINRA's own charter, not the primary market.

Unit: SIE outline 1.2.1

Question 23Exam level

Which two Exchange Act of 1934 sections govern the secondary market, where existing securities trade among investors?

How sure are you?

Correct: A. Exchange Act sections 12 and 15 govern the secondary market.
B. Sections 7 and 10 are Securities Act sections governing the primary market.
C. Section 23 governs registration-statement effectiveness, unrelated to ongoing trading.
D. Section 8(a) sets a registration statement's effective-date clock, an offerings topic, not the secondary market generally.

Unit: SIE outline 1.2.1

Question 24Exam level

Under FINRA Rule 2269, when must a member give written notification of its interest in a primary or secondary distribution?

How sure are you?

Correct: A. Rule 2269's own words require written notification at or before completion of the transaction.
B. The rule requires notification on its own terms, not only after an SEC request.
C. No thirty-day advance window appears in the rule; the deadline runs to completion, not before it begins.
D. The rule applies to both primary and secondary distributions.

Unit: SIE outline 1.2.1

Question 25Exam level

Which describes a 'secondary distribution' in FINRA Rule 2269's own vocabulary?

How sure are you?

Correct: A. A secondary distribution is a large existing holder selling registered shares in bulk, at a fixed price, priced like the primary market rather than a routine secondary-market trade.
B. That describes the fourth market, a different concept entirely.
C. An ordinary retail trade is a routine secondary-market trade, not a secondary distribution.
D. An issuer's first-ever sale is an IPO, a primary-market event.

Unit: SIE outline 1.2.1

Question 26Exam level

In which market does the issuer always receive the proceeds of the sale?

How sure are you?

Correct: A. The primary market's whole definition is that the issuer receives the proceeds; there is no second condition.
B. In the secondary market the issuer receives nothing; cash moves between investors.
C. The third market is off-exchange trading of a listed security; the issuer is not a party to it.
D. The fourth market is institution-to-institution trading; the issuer receives nothing there either.

Unit: SIE outline 1.2.1

Question 27Exam level

What is an exchange rate?

How sure are you?

Correct: A. An exchange rate is the price of one currency in terms of another.
B. The balance of payments records total transactions, a different figure from a currency's price against another currency.
C. The federal funds rate is a domestic monetary-policy tool, not a currency price.
D. A tariff rate is a trade-policy charge, not a currency price.

Unit: SIE outline 1.3.3

Question 28Exam level

A broker-dealer buys a block of NYSE-listed stock over the counter from a pension fund, away from the exchange. Which market is this?

How sure are you?

Correct: C. A listed security, traded over the counter, with a broker-dealer involved, is exactly the third market.
A. The issuer is not a party to this trade; nothing here is primary.
B. Names the venue correctly but misses that the security's exchange listing is what makes this specifically the third market, not plain secondary trading.
D. A broker-dealer is present here; the fourth market requires no dealer at all.

Unit: SIE outline 1.2.1

Question 29Exam level

An introducing firm and a clearing firm both service the same customer account. Under FINRA Rule 2266, what may the two firms do about the SIPC notice requirement?

How sure are you?

Correct: A. FINRA Rule 2266's own text lets the two firms assign the SIPC-notice duty to just one of them when both service the account.
B. The rule exists to avoid a duplicate-notice requirement, not to require one.
C. The duty still exists; the rule only makes it assignable, it does not eliminate it.
D. The rule lets the two firms assign the duty between themselves; it does not fix it to the clearing firm alone.

Unit: SIE outline 1.1.4

Question 30Exam level

A large institutional client uses one firm that both brings in its trades and holds its assets, under a single relationship. What is that firm acting as?

How sure are you?

Correct: A. A prime broker does both the introducing and clearing roles for a large client, under one relationship.
B. A transfer agent keeps the ownership record; it does not introduce or clear trades.
C. A municipal advisor advises municipal issuers, not a trading client like this one.
D. A depository settles securities in bulk after a trade; it is not a single client's own relationship firm.

Unit: SIE outline 1.1.4

Question 31Exam level

A firm charges its clients an annual fee of 1% of assets for continuing portfolio advice and places no trades at all. Under which statute does it register?

How sure are you?

Correct: B. The firm is paid a continuing fee for advice, not for effecting transactions, which is the line the outline draws between an adviser and a broker-dealer.
A. Exchange Act Section 15 registers firms that effect transactions for others; this firm places none.
C. The 1933 Act registers issuers' offerings, not advisory businesses.
D. The Investment Company Act governs pooled vehicles; a fee on separate accounts pools nothing.

Unit: SIE outline 1.1.4

Question 32Exam level

An introducing firm takes a customer's order but holds none of the customer's money or securities. Which firm actually holds and safeguards those assets, and sends the account statements?

How sure are you?

Correct: B. The clearing, or carrying, firm holds the customer's assets, clears and settles the trades, and issues the statements.
A. A custodian bank can hold assets in other contexts, but the outline's introducing/clearing split names the clearing firm as this role.
C. A transfer agent keeps the issuer's ownership record; it does not hold a customer's brokerage assets.
D. DTCC nets and settles between clearing firms; it is not the firm that holds a specific customer's account.

Unit: SIE outline 1.1.4

Question 33Exam level

A single firm is exclusively assigned to one listed stock on an exchange and carries an affirmative obligation to maintain a fair and orderly market in it. What is this participant called today?

How sure are you?

Correct: B. A designated market maker, formerly called a specialist, is the single firm assigned to a listed security with that affirmative obligation.
A. A market maker is one of possibly several competing quoters in an over-the-counter security, not a single exclusive assignment.
C. An introducing firm takes customer orders; it has no role making prices in a listed security.
D. A prime broker finances and reports an institution's trades elsewhere; it does not make markets.

Unit: SIE outline 1.1.4

Question 34Exam level

Which participant maintains the issuer's official record of registered owners and pays the dividends off it?

How sure are you?

Correct: B. The transfer agent keeps the issuer's official register of owners, records ownership changes, and pays dividends off that register.
A. The registrar audits that work, reconciling shares outstanding against shares authorized; it keeps no owner list of its own.
C. A custodian safekeeps property but records no ownership.
D. DTCC settles between clearing firms and keeps no owner list.

Unit: SIE outline 1.1.4

Question 35Exam level

Bramwell Foods has been listed for 7 years. It sells 3,000,000 newly issued shares and receives the proceeds. The same week, its CFO sells 400,000 of his own existing shares to the public. How should the two blocks be classified?

How sure are you?

Correct: B. Block A is new shares with the issuer paid, a follow-on offering and a primary-market event. Block B is existing shares sold by the CFO, a secondary offering, a distribution; the company receives nothing from it.
A. Bramwell has been public 7 years; there is only ever one IPO.
C. Reverses the two classifications.
D. Block A pays the issuer directly, which no ordinary secondary-market trade does.

Unit: SIE outline 1.4

Question 36Exam level

Vantage Rail runs a best-efforts offering of 1,000,000 shares at $18.00. The underwriter places 720,000. Who holds the remaining 280,000 shares, and what did Vantage Rail raise?

How sure are you?

Correct: B. In best efforts, unsold shares stay with the issuer, never left. Proceeds are only on shares actually placed: 720,000 x $18.00 = $12,960,000.
A. Puts the shares with the underwriter, which only happens in a firm commitment, and overstates proceeds as if all 1,000,000 sold.
C. Correct proceeds figure, wrong holder of the unsold shares.
D. Correct holder, but overstates proceeds as if the full 1,000,000 shares sold.

Unit: SIE outline 1.4

Question 37Exam level

After an issuer files its registration statement, how long is the default cooling-off period before the statement can become effective?

How sure are you?

Correct: A. Section 8-A sets the effective date at the twentieth day after filing, or such earlier date as the Commission may determine.
B. 90 days appears nowhere in the offering timeline the outline names.
C. 6 months is a Rule 144 resale holding-period figure, not the registration cooling-off period.
D. 20 days is the outline's own stated default, though the SEC may move it earlier.

Unit: SIE outline 1.4

Question 38Exam level

Under Regulation D Rule 504, what is the cap on the aggregate offering price, and over what period is it measured?

How sure are you?

Correct: A. Rule 504 caps the aggregate offering price at $10,000,000, measured on a rolling basis, less whatever was already sold in the twelve months before and during the offering.
B. $5,000,000 was Rule 504's cap before it was raised; the current cap is $10,000,000.
C. The cap is measured on a rolling basis, not a one-time lifetime allowance.
D. $1,000,000 and a 90-day window appear nowhere in Rule 504's own cap.

Unit: SIE outline 1.4

Question 39Exam level

Under Regulation D Rule 506(b), how many non-accredited purchasers may an issuer sell to, without general solicitation?

How sure are you?

Correct: A. 506(b) allows no general solicitation, but permits up to 35 non-accredited purchasers in any 90-day period.
B. 100 does not appear in Rule 506(b)'s own text; the limit is 35.
C. 506(b) does allow a limited number of non-accredited purchasers; it is not accredited-only.
D. Correctly states the 35-purchaser number but drops the no-general-solicitation condition that defines 506(b) against 506(c).

Unit: SIE outline 1.4

Question 40Exam level

A company reports $4 million of net income for the year, yet its cash balance fell. Which statement shows where the cash went?

How sure are you?

Correct: C. The statement of cash flows sorts cash movement into operating, investing and financing activities; it is the only place a falling cash balance beside a profit is explained.
A. The balance sheet reports the cash balance at a moment, never what moved it.
B. The income statement reports the profit itself, never cash movement.
D. The notes disclose policy and detail; they do not restate net income.

Unit: SIE outline 1.3.2

Question 41Exam level

What is a tombstone advertisement, in an offering's own document set?

How sure are you?

Correct: A. The tombstone ad only announces the deal; it is not an offer at all.
B. That describes the final prospectus, a separate document that does carry a price.
C. That describes the red herring, used before effectiveness, not the tombstone ad.
D. A registration statement is the issuer's own filing, not an advertisement.

Unit: SIE outline 1.4

Question 42Exam level

A firm fails holding $150,000 cash and $600,000 in securities for one customer. How much does SIPC pay?

How sure are you?

Correct: D. $500,000. The cash ($150,000) is under the $250,000 cash sub-limit, so it counts in full. Add the securities and the claim reaches $750,000, but the $500,000 overall cap binds first.
A. Tempts you into simply adding the two figures. SIPC caps the total at $500,000 regardless of how the $750,000 splits.
B. Pays only the cash portion, as if securities weren't covered at all. Both cash and securities count toward the same $500,000 cap.
C. Pays only the securities and drops the cash entirely. The cash is protected too, it just doesn't push the total past the cap.

Unit: SIE outline 1.1.3

Question 43Exam level

Which act of Congress created the Securities and Exchange Commission itself?

How sure are you?

Correct: B. The 1934 Act governs the trading markets and the people in them, and it is the act that creates the SEC itself.
A. The 1933 Act governs new issues and the registration statement an issuer files; it does not create the SEC.
C. The 1940 Act regulates investment companies, well after the SEC already existed.
D. The 1939 Act governs bond indentures, not the SEC's own creation.

Unit: SIE outline 1.1.1

Question 44Exam level

Which SRO is the exchange SRO for listed options, writing and enforcing its own rulebook for trading on that market?

How sure are you?

Correct: A. CBOE is scoped to listed options and, like FINRA, both writes and enforces its own rulebook.
B. The MSRB writes municipal-securities rules but never enforces them, and its scope is municipal securities, not listed options.
C. The SEC oversees SROs but does not write or enforce exchange-trading rules directly.
D. FINRA governs broker-dealers broadly; the outline names CBOE specifically as the exchange SRO for listed options.

Unit: SIE outline 1.1.2

Question 45Exam level

An SRO finishes writing a new rule for its own members. What must happen before that rule can take effect?

How sure are you?

Correct: A. Every SRO's rulebook is filed with and can be reviewed by the SEC before it stands.
B. An internal member vote does not replace SEC review of the filed rule.
C. Publication alone, without SEC review, is not how an SRO's rulebook is checked.
D. An unwritten-into-force rule with no SEC review at all contradicts the oversight structure the outline names.

Unit: SIE outline 1.1.2

Question 46Exam level

The SEC states its own mission in three parts: protecting investors, maintaining fair, orderly and efficient markets, and which third goal?

How sure are you?

Correct: A. The SEC's own mission page names facilitating capital formation as its third stated goal, alongside investor protection and fair, orderly, efficient markets.
B. Setting monetary policy is the Federal Reserve's job, not the SEC's.
C. Insuring bank deposits is the FDIC's job, not the SEC's.
D. FINRA writes its own rulebook, which the SEC then reviews; the SEC does not write it directly.

Unit: SIE outline 1.1.1

Question 47Exam level

FINRA's own authority to register as a national securities association comes from which provision?

How sure are you?

Correct: A. Exchange Act Section 15-A is where FINRA's own authority as a national securities association comes from.
B. Section 7 sets registration content for a new issue, unrelated to FINRA's own charter.
C. Section 12 governs a security's own exchange registration, not FINRA's charter as an association.
D. Section 23 governs what an effective registration statement does and does not mean, not FINRA's charter.

Unit: SIE outline 1.1.1

Question 48Exam level

What does the SEC's oversight of FINRA's and the MSRB's own rulebooks actually consist of?

How sure are you?

Correct: A. Every SRO's rulebook, including FINRA's and the MSRB's, is filed with and can be reviewed by the SEC; the SRO itself writes the rules.
B. The SRO writes its own rulebook; the SEC reviews it rather than writing it.
C. FINRA and CBOE enforce their own rules, and an MSRB violation is enforced by FINRA or a bank regulator, not routinely by the SEC itself.
D. Membership dues are not part of the SEC's stated oversight role over an SRO's rulebook.

Unit: SIE outline 1.1.1

Question 49Exam level

Which of the following is governed by the Securities Act of 1933 rather than the Securities Exchange Act of 1934?

How sure are you?

Correct: A. The 1933 Act governs new issues, including the registration statement an issuer files before its first sale.
B. Ongoing reporting after a security is already trading is 1934 Act, trading-market, territory.
C. The 1934 Act creates the SEC, not the 1933 Act.
D. Day-to-day trading of an already-issued security is the 1934 Act's own domain.

Unit: SIE outline 1.1.1

Question 50Exam level

Which Exchange Act section governs a broker-dealer's own registration, as distinct from a security's own exchange listing?

How sure are you?

Correct: B. Exchange Act Section 15 governs a broker-dealer's own registration and regulation, separate from a security's own listing.
A. Section 12 governs a security's own exchange registration, not the broker-dealer itself.
C. Section 15-A is FINRA's own charter as an association, not an individual broker-dealer's registration.
D. Section 23 is a Securities Act provision about registration-statement effectiveness, unrelated to broker-dealer registration.

Unit: SIE outline 1.1.1

Question 51Exam level

What must be true of a body before it counts as a self-regulatory organization on this outline?

How sure are you?

Correct: A. A self-regulatory organization is an industry body, not a government one, given authority under SEC oversight to write and enforce rules for its own members.
B. An SRO is explicitly an industry body, not a government one.
C. SEC oversight is part of the definition, not its absence.
D. SROs are industry-funded, not funded directly by the Treasury.

Unit: SIE outline 1.1.2

Question 52Exam level

Which statutory provision is the hook for FINRA's existence as a registered securities association?

How sure are you?

Correct: C. Exchange Act Section 15A, Registered Securities Associations, is the provision under which FINRA registers with the SEC.
A. Securities Act Section 7 sets what a registration statement must contain, unrelated to an association's own registration.
B. Exchange Act Section 12 governs registration of securities, not of an association.
D. Securities Act Section 23 governs claims of SEC approval, a different subject entirely.

Unit: SIE outline 1.1.2

Question 53Exam level

A U.S.-headquartered company operates a factory in Mexico. In which measure does that factory's output count?

How sure are you?

Correct: B. GNP counts output produced by U.S. residents and companies wherever in the world it happens; this factory counts there, not in U.S. GDP, since GDP stops at the border.
A. GDP counts output produced inside U.S. borders; a Mexican factory is outside them.
C. The two measures draw the line differently on purpose; this factory does not count in both.
D. It does count in Mexico's GDP too, but the question is about the U.S. measures, and GNP is the one that reaches it.

Unit: SIE outline 1.3.3

Question 54Exam level

How many members sit on the Federal Open Market Committee, and how many regularly scheduled meetings does it hold each year, per the Fed's own page?

How sure are you?

Correct: A. The Fed's own page states the FOMC consists of 12 members and holds 8 regularly scheduled meetings a year.
B. 7 is the Board of Governors' own count, not the full FOMC, and 4 understates the meeting count.
C. 19 overstates the FOMC's own stated membership.
D. Correctly states 12 members but overstates the meeting count; the Fed's own page states 8, not 12.

Unit: SIE outline 1.3.1

Question 55Exam level

Which body writes Regulation T, governing credit extended by brokers and dealers?

How sure are you?

Correct: A. Regulation T, 12 CFR 220, is written by the Board of Governors of the Federal Reserve.
B. FINRA enforces margin rules built on Regulation T but does not write the regulation itself.
C. The SEC oversees securities markets broadly, but Regulation T specifically is a Federal Reserve Board regulation.
D. The FOMC directs open market operations, a separate monetary-policy tool from the Board's own regulation-writing.

Unit: SIE outline 1.3.1

Question 56Exam level

The FOMC buys U.S. government securities in the open market. Which sequence follows?

How sure are you?

Correct: A. Paying for the securities credits the selling banks' reserve accounts, so reserves rise, banks lend the surplus, and short-term rates fall.
B. That is the chain for a Fed sale, not a purchase.
C. Keeps the reserve step but reverses the rate; more lendable reserves cannot push borrowing costs up.
D. A purchase adds reserves rather than draining them, contradicting the stem's own action.

Unit: SIE outline 1.3.1

Question 57Exam level

Congress passes legislation cutting federal income tax rates to stimulate demand. This action is:

How sure are you?

Correct: B. Taxation is a fiscal instrument, enacted by Congress and administered by the Treasury.
A. The Federal Reserve holds no taxing power; its levers reach money and credit, not tax law.
C. An open market operation is the Fed's trading desk buying or selling government securities, which no tax bill involves.
D. A reserve requirement is a ratio the Board of Governors sets on bank deposits, not tax law.

Unit: SIE outline 1.3.1

Question 58Exam level

The Federal Reserve sells government securities in the open market. What happens to the prices of bonds already outstanding?

How sure are you?

Correct: B. A Fed sale drains reserves, contracts the money supply and pushes rates up; a bond paying an older, lower coupon is worth less once new bonds pay more.
A. Rates rise on a sale, not fall.
C. Outstanding bonds reprice continuously in the secondary market; that repricing is the mechanism itself.
D. A sale removes reserves, so the money supply contracts, not expands.

Unit: SIE outline 1.3.1

Question 59Exam level

Which of these rates does the Federal Reserve both set and charge directly?

How sure are you?

Correct: A. The discount rate is set by the Board of Governors and charged directly to banks borrowing at the discount window.
B. The federal funds rate is set between banks; the FOMC only targets a range for it.
C. The prime rate is set by each commercial bank for itself.
D. The discount rate is a direct exception; the Fed both sets and charges it.

Unit: SIE outline 1.3.1

Question 60Exam level

Which of the three agency issuers is a federal agency backed by the full faith and credit of the U.S. government?

How sure are you?

Correct: A. Ginnie Mae is a federal agency, and its paper carries full faith and credit.
B. Fannie Mae is a government-sponsored enterprise that guarantees its own paper, not backed by full faith and credit.
C. Freddie Mac sits in the same row as Fannie Mae, a sponsored enterprise, not full faith and credit.
D. The TVA is a real federal agency, but the manual names it specifically as one that carries no such backing.

Unit: SIE outline 2.1.2

Question 61Exam level

A pass-through security and a collateralized mortgage obligation both pool mortgages. How do they differ in how they pay investors?

How sure are you?

Correct: A. A pass-through pays every holder the same pro rata share; a CMO cuts the cash flows into classes and retires early classes first.
B. Reverses the two structures.
C. Only the pass-through is pro rata; the CMO sorts cash flows into classes.
D. Only the CMO pays strictly by class; the pass-through is pro rata.

Unit: SIE outline 2.1.2

Question 62Exam level

Long-term mortgage rates fall sharply. What happens to prepayments on an outstanding mortgage-backed pass-through, and why?

How sure are you?

Correct: A. Falling rates make refinancing into a cheaper loan attractive, so principal is repaid early more often.
B. Falling rates make refinancing more attractive, speeding prepayments, not slowing them.
C. No servicer-forced call mechanism exists; the borrower, not the servicer, decides to prepay.
D. Prepayment speed is directly rate-sensitive, per the manual's own prepayment-option framing.

Unit: SIE outline 2.1.2

Question 63Exam level

Are agency mortgage-backed securities exempt from SEC registration, and does that exemption mean they carry no risk?

How sure are you?

Correct: A. Agency securities are exempt from SEC registration, but the exemption does not mean guaranteed or riskless; the prepayment option remains a real risk.
B. The registration exemption says nothing about credit or prepayment risk; the two are separate.
C. Agency securities are in fact exempt from SEC registration.
D. The registration exemption applies to federally related institutions and government-sponsored paper alike, not to Ginnie Mae alone.

Unit: SIE outline 2.1.2

Question 64Exam level

A corporation is wound up. After secured bondholders and general creditors (debenture holders) are paid, who is asked next, before either class of stockholder?

How sure are you?

Correct: A. The claim queue runs secured, debenture, subordinated debenture, preferred, common; subordinated debenture holders stand behind debenture holders but ahead of both classes of stockholder.
B. Common stockholders are last in the queue, after both classes of debt and preferred stock.
C. Preferred stockholders come after subordinated debenture holders, not before them.
D. Subordinated debenture holders sit between general creditors and preferred stockholders; they are not skipped.

Unit: SIE outline 2.1.2

Question 65Exam level

Two bonds from the same issuer, same maturity: one is secured by a first mortgage, the other is an unsecured debenture. Which pays the higher yield?

How sure are you?

Correct: A. Secured bonds yield less than comparable unsecured bonds; safety costs coupon.
B. The mortgage bond's added security is exactly what lets the issuer pay it less, not more.
C. The security pledge itself changes the yield, even with an identical issuer and maturity.
D. This contradicts the stated rule that greater security costs yield.

Unit: SIE outline 2.1.2

Question 66Exam level

The dollar weakens against the euro. Which U.S. group is helped?

How sure are you?

Correct: B. A weak dollar makes American goods cheaper for foreign buyers, which helps U.S. exporters.
A. A weak dollar makes imports cost more for U.S. buyers, hurting importers, not helping them.
C. A weak dollar makes European travel more expensive for U.S. travelers, not less.
D. Exchange rates directly affect the price at which trade settles.

Unit: SIE outline 1.3.3

Question 67Exam level

A bond is callable at the issuer's option. Market rates fall well below the bond's coupon. What is the investor's likely experience, and who controls the timing?

How sure are you?

Correct: A. The issuer holds the call and exercises it when rates have fallen; the investor has no say in the timing.
B. The call is the issuer's own right; the investor never controls when a callable bond is called.
C. Falling rates are exactly the condition that makes a call likely, not one that prevents it.
D. A put belongs to a different bond feature entirely, and this stem describes a call, not a put.

Unit: SIE outline 2.1.2

Question 68Exam level

A bond's indenture includes a sinking-fund provision. What does that provision require the issuer to do, and what is the effect on default risk?

How sure are you?

Correct: A. A sinking-fund provision requires the issuer to retire a set portion each year, lowering default risk through the orderly retirement of the issue before maturity.
B. A sinking fund retires the issue gradually over time, not entirely at maturity in one step.
C. A sinking fund retires the issuer's own bonds, not its common shares.
D. A sinking fund retires debt directly; it is not a collateral-posting mechanism.

Unit: SIE outline 2.1.2

Question 69Exam level

Where does the boundary between investment-grade and high-yield ratings sit, per the two major agencies' scales?

How sure are you?

Correct: A. Baa or BBB or better is investment grade; below that line is high yield.
B. A/A sits one full rating category above the actual boundary, overstating where investment grade ends.
C. The boundary is a defined ratings line, not a marketing term.
D. High yield describes a bond with a higher risk of default; it pays more precisely because that risk is higher, not by an unrelated coupon definition.

Unit: SIE outline 2.1.2

Question 70Exam level

A general obligation municipal bond defaults. What may its holders do that a revenue bond's holders generally cannot?

How sure are you?

Correct: A. On default, general obligation bondholders have the right to compel a tax levy or legislative appropriation, a power tied to the issuer's own taxing authority that a revenue bond does not pledge.
B. Forcing a project sale is not the named GO remedy; the remedy runs through the issuer's taxing power, not the physical asset.
C. Municipal bonds are debt, not convertible into equity of a governmental issuer.
D. The FDIC insures bank deposits, not municipal bond defaults.

Unit: SIE outline 2.1.2

Question 71Exam level

A corporation's charter is silent on cumulative voting. How are its directors elected?

How sure are you?

Correct: A. State corporation law's own text opens with 'may,' not 'shall': cumulative voting only applies if the charter itself provides for it, so silence defaults to statutory, one vote per share per seat.
B. Cumulative voting is never automatic; it requires an express charter provision.
C. Shareholders cannot adopt cumulative voting by a floor vote alone; it must be written into the charter.
D. Reverses the statute; the default is statutory voting unless the charter opts in to cumulative voting, not the other way around.

Unit: SIE outline 2.1.1

Question 72Exam level

An American depositary receipt is issued against a foreign company's stock. Per the SEC's own investor bulletin, how many underlying shares does one ADR represent?

How sure are you?

Correct: A. The SEC's own investor bulletin on international investing states each depositary receipt represents one or more shares of a foreign stock, or several, or a fraction, and the ratio drives the price.
B. The ratio varies by ADR; it is not always one-to-one.
C. No fixed 10-share ratio applies across ADRs generally.
D. An ADR represents an underlying share count (or fraction), not a bare dollar amount.

Unit: SIE outline 2.1.1

Question 73Exam level

A corporation's charter says nothing about pre-emptive rights. May an existing shareholder demand a pro rata right to buy into a new stock issue before it goes to the public?

How sure are you?

Correct: A. State corporation law's own text states no shareholder has a pre-emptive right unless it is expressly granted in the charter; silence is a denial, not a gap.
B. Reverses the statute; silence is a denial, not a presumption in the shareholder's favor.
C. Pre-emptive rights are a state corporate-law matter tied to the charter, not a federal securities-law entitlement.
D. Pre-emptive rights are not abolished; they simply require an express charter grant to exist.

Unit: SIE outline 2.1.1

Question 74Exam level

A corporation holds 50,000 of its own previously issued shares as treasury stock. What is true of those shares at the corporation's next shareholder vote?

How sure are you?

Correct: A. State corporation law's own text says treasury shares shall neither be entitled to vote nor be counted for quorum purposes.
B. Treasury shares carry no vote at all, unlike ordinary outstanding shares.
C. The statute denies them both the vote and the quorum count, not one alone.
D. The statute grants the board no power to selectively enable a treasury share's vote.

Unit: SIE outline 2.1.1

Question 75Exam level

A board of directors wants to issue more shares than its charter currently authorizes. What must happen first?

How sure are you?

Correct: A. Directors may issue shares only up to the amount authorized in the certificate of incorporation; raising that ceiling means changing the charter.
B. The SEC approves nothing; it reviews registration statements, not a corporation's own share-authorization ceiling.
C. Buying back treasury shares changes the treasury count, not the authorized ceiling.
D. The board's own authority to issue shares is capped at the charter's authorized amount.

Unit: SIE outline 2.1.1

Question 76Exam level

An individual buys shares of a reporting company's stock in an unregistered, private transaction. Under Rule 144, how long must she hold them before reselling?

How sure are you?

Correct: A. Rule 144(d) sets a six-month holding period where the issuer is subject to Exchange Act reporting requirements.
B. Three months appears nowhere in Rule 144's holding-period text.
C. One year is the period for a non-reporting issuer's securities, not a reporting one.
D. Two years is not a period Rule 144 sets for either type of issuer.

Unit: SIE outline 2.1.1

Question 77Exam level

The same investor instead buys restricted shares of a company that does not file reports under the Exchange Act. How long must she hold them before reselling under Rule 144?

How sure are you?

Correct: A. Rule 144(d) sets a one-year holding period where the issuer is not a reporting company.
B. Six months is the shorter period that applies only to a reporting issuer's securities.
C. Ninety days appears nowhere in Rule 144's holding-period text.
D. A non-reporting issuer's restricted shares carry the longer period, not an absent one.

Unit: SIE outline 2.1.1

Question 78Exam level

An affiliate of an issuer wants to sell shares under Rule 144's volume limitation. Which amount may she sell in a three-month period?

How sure are you?

Correct: A. Rule 144(e) sets the limit as the greatest of 1% of the class outstanding or the average weekly reported trading volume over the preceding four weeks.
B. The rule allows the greater of the two tests, not a flat 1% regardless of the other figure.
C. The rule uses the greater, not the lesser, of the two tests.
D. No flat 5% figure appears in Rule 144's volume limitation.

Unit: SIE outline 2.1.1

Question 79Exam level

A company officer who directly controls the issuer buys additional shares of her own company on the open market. What has she acquired, under Rule 144's own vocabulary?

How sure are you?

Correct: A. Rule 144 defines an affiliate as a person who controls, is controlled by, or is under common control with the issuer; ordinary shares bought openly by an affiliate are control stock.
B. 'Restricted' describes shares acquired in an unregistered private sale; these were bought openly on the market.
C. Treasury stock belongs to the corporation itself, not to an individual officer.
D. These shares were registered when originally issued; they are not unregistered.

Unit: SIE outline 2.1.1

Question 80Exam level

A company issues certificates letting the holder buy stock at $18 while the market price is $20, expiring in 30 days. What are these certificates?

How sure are you?

Correct: A. Rights are struck below the current market price and are short-lived, living for weeks, exactly the pattern here.
B. Warrants are struck above the current market price and run for years, the opposite of both signals in this stem.
C. Convertible preferred would convert an existing security rather than let the holder buy new shares at a set price.
D. A depositary receipt represents foreign shares and carries no exercise price at all.

Unit: SIE outline 2.1.1

Finish and score it

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