SIE PRACTICE TEST (Mometrix)

Question 1

What is considered an institutional investor?

Answer 1

Government entity, an employee benefit plan that meets the requirements of Section 403(b) or Section 457 of the IRC and has at least 100 participants, and a qualified plan, that has at least 100 participants are all considered institutional investors

Question 2

What is considered general communication regarding variable life insurance?

Answer 2

Product identification, liquidity, and claims about guarantees are general considerations

Question 3

When must political contributions be disclosed to the MSRB?

Answer 3

Quarterly

Question 4

A member may not publish a research report regarding a subject company for which the member acted as manager or co-manager of a secondary offering for _________ days following the date of the offering.

Answer 4

10 Calendar days following the offering

Question 5

What is the tentative prospectus circulated by the underwriters of a new stock that is pending approval the SEC?

Answer 5

Red Herring (Preliminary Prospectus)

Question 6

What is the basic exclusion limit on tax-free transfers during life or at death?

Answer 6

12,060,000 as of 2022

Question 7

What is the cost basis of securities given as a gift?

Answer 7

1) Whether the original cost exceeds the donation-date FMV
2) What the final selling price is

Question 8

What is a certificate of deposit?

Answer 8

These CDs are usually purchased by large institutional investors. The minimum denomination is $100,000, which is guaranteed by the issuing bank, and the maturity is 1 year or less.

Question 9

What is a conservative investors?

Answer 9

Someone with a goal of capital preservation

Question 10

What is modern portfolio theory?

Answer 10

• Its a scientific approach to measuring risk
• It involves calculating projected returns of various portfolio combinations
• It is the concept of minimizing risk by combining volatile and price-stable investments in a single portfolio