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This is a SIE Exam Lesson 10 Free Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV’. Try it and see how you do if you need help listen to the lesson over.
SIE SIE Exam Lesson 10 Free Quiz
This is a SIE Exam Lesson 10 Free Quiz which is coveringCredit Default Swaps, Adjustable Rate Securities and SPV’s. Try it and see how you do if you need help listen to the lesson over.
Questions covered include
Below are questions based on the previous lesson. Choose the letter of the correct answer.
To take the quiz online, click here.
1. Which of the following are derivative type products?
(Select all that apply.)
A. auction rate securities
B. credit default swaps
C. exchange-traded notes
D. market index-linked CDs
2. The reason you would buy a credit default swap if you are a speculator is you expect the credit worthiness of a company to ___.
A. go up
B. go down
C. be constant
D. be the same as the leading index on the market
3. Credit default swaps are traded ___.
A. on floors
B. on the primary market
C. on the secondary market
D. over-the-counter
4. There is no limit to the number of credit default swaps that can be written on any specific position.
A. True
B. False
5. It is a credit default swap used as a hedge vehicle for a position.
A. covered CDS
B. indexed CDS
C. married CDS
D. naked CDS
6. It is a credit default swap for bonds that you speculate on but do not own.
A. covered CDS
B. indexed CDS
C. married CDS
D. naked CDS
7. How much would you pay for a credit default swap of a $50,000 worth of bonds that has a spread of 25 basis points?
A. $125
B. $200
C. $2,000
D. $12,500
8. In a Dutch auction, a person actually puts back the bond to the issuer.
A. True
B. False
9. It is the lowest rate where there are enough purchasers willing to buy all the auctionable securities at a Dutch auction.
A. auction rate
B. clearing rate
C. interest rate
D. market rate
10. In a Dutch auction, the clearing rate is reset ___.
A. every 7 days
B. every 28 days
C. every 35 days
D. based on whatever is set in the offering circular or official statement
SIE Exam Lesson 10 Free Quiz: Continued
11. In a Dutch auction, bids higher than the clearing rate will be able to buy the bonds.
A. True
B. False
12. Which of the following happens in the case of a failed auction?
(Select all that apply.)
A. There are so many people putting back their bonds but so few people buying them.
B. There is no enough interest that develops in the market.
C. People could not get out of their positions.
D. People hold on to their auction rate securities at the minimum yield that was put in the bond covenant.
13. Which of the following are the risks in auction rate securities?
(Select all that apply.)
A. counterparty risk
B. credit risk
C. marketability risk
D. suitability risk
14. Which of the following is true in a market index-linked CD?
(Select all that apply.)
A. These are CDs with a yield equivalent to a portion of an index.
B. If the market goes up, you will participate equally on how much the upside of the market is.
C. If the market goes down, you are guaranteed that your principal will not fall below par.
D. If the bank issuing the CD goes bankrupt and the CD is not federally insured, you will not get back your principal.
15. If you don’t hold on to a market index-linked CD until maturity, you’re entitled to participate in its upside as long as the CD is FDIC insured.
A. True
B. False
16. Which of the following are risks in a market index-linked CD?
(Select all that apply.)
A. counterparty risk
B. credit risk
C. market risk
D. principal risk
17. In a market index-linked CD, you can only lose principal if the institution issuing the CD goes bankrupt.
A. True
B. False
18. Which of the following are risks in an exchange-traded note?
(Select all that apply.)
A. counterparty risk
B. liquidity risk
C. market risk
D. principal risk
19. Which of the following is true about exchange-traded notes and market index-linked CDs?
A. Exchange-traded notes are taxed at capital gains rate while market index-linked CDs are taxed at interest income tax rate.
B. Exchange-traded notes are taxed at interest income tax rate while market index-linked CDs are taxed at capital gains rate.
C. Both exchange-traded notes and market index-linked CDs are taxed at capital gains rate.
D. Both exchange-traded notes and market index-linked CDs are taxed at interest income tax rate.
20. Which of the following is true in a reverse convertible note?
(Select all that apply.)
A. If the stock goes up, you would participate in the upside of the stock.
B. As long as the stock is trading above the knock-in price, you would get the high interest that was paid on the reverse convertible note.
C. If the stock goes down, you are guaranteed to get out at par.
D. If the financial institution issuing the note goes bankrupt, you will be a creditor of that financial institution.
We hope you did well on this SIE Exam Lesson 10 Free Quiz
Total Course 37 hours 10 Min
37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam
59 Audio Lessons for Securities Industry Essentials Exam
13 Bonus Lessons about the finance industry
Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam
The full course details:
37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam
59 Audio Lessons for Securities Industry Essentials Exam
13 Bonus Lessons about the finance industry
Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam
New Series 7 Exam and SIE Exam details.
All candidates now must now pass both the SIE exam (securities industry essentials exam) as well as the New Top-Off Series 7 Exam. A Series 7 candidate must also have an industry sponsor in order to take the examination to take the SIE Exam the candidate simply needs to be 18 years old and no broker affiliation is needed..
https://www.finra.org/industry/essentials-exam
- “Securities Industry Essentials (SIE) Exam
Available Beginning October 1, 2018
The Securities Industry Essentials (SIE or Essentials) Exam, available beginning October 1, 2018, is a new FINRA exam for prospective securities industry professionals. This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.
Key Features of the Essentials Exam
________________________________________
• The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.
• Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.
• Essentials exam results are valid for four years.
The Essentials Exam at a Glance
________________________________________
Number of Items 75
Format Multiple Choice
Duration 105 minutes
Passing Score 70%
Cost $60”
New Series 7 Exam
The New Series 7 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. The outline is comprised of the four main job functions of a general securities representative. The table below lists the allocation of exam questions for each main job function.
Major Job Functions Percentage of Test Questions Number of Test Questions
(F1) Seeks Business for the Broker-Dealer from Customers and Potential Customers 7% 9
(F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives 9% 11
(F3) Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records 73% 91
(F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions 11% 14
TOTAL 100% 125”
The five job functions of the new Series 7 General Securities Representative Exam will be:
“Seeks business for the broker-dealer through customers and potential customers”
“Evaluates customers’ financial status, financial needs and risk tolerance, and helps them identify their investment objectives”
“Opens accounts, transfers assets and maintains appropriate account records”
“Provides customers with information on investments and makes suitable recommendations”
“Obtains and verifies customer’s purchase and sales instructions, enters orders and follows up”
These five functions of the new series 7 exam are the same or substantially similar to ones on the current Series 7 exam. A notable change from the existing Series 7 exam is the addition of evaluating customer “risk tolerance.”
https://www.finra.org/industry/series7
Here is a link to the table of Contents
Here is what my customers say about my audio lessons
Testimonials
—————————
New Series 7 Exam and SIE Exam details.
FINRA has announced major changes to the Series 7 Exam effective October 1, 2018. With the introduction of the Securities Industries Essentials Exam (SIE Exam) the new series 7 has been pared down to 125 questions from its original 250 questions.
https://www.finra.org/industry/series7
However there is now a prerequisite before taking the new Series 7 Exam all candidates now must have passed the SIE exam (securities industry essentials exam). In addition thing a series 7 candidate must also have an industry sponsor in order to take the examination.
https://www.finra.org/industry/essentials-exam
“Securities Industry Essentials (SIE) Exam
Available Beginning October 1, 2018
The Securities Industry Essentials (SIE or Essentials) Exam, available beginning October 1, 2018, is a new FINRA exam for prospective securities industry professionals. This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.
Key Features of the Essentials Exam
________________________________________
• The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.
• Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.
• Essentials exam results are valid for four years.
The Essentials Exam at a Glance
________________________________________
Number of Items 75
Format Multiple Choice
Duration 105 minutes
Passing Score 70%
Cost $60”
Outline of SIE Exam:
https://www.finra.org/sites/default/files/SIE%20Outline-01.12.18.pdf
https://www.finra.org/industry/series7
https://www.finra.org/sites/default/files/Series_7_Content_Outline.pdf