SIE Exam Dumps - Securities Industry Essentials Exam (SIE)

A transfer agent is responsible for maintaining accurate records of shareholder purchases, redemptions, and account balances. They also handle the issuance and cancellation of shares and ensure shareholders receive appropriate distributions.

D is correctbecause maintaining shareholder records is a core duty of a transfer agent.

Ais incorrect because underwriting is the responsibility of a broker-dealer.

Bis incorrect because distributing the prospectus is handled by the fund’s distributor.

Cis incorrect because custody of securities is the role of a custodian, not the transfer agent.

FINRA Rule 3220 prohibits member firms from giving gifts exceeding $100 per individual per year to ensure that gifts do not influence business conduct. The rule applies to gifts given in connection with the firm’s business.

C is correctbecause it adheres to FINRA’s $100 annual limit.

Ais incorrect because the total value of gifts must also not exceed $100 annually.

Bis incorrect as there is no $200 limit.

Dis incorrect as gifts are allowed within the $100 limit.

Step by Step Explanation:

Open-End Mutual Funds: Shares are purchased directly from the fund or its underwriter at the current Net Asset Value (NAV), plus any applicable sales charges.

Custodian: Holds the fund's assets but does not sell shares.

NYSE and Shareholders: Open-end funds do not trade on exchanges or between individual shareholders.

References:

SEC Mutual Fund Basics: SEC Mutual Funds.

When interest rates rise, the price of fixed-rate corporate bonds falls because the bond's coupon payments become less attractive compared to new bonds issued at higher rates.

D is correctas bond prices move inversely to interest rates.

Ais incorrect because bond prices fluctuate with interest rate changes.

Bis incorrect because bond prices revert to par only at maturity.

Cis incorrect because prices do not appreciate when rates rise.

Fundamental analysis focuses on evaluating a company’s financial health and potential for growth by analyzing its financial statements, such as the income statement, balance sheet, and cash flow statement.

C is correctbecause financial statements provide the data necessary for fundamental analysis.

AandBare incorrect because chart patterns and moving averages are tools of technical analysis, not fundamental analysis.

Dis incorrect because resistance and support levels are also part of technical analysis.

Equity securities represent ownership in a company, and preferred stock is a type of equity security that pays dividends and has priority over common stock in liquidation.

A is correctbecause preferred stock is an equity security.

Bis incorrect because commercial paper is a short-term debt security.

Cis incorrect because certificates of deposit (CDs) are fixed-income banking products.

Dis incorrect because exchange-traded notes (ETNs) are unsecured debt securities.

The sales load is calculated as a percentage of the POP, using the formula:Sales load = (POP − NAV) ÷ POP × 100

POP = $15.50, NAV = $14.35.

Sales load = ($15.50 − $14.35) ÷ $15.50 × 100 =8.50%.

C is correctbecause the calculation results in an 8.50% load.

A,B, andDare incorrect due to incorrect calculations.

Step by Step Explanation:

Warrants: Are often issued alongside fixed-income securities, such as bonds, to enhance their appeal to investors. Warrants give the holder the right to purchase company stock at a specific price in the future.

Incorrect Options:

Options: Not typically bundled with fixed-income securities.

Common and Preferred Stock: Usually issued separately, not as part of a package with bonds.

References:

SEC Guide on Warrants: SEC Warrants Information.