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FINRA SIE Exam Syllabus Topics:

Topic	Details
Topic 1	Regulatory Entities, Agencies, and Market Participants: This section of the exam measures the skills of Financial Regulatory Analysts and covers the structure, authority, and jurisdiction of key regulatory bodies overseeing financial markets. The SEC's role in enforcing securities regulations is assessed, along with the authority of self-regulatory organizations such as FINRA and MSRB. Candidates must also understand the functions of other financial regulators, including the Department of the Treasury and state regulatory agencies. One key skill evaluated is identifying the jurisdictional scope of different financial regulators.
Topic 2	Market Structure: This section of the exam measures the skills of Equity Market Specialists and covers the classification of financial markets, including the primary, secondary, third, and fourth markets. Candidates must demonstrate knowledge of electronic trading, over-the-counter (OTC) markets, and physical exchanges. One specific skill tested is differentiating between various market types and their operational mechanisms.
Topic 3	Employee Conduct and Reportable Events: This section of the exam measures the skills of Financial Compliance Specialists and covers regulatory expectations regarding employee conduct and disclosure requirements. Candidates must be familiar with Form U4 and Form U5, as well as reporting obligations for outside business activities and political contributions.
Topic 4	Understanding Products and Their Risks: This section of the exam measures the skills of Investment Analysts and examines different financial products and associated risks. Candidates must understand equity securities, including common stock, as well as debt instruments such as Treasury securities and mortgage-backed securities.

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FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q121-Q126):

NEW QUESTION # 121
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. $20.00
B. $21.50
C. $30.00
D. $22.00

Answer: A

Explanation:
The cost basis of a stock represents the purchase price and does not include dividends received. Taxes paid on dividends also do not affect the cost basis.
* Original purchase price per share =$20.00.
* Dividends and taxes on dividends do not adjust the stock's cost basis.
* A is correctbecause the cost basis remains $20.00.
* B,C, andDincorrectly assume that dividends or taxes change the cost basis.

NEW QUESTION # 122
Which of the following statements is true regarding the SEC's characterization of a registration statement that has just been made effective?

A. The SEC has found the information presented to be true and accurate.
B. The SEC has determined that no material information has been omitted.
C. The SEC has not passed judgment on the merits of the security being offered for sale.
D. The SEC has approved the security being offered for sale.

Answer: C

Explanation:
Step by Step Explanation:
* SEC Registration Statements: The SEC reviews registration statements for completeness and compliance but does not judge the merits, approve, or endorse the securities being offered.
* Other Options:
* A, B, and C: Misrepresent the SEC's role in the registration process.
References:
* SEC Bulletin on Registration Statements: SEC Registration Process.

NEW QUESTION # 123
According to FINRA rules, under which of the following circumstances, if any, is a member firm permitted to send gifts to a registered representative of another member firm?

A. When the value of all gifts during a period of one year does not exceed $100
B. Under no circumstances
C. When no single gift exceeds $100 in value and the maximum value of all gifts per year equals $250
D. When no single gift exceeds $100 and there is no limit on the number of gifts

Answer: A

Explanation:
Step by Step Explanation:
* FINRA Rule 3220: This rule limits gifts to $100 per person annually to prevent conflicts of interest.
* Aggregate Limit: There is no provision for exceeding the $100 annual limit, regardless of the number of gifts.
* Purpose: The rule ensures that gifts do not influence decisions or create unethical relationships.
References:
* FINRA Rule 3220 (Influencing or Rewarding Employees of Others): FINRA Rule 3220.

NEW QUESTION # 124
The financial risk that a given security is not readily tradable in the market without impacting the market price is known as:

A. Market risk
B. Credit risk
C. Liquidity risk
D. Prepayment risk

Answer: C

Explanation:
Step by Step Explanation:
* Liquidity Risk: Refers to the difficulty of selling a security quickly without significantly affecting its price. This is common in thinly traded securities or complex instruments.
* Other Risks:
* Credit Risk: Relates to the possibility of default by the issuer.
* Market Risk: Pertains to overall price changes due to market conditions.
* Prepayment Risk: Associated with mortgage-backed securities and early repayment of loans.
References:
* SEC Investor Bulletin on Risks: SEC Risk Guidance.

NEW QUESTION # 125
A customer purchases $3,000 of XYZ, which settles today in a margin account. The customer has no other positions or balances. According to initial margin requirements, what is the amount of the required deposit?

A. $2,500
B. $1,500
C. $3,000
D. $2,000

Answer: D

Explanation:
Under Federal Reserve Regulation T, customers must deposit at least 50% of the purchase price for margin trades. However, theminimum deposit requirement is $2,000, regardless of the 50% rule, if the account is below this threshold.
* 50% of $3,000 = $1,500.
* Since $1,500 is less than the $2,000 minimum, the customer must deposit the full $2,000.
* B is correctbecause $2,000 is the required minimum deposit.
* Ais incorrect because the $1,500 calculation does not meet the minimum.
* CandDare incorrect because they exceed the minimum deposit requirement.

NEW QUESTION # 126
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Avail [Updated 2025]! FINRA SIE Exam Questions | Alleviate Exam Stress

FINRA SIE Exam Syllabus Topics:

Latest SIE Exam Fee & SIE Sample Test Online

FINRA Securities Industry Essentials Exam (SIE) Sample Questions (Q121-Q126):

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