SIE Exam Last-Minute Review (2026): Key Topics, Formulas & Dump Sheet

Key Facts

• The SIE exam has 75 scored items with a 1-hour-45-minute time limit set by FINRA.
• You need a scaled score of 70 to pass the SIE exam, and FINRA does not publish a fixed number of correct answers.
• The SIE exam fee is $100, up from \$80 in 2025; results stay valid for 4 years (FINRA).
• Understanding Products and Their Risks is the largest SIE section at 44% (33 of 75 scored questions) per the FINRA outline.
• Current Yield = Annual Interest divided by Market Price is the most commonly tested SIE bond formula.
• Options breakevens: call breakeven = strike + premium; put breakeven = strike - premium.
• Reg T requires 50% initial margin; FINRA maintenance is 25% for long positions and 30% for short positions.
• SIPC protects against broker-dealer failure up to $500K total, with a $250K cash sublimit - not market losses.
• US stocks, corporate bonds, and municipal bonds settle T+1 (trade date plus one business day) since May 2024.
• Interest on qualifying municipal bonds is generally exempt from regular federal income tax, but taxable municipal bonds exist and some private-activity interest is subject to AMT. State exemptions vary by jurisdiction (MSRB).

SIE Exam Last-Minute Review

This is the highest-yield SIE cram sheet - the exact facts, formulas, and traps most likely to appear, organized so you can review the whole exam in your final study hours. Skim it tonight, write the formulas from memory in the morning, and walk in knowing the numbers cold.

SIE exam fast facts (2026)

• Item 2026 Detail
• Scored questions 75
• Time limit 1 hour 45 minutes (105 minutes)
• Passing score 70 on a scaled score (no fixed number correct is published)
• Exam fee $100 (up from $80 in 2025)
• Sponsorship required No - anyone 18+ can take the SIE
• Result validity 4 years
• Provider FINRA (delivered at Prometric / online)

The 5 pretest questions are unmarked and scattered randomly - you cannot tell them apart, so answer every question as if it counts.

The four sections and their weights

More than half of the SIE comes from just two sections. Spend your last hours where the questions are.

• # Section Weight Scored Qs
• 1 Knowledge of Capital Markets ~16% 12
• 2 Understanding Products and Their Risks ~44% 33
• 3 Understanding Trading, Customer Accounts and Prohibited Activities ~31% 23
• 4 Overview of the Regulatory Framework ~9% 7

Takeaway: Products & Risks (44%) plus Trading/Accounts/Prohibited Activities (31%) = 75% of your exam . If you only have an hour left, drill bonds, options, packaged products, risk types, margin, order types, and prohibited practices.

Dump Sheet Formulas

Write these down on your dry-erase board (or scratch paper) in the first minute when the exam begins, before you read a single question.

Bond Yields Current Yield = Annual Interest Market Price \text{Current Yield} = \frac{\text{Annual Interest}}{\text{Market Price}} Current Yield = Market Price Annual Interest ​ Nominal Yield = Annual Interest Par Value (stated rate) \text{Nominal Yield} = \frac{\text{Annual Interest}}{\text{Par Value}} \quad \text{(stated rate)} Nominal Yield = Par Value Annual Interest ​ (stated rate)

• Yield Relationship (discount bond): Coupon Rate < Current Yield < YTM < YTC
• Yield Relationship (premium bond): Coupon Rate > Current Yield > YTM > YTC

Options Breakevens Call Breakeven = Strike Price + Premium \text{Call Breakeven} = \text{Strike Price} + \text{Premium} Call Breakeven = Strike Price + Premium Put Breakeven = Strike Price − Premium \text{Put Breakeven} = \text{Strike Price} - \text{Premium} Put Breakeven = Strike Price − Premium

Tax-Equivalent Yield TEY = Municipal Yield 1 − Tax Bracket \text{TEY} = \frac{\text{Municipal Yield}}{1 - \text{Tax Bracket}} TEY = 1 − Tax Bracket Municipal Yield ​

Margin Formulas Reg T Initial Requirement = 50 % of purchase price \text{Reg T Initial Requirement} = 50\% \text{ of purchase price} Reg T Initial Requirement = 50% of purchase price Minimum Maintenance (Long) = 25 % of market value \text{Minimum Maintenance (Long)} = 25\% \text{ of market value} Minimum Maintenance (Long) = 25% of market value Minimum Maintenance (Short) = 30 % of market value \text{Minimum Maintenance (Short)} = 30\% \text{ of market value} Minimum Maintenance (Short) = 30% of market value

Key Numbers to Memorize

• Concept Value
• Rule 144 Holding Period 6 months (reporting issuer); 1 year (non-reporting)
• Reg T Margin Requirement 50%
• Long Maintenance Margin 25%
• Short Maintenance Margin 30%
• Reg D Accredited Income $200K individual / $300K joint
• Reg D Accredited Net Worth $1 million (excl. home)
• SIPC Coverage $500K total / $250K cash
• Options Contract 100 shares
• Corporate Bond Par $1,000
• Municipal Bond Par $5,000

Rule 144 and Reg D figures: 17 CFR 230.144 and 17 CFR 230.501 , checked 2026-10-23.

• Bond Yields and Pricing
• The Seesaw Relationship

When interest rates GO UP:

• Bond prices go DOWN
• Current yield goes UP
• This is interest rate risk

When interest rates GO DOWN:

• Bond prices go UP
• Current yield goes DOWN
• Types of Bond Yields

• Yield Type Formula What It Measures
• Nominal/Coupon Yield Annual Interest ÷ Par Value Stated interest rate
• Current Yield Annual Interest ÷ Market Price Income return only
• Yield to Maturity Includes interest + capital gain/loss Total return if held to maturity
• Yield to Call Same as YTM but to call date Total return if called early
• Bond Price vs. Par Value

• Trading At Price vs. Par Yield Relationship
• Premium Above $1,000 Coupon > Current > YTM > YTC
• Par At $1,000 All yields equal
• Discount Below $1,000 Coupon < Current < YTM < YTC
• Bond Characteristics by Type

• Bond Type Par Value Interest Payment Tax Treatment
• Corporate $1,000 Semi-annual Fully taxable
• Municipal $5,000 Semi-annual Often exempt from regular federal income tax; taxable issues exist
• Treasury $1,000 Semi-annual (notes/bonds) State tax-exempt
• T-Bills $1,000 Discount (no coupon) State tax-exempt
• Municipal Bond Tax Treatment

Federal tax: Interest on qualifying issues is generally exempt from regular federal income tax; taxable municipal issues also exist

State tax: Rules vary; many states exempt residents' in-state municipal interest, but the applicable state and issue must be checked

• AMT: Interest on some private activity bonds may be an AMT preference item
• Capital gains: Generally taxable; an interest exemption does not make sale gains exempt

Sources checked October 24, 2026: FINRA SIE exam standard and MSRB municipal bond tax treatment .

• Options Basics
• The Four Basic Positions

• Position Right/Obligation Outlook Max Gain Max Loss
• Long Call Right to BUY Bullish Unlimited Premium
• Short Call Obligation to SELL Bearish Premium Unlimited
• Long Put Right to SELL Bearish Strike - Premium Premium
• Short Put Obligation to BUY Bullish Premium Strike - Premium
• Key Options Concepts
• "Call Up, Put Down"
• Call buyers profit when stock goes UP
• Put buyers profit when stock goes DOWN
• Buyers vs. Writers
• Buyers pay premium → have RIGHTS
• Writers receive premium → have OBLIGATIONS
• Options Terminology

• Term Definition
• In the money (ITM) Option has intrinsic value
• At the money (ATM) Strike = market price
• Out of the money (OTM) Option has no intrinsic value
• Intrinsic value Real value if exercised now
• Time value Premium - Intrinsic value
• Exercise Using the option right
• Assignment Writer must fulfill obligation
• When Options Are In/Out of the Money

• Option In the Money When Out of the Money When
• Call Market > Strike Market < Strike
• Put Market < Strike Market > Strike
• Types of Risk
• Systematic Risk (Market Risk)

Cannot be diversified away - affects entire market. Measured by beta .

• Risk Type Definition Example
• Interest Rate Risk Bond prices fall when rates rise Fed raises rates
• Inflation/Purchasing Power Risk Returns don't keep pace with inflation 3% return, 4% inflation
• Market Risk Overall market decline Market crash
• Currency/Exchange Rate Risk Foreign exchange fluctuations Dollar weakens
• Reinvestment Risk Must reinvest at lower rates Rates fall when bond matures
• Non-Systematic Risk (Unsystematic Risk)

Can be diversified away - affects specific companies/sectors.

• Risk Type Definition Example
• Business/Operating Risk Company operational issues Product recall
• Financial/Credit Risk Company debt problems Default risk
• Regulatory Risk Government policy changes New regulations
• Political Risk Foreign government actions Nationalization
• Liquidity Risk Can't sell quickly at fair price Thinly traded stock
• Risk Measurements

• Metric Measures Key Point
• Beta Systematic risk Beta = 1 means moves with market
• Alpha Performance vs. benchmark Positive alpha = outperformance
• Standard Deviation Total volatility Higher = more volatile
• Order Types and Trade Execution
• Basic Order Types

• Order Type Definition When to Use
• Market Order Execute immediately at best available price Want guaranteed execution
• Limit Order Execute at specified price or better Want price control
• Stop Order Becomes market order when stop price reached Limit losses or protect gains
• Stop-Limit Order Becomes limit order when stop price reached Control price but may not execute
• Buy vs. Sell Orders

• Order Limit Stop
• Buy At or below limit price Above current price (breakout)
• Sell At or above limit price Below current price (stop loss)
• Time in Force

• Designation Meaning
• Day Order Expires at end of trading day
• GTC (Good Till Canceled) Remains until executed or canceled
• IOC (Immediate or Cancel) Execute immediately or cancel
• AON (All or None) Execute entire order or nothing
• FOK (Fill or Kill) Execute entire order immediately or cancel
• Trade Settlement

• Security Type Settlement
• Stocks, Corporate Bonds, Munis T+1 (trade date + 1 business day)
• Government Securities T+1
• Options T+1
• Customer Accounts
• Account Types

• Account Type Characteristics
• Cash Account Pay in full, no borrowing
• Margin Account Borrow from broker, pay interest
• Discretionary Broker can make trades without prior approval
• Non-Discretionary Customer approves each trade
• Margin Account Requirements

• Requirement Amount Purpose
• Reg T (Initial) 50% Minimum to open position
• Maintenance (Long) 25% Minimum equity to maintain
• Maintenance (Short) 30% Higher due to unlimited risk
• Margin Call Example
• Buy $10,000 stock on margin
• Initial requirement: $5,000 (50%)
• Borrowed: $5,000

If stock drops to $6,000:

• Equity = $6,000 - $5,000 = $1,000
• Required = $6,000 × 25% = $1,500
• Margin call for $500
• Account Documentation Requirements

• Document Purpose
• New Account Form Customer info, investment objectives
• Customer Agreement Terms and conditions
• Margin Agreement If using margin (hypothecation, loan consent)
• Options Agreement Required before trading options
• Suitability and Know Your Customer (KYC)

Suitability factors:

• Investment objectives (growth, income, speculation, preservation)
• Risk tolerance
• Time horizon
• Liquidity needs
• Tax status
• Financial situation
• Investment experience
• SIPC Protection
• What SIPC Covers

• Coverage Amount
• Total $500,000 per customer
• Cash $250,000 maximum
• Securities Included in $500K total
• What SIPC Does NOT Cover
• Losses from market decline
• Commodity futures
• Foreign exchange
• Investment contracts (annuities, limited partnerships) not registered with SEC
• Bad investment advice
• SIPC vs. FDIC

• SIPC FDIC
• Protects Brokerage accounts Bank deposits
• Against Broker-dealer failure Bank failure
• Coverage $500K / $250K cash $250K per depositor
• NOT Market losses Market losses
• Investment Products
• Investment Company Types

• Type Shares NAV Trading
• Open-End (Mutual Fund) Unlimited, redeemable Priced at NAV Once daily (4 PM ET)
• Closed-End Fund Fixed, not redeemable Trade at premium/discount Exchange-traded
• ETF Creation units Trade at/near NAV Exchange-traded
• UIT Fixed, redeemable NAV-based Not managed, self-liquidating
• Mutual Fund Share Classes

• Class Sales Charge 12b-1 Fee Best For
• A Shares Front-end load Lower Long-term, large investments
• B Shares Back-end (CDSC) Higher Declining charge over time
• C Shares Level load Highest Short-term (1-3 years)
• No-Load None None or low Cost-conscious investors
• Mutual Fund Fees

• Fee Description
• Sales Load Commission (front or back)
• 12b-1 Fee Marketing/distribution (max 0.75%)
• Management Fee Portfolio manager compensation
• Expense Ratio Total annual operating costs
• Common Stock vs. Preferred Stock

• Feature Common Stock Preferred Stock
• Voting Rights Yes Usually no
• Dividend Variable, not guaranteed Fixed, priority
• Growth Potential Higher Lower
• Price Volatility Higher Lower (like bonds)
• Bankruptcy Priority Last After bonds, before common
• Equity Securities Features

• Security Key Characteristics
• ADRs Foreign stocks trading in US, dollar-denominated
• Rights Short-term, below market price, existing shareholders
• Warrants Long-term, above market price, often with bonds
• REITs Must distribute 90% of income, real estate exposure
• Money Market Securities

• Security Issuer Maturity Key Feature
• T-Bills US Treasury 4, 13, 26, 52 weeks Safest, discount securities
• Commercial Paper Corporations Max 270 days Short-term corporate borrowing
• Banker's Acceptances Banks 1-180 days International trade financing
• Negotiable CDs Banks Various FDIC insured up to $250K
• Repos Dealers Overnight to weeks Collateralized by securities
• Annuities
• Fixed vs. Variable Annuities

• Feature Fixed Annuity Variable Annuity
• Returns Guaranteed rate Market-based
• Risk Insurance company Contract owner
• Investment General account Separate account
• Regulator State insurance SEC and state
• Inflation Protection No Potential
• Annuity Phases

• Phase What Happens
• Accumulation Money grows tax-deferred
• Annuitization Convert to income stream
• Payout/Distribution Receive payments
• Annuity Payout Options

• Option Payments Death Benefit
• Life Only Highest payment None - payments stop at death
• Life with Period Certain Lower payment Beneficiary receives remaining period
• Joint and Survivor Lower payment Continues to surviving spouse
• Variable Annuity Fees

• Fee Description
• Mortality & Expense (M&E) Insurance guarantee costs
• Administrative Fees Recordkeeping
• Surrender Charges Early withdrawal penalty
• Subaccount Expenses Like mutual fund expenses
• Retirement Accounts
• Traditional IRA vs. Roth IRA

• Feature Traditional IRA Roth IRA
• Contributions Pre-tax (deductible) After-tax
• Growth Tax-deferred Tax-free
• Withdrawals Taxed as income Tax-free (if qualified)
• RMDs Required at 73 None during owner's lifetime
• Early Withdrawal 10% penalty + taxes Contributions anytime; earnings penalized
• Income Limits Deduction phases out Contribution phases out
• Employer-Sponsored Plans

• Plan Type Key Features
• 401(k) Defined contribution Employee deferrals, employer match possible
• 403(b) Defined contribution Nonprofits, schools, hospitals
• 457 Deferred compensation Government and nonprofits
• Pension Defined benefit Employer promises specific retirement benefit
• Profit Sharing Defined contribution Employer contributes based on profits
• Qualified Plan Characteristics
• Tax-deductible contributions
• Tax-deferred growth
• Must follow ERISA rules
• Vesting schedules for employer contributions
• 10% penalty for early withdrawal (before 59½)
• RMDs at age 73
• Regulatory Bodies
• Who Regulates What

• Regulator Jurisdiction
• SEC Securities markets, public companies, investment advisers ($110M+ AUM; $100M-$110M by election)
• FINRA Broker-dealers and registered representatives
• MSRB Municipal securities (rules only - no enforcement)
• State Regulators Investment advisers (<$100M AUM), agents, state securities
• Federal Reserve Margin requirements (Reg T)
• OCC Options clearing
• Key Securities Laws

• Law Year Purpose
• Securities Act 1933 New issue registration, prospectus requirement
• Securities Exchange Act 1934 Secondary market regulation, created SEC
• Investment Company Act 1940 Mutual fund regulation
• Investment Advisers Act 1940 Investment adviser regulation
• FINRA Rules
• Not a government agency - Self-Regulatory Organization (SRO)
• Registers and tests broker-dealer representatives
• Enforces rules on broker-dealers
• Operates BrokerCheck for public
• SEC vs. FINRA Jurisdiction

• Issue Regulator
• Registered representative conduct FINRA
• Public company disclosure SEC
• Broker-dealer registration Both
• Investment adviser (large) SEC
• Market manipulation SEC
• Prohibited Practices
• Insider Trading
• Trading on material, non-public information
• Illegal for insiders AND tippees
• "Material" = would affect investment decision
• Must disclose or abstain
• Front Running
• Trading ahead of customer's large order
• Using knowledge of pending orders for personal gain
• Market Manipulation

• Practice Description
• Churning Excessive trading to generate commissions
• Painting the Tape Creating false appearance of activity
• Matched Orders/Wash Sales Pre-arranged trades to fake volume
• Marking the Close Trades to artificially affect closing price
• Pump and Dump Inflate price with false info, then sell
• Other Violations

• Practice Description
• Selling Away Selling unapproved securities (private securities transactions)
• Borrowing from Customers Prohibited without firm approval
• Sharing in Accounts Only with approval and proportionate
• Guaranteeing Against Loss Never permitted
• Unauthorized Trading Trading without customer consent
• Primary and Secondary Markets
• Primary Market (New Issues)

• Term Definition
• IPO First public offering of shares
• Underwriter Investment bank bringing issue to market
• Syndicate Group of underwriters sharing risk
• Selling Group Brokers who sell but don't underwrite
• Prospectus Required disclosure document
• Underwriting Types

• Type Risk Bearer Unsold Shares
• Firm Commitment Underwriter Underwriter keeps
• Best Efforts Issuer Returned to issuer
• All or None Issuer Deal canceled if not all sold
• Mini-Max Issuer Minimum must sell or canceled
• Secondary Market
• Trading of already-issued securities
• Proceeds go to selling shareholders (not issuer)
• Exchanges (NYSE, NASDAQ) and OTC markets
• Securities Registration
• Exempt Securities (Don't Need SEC Registration)
• US Government securities (Treasury)
• Municipal bonds
• Bank securities
• Commercial paper (< 270 days)
• Insurance policies and annuities
• Exempt Transactions

• Regulation Description
• Reg D Private placements to accredited investors
• Reg A Small offerings (Tier 1: $20M, Tier 2: $75M)
• Rule 144 Resale of restricted/control stock
• Rule 144A Resale to qualified institutional buyers
• Rule 144 Requirements

Type Holding Period Volume Limits Filing

Restricted Stock (affiliate) 6 months (reporting issuer); 1 year (non-reporting) Yes Form 144 if > 5,000 shares or $50,000 in 3 months

Unrestricted control stock None Yes Form 144 if > 5,000 shares or $50,000 in 3 months

Source: 17 CFR 230.144 , checked 2026-10-23.

• Common Exam Traps
• Trap #1: "EXCEPT" and "NOT" Questions

Read the full question - one word changes everything.

• Trap #2: Current Yield vs. YTM
• Current Yield = Annual Interest ÷ Market Price (income only)
• YTM = Total return including capital gain/loss
• Trap #3: Buyer vs. Writer Rights
• Buyers have RIGHTS (pay premium)
• Writers have OBLIGATIONS (receive premium)
• Trap #4: Municipal Bond Taxation
• Federal tax: Qualifying municipal interest is generally exempt from regular federal tax; taxable issues exist
• State tax: Exemptions depend on the state, investor and issue; in-state residence is not a universal rule
• Capital gains: Still taxable
• Trap #5: SEC vs. FINRA
• Registered representative issues → FINRA
• Public company disclosure → SEC
• Trap #6: SIPC Coverage
• Protects against broker failure, NOT market losses
• $500K total, $250K cash limit
• Trap #7: Systematic vs. Unsystematic Risk
• Systematic: Cannot diversify away (interest rate, inflation, market)
• Unsystematic: Can diversify away (business, financial)
• Trap #8: Margin Maintenance
• Long positions: 25% maintenance
• Short positions: 30% maintenance (higher risk)
• Trap #9: Settlement Is Now T+1

US stocks, corporate/municipal bonds, and options all settle T+1 (since May 2024).

Older study materials say T+2 or T+3 - those are outdated. FINRA lists stocks, bonds, options, municipal securities, ETFs and U.S. government securities among T+1 trades, so the default answer on the SIE is T+1 .

Trap #10: Rights vs. Warrants

Rights: short-term, exercise price below market, given to existing shareholders.

• Warrants: long-term, exercise price above market, often attached to bonds as a "sweetener."
• Last-Day and Test-Morning Checklist
• Night before

Review this dump sheet and the four section weights - do not learn new topics now.

Take one short timed quiz to stay sharp, then stop. Cramming new material lowers scores.

Lay out one valid, unexpired government-issued photo ID with your signature, in the exact name you scheduled under; confirm your appointment time and location (or online check-in steps).

Sleep. A rested brain beats two extra hours of review on an exam that needs a scaled 70.

Test morning

Eat something; bring water if allowed.

Arrive 30 minutes early (Prometric) or start online check-in early.

In the first minute, brain-dump your formulas: current yield, breakevens, TEY, margin %, SIPC limits, accredited-investor numbers.

During the exam

105 minutes / 75 scored questions = about 80 seconds each - move steadily.

Flag and skip anything that takes more than ~90 seconds; come back later.

Watch for EXCEPT / NOT / LEAST - they flip the answer.

Eliminate two obviously wrong choices first, then decide. Never leave a question blank; there is no penalty for guessing.

The pass mark is a scaled score of 70, not a perfect score - you can miss a fair number of questions and still pass. Don't panic over a few hard questions.

Keep Drilling Until Test Time

Reading a cram sheet builds recognition; answering questions builds recall - and recall is what the exam tests. Spend your remaining time on realistic questions, not re-reading notes.

Free SIE practice test - hundreds of exam-style questions with full explanations, no signup. Drill the weak sections this sheet exposed.

SIE study guide - deeper topic pages if a concept here didn't click.

Use the AI tutor below to quiz yourself on bonds, options, margin, and risk, or to explain any answer you missed - free members get 10 AI sessions a day.