FINRA Securities Industry Essentials (SIE) Exam
1. Knowledge of Capital Markets: practice questions
Our FINRA SIE bank has 48 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.
Question 1
What is the main purpose of the secondary market?
- To set interest rates
- To provide liquidity by letting investors trade existing securities
- To raise new money for issuers through initial and follow-on public offerings
- To issue new government bonds
Show the answer
B. To provide liquidity by letting investors trade existing securities — Issuers do not receive money from secondary-market trades.
Question 2
What does a rising unemployment rate usually indicate?
- Strong economic growth
- An economic slowdown
- Falling interest rates set by Congress
- Rising inflation only
Show the answer
B. An economic slowdown — Unemployment is a lagging indicator.
Question 3
When the U.S. dollar weakens against other currencies, what usually happens to U.S. exports?
- They become cheaper for foreign buyers and tend to increase
- They stop completely
- Nothing
- They become more expensive for foreign buyers and tend to decrease over time
Show the answer
A. They become cheaper for foreign buyers and tend to increase — A weaker dollar helps exporters.
Question 4
What is a 'shelf registration'?
- A private placement
- Registering securities that can be sold over a period of time as needed
- A Rule 144 filing
- A registration for a single day
Show the answer
B. Registering securities that can be sold over a period of time as needed — It gives issuers flexibility in timing.
Question 5
What is a 'tender offer'?
- An offer to buy shares directly from shareholders, usually at a premium
- A bond auction
- An offer to sell new shares
- A dividend reinvestment
Show the answer
A. An offer to buy shares directly from shareholders, usually at a premium — Tender offers are often used in takeovers.