Free SIE Exam Practice Test 48

1. Which of the following is correct regarding the selling price of Treasury STRIPS?

2. All but which of the following are correct regarding the IARD?

3. Which of the following describes bonds that have a legal claim to specific assets in the event of default, insolvency, or liquidation?

4. As bond interest rates __________, bond duration __________.

5. If an investor expects a large decrease in the stock market 60 days from today, she can take advantage of the change by doing which of the following?

(1) Buying S&P 500 index calls

(2) Buying S&P 500 index puts

(3) Selling S&P 500 index calls

(4) Selling S&P 500 index puts

6. Which of the following acts regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities? The act is designed to minimize conflicts of interest that arise in these complex operations.

7. Which of the following are established by states to provide other governmental entities (e.g., cities, counties, and school districts) with a short-term investment vehicle to purchase shares or units in an investment portfolio?

8. Which of the following is/are correct regarding open-end mutual funds?

(1) Open-end mutual funds sell at their net asset value (NAV).

(2) Open-end mutual funds have a fixed capital structure.

9. All but which of the following are correct regarding unit investment trusts (UITs)?

10. All but which of the following are types of annuity settlement options?

11. ____ The risk associated with a company's decision to use debt as part of its capital structure.

12. ____ The possibility that a bond issuer will default.

13. ____ The risk inherent in company operations.

14. An investor sold short 25 shares of Omikron stock at a price of $98.50 per share. She also simultaneously placed a "good-till-cancelled, stop 102, limit 107 buy" order. Excluding transaction costs, what is the investor's maximum potential loss?

15. Which of the following regulations sets out certain requirements for lenders, other than securities brokers and dealers, who extend credit secured by margin stock?

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