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Free SIE Exam Practice Questions 2026: 50+ Sample Questions

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Key Facts

  • The SIE exam has 80 questions (75 scored, 5 unscored) in 105 minutes, a pace of about 1.3 minutes per question
  • Investment products make up the largest section at 44% of the exam
  • Practice exams help identify weak areas and build test-taking confidence
  • Current yield = Annual coupon / Market price
  • Reg T requires 50% initial margin for margin accounts

Why Practice Questions Matter

Practice questions are the most effective way to prepare for the SIE exam . They help you:

  • Identify knowledge gaps
  • Get comfortable with question formats
  • Build test-taking stamina
  • Improve time management

The actual SIE exam has 75 scored items with 105 minutes to complete.

  • Sample SIE Questions by Topic
  • Capital Markets (16% of exam)

Question 1: Which of the following is a characteristic of the secondary market?

  • A) Companies raise capital through initial public offerings
  • B) Securities are traded between investors
  • C) Underwriters price new securities
  • D) The SEC approves new stock issuances

Answer: B - The secondary market is where existing securities are traded between investors. The primary market is where new securities are issued.

Question 2: The Federal Reserve conducts open market operations by:

  • A) Setting bank reserve requirements
  • B) Adjusting the discount rate
  • C) Buying and selling government securities
  • D) Regulating margin requirements

Answer: C - Open market operations involve the Fed buying and selling government securities to influence the money supply and interest rates.

Question 3: Which organization operates the NASDAQ stock exchange?

  • A) SEC
  • B) FINRA
  • C) MSRB

D) Nasdaq, Inc.

Answer: D - Nasdaq, Inc. operates the NASDAQ stock exchange. The SEC regulates securities markets, FINRA regulates broker-dealers, and MSRB regulates municipal securities.

Investment Products (44% of exam)

Question 4: A bond with a 6% coupon and a market price of $900 has a current yield of approximately:

  • A) 5.4%
  • B) 6.0%
  • C) 6.67%
  • D) 7.0%
  • Answer: C - Current yield = Annual coupon payment / Market price = $60 / $900 = 6.67%

Question 5: Which of the following is NOT a characteristic of common stock?

  • A) Voting rights
  • B) Guaranteed dividends
  • C) Residual claim on assets
  • D) Preemptive rights

Answer: B - Common stock dividends are not guaranteed. They are declared by the board of directors and can be reduced or eliminated.

Question 6: A mutual fund with an NAV of $20 and offering price of $21.20 is a:

  • A) No-load fund
  • B) Closed-end fund
  • C) Load fund
  • D) Money market fund

Answer: C - The difference between the offering price and NAV represents a sales charge (load). Sales charge = ($21.20 - $20) / $21.20 = 5.66%

Question 7: Which of the following has the LEAST interest rate risk?

  • A) 30-year Treasury bond
  • B) 10-year corporate bond
  • C) 5-year municipal bond
  • D) 90-day Treasury bill

Answer: D - Interest rate risk increases with maturity. The 90-day T-bill has the shortest maturity and therefore the least interest rate risk.

Question 8: An investor purchasing a call option has:

  • A) The obligation to buy the underlying asset
  • B) The right to buy the underlying asset
  • C) The obligation to sell the underlying asset
  • D) The right to sell the underlying asset

Answer: B - A call option gives the buyer the RIGHT (not obligation) to BUY the underlying asset at the strike price.

Question 9: Which type of bond is backed by a specific asset?

  • A) Debenture
  • B) Secured bond
  • C) Subordinated bond
  • D) Income bond

Answer: B - Secured bonds (also called mortgage bonds) are backed by specific collateral. Debentures are unsecured.

Question 10: A 529 plan is primarily used for:

  • A) Retirement savings
  • B) Healthcare expenses
  • C) Education expenses
  • D) Estate planning

Answer: C - 529 plans are tax-advantaged savings plans designed for education expenses. Qualified withdrawals for education are tax-free.

Trading, Customer Accounts and Prohibited Activities (31% of exam)

Question 11: The minimum age to open an individual brokerage account is:

  • A) 18
  • B) 21
  • C) 25
  • D) 30

Answer: A - The legal age of majority (18 in most states) is required to open an individual brokerage account.

Question 12: In a JTWROS account, when one owner dies:

  • A) Their share passes to their estate
  • B) Their share passes to the surviving owner(s)
  • C) The account is frozen pending probate
  • D) A new account must be opened

Answer: B - In Joint Tenants with Rights of Survivorship (JTWROS), the deceased owner's share passes directly to the surviving owner(s), bypassing probate.

Question 13: Regulation T currently sets the initial margin requirement at:

  • A) 25%
  • B) 50%
  • C) 75%
  • D) 100%

Answer: B - Regulation T, set by the Federal Reserve, requires an initial margin of 50% for purchasing securities on margin.

Question 14: Which of the following is NOT a fiduciary account?

  • A) UGMA account
  • B) Trust account
  • C) Individual account
  • D) ERISA account

Answer: C - An individual account is owned by one person without a fiduciary relationship. UGMA, trust, and ERISA accounts all involve fiduciary duties.

Question 15: Anti-money laundering (AML) regulations require firms to:

  • A) Report all cash transactions over $5,000
  • B) Verify customer identity
  • C) Obtain customer Social Security numbers
  • D) Both B and C

Answer: D - AML programs require Customer Identification Programs (CIP) including identity verification and obtaining identifying information like SSN.

Regulations and Ethics (19% of exam)

Question 16: FINRA Rule 2111 requires that recommendations be:

  • A) Approved by a supervisor
  • B) Suitable for the customer
  • C) Documented in writing
  • D) Made only for qualified investors

Answer: B - The suitability rule (Rule 2111) requires that recommendations be suitable based on the customer's investment profile.

Question 17: Which of the following activities would be considered "churning"?

  • A) Recommending diversified investments
  • B) Excessive trading to generate commissions
  • C) Providing unsolicited recommendations
  • D) Selling securities at a loss

Answer: B - Churning is excessive trading in a customer's account primarily to generate commissions, which is prohibited.

Question 18: A registered representative discovers a customer is 72 years old. Under RMD rules, the customer must:

  • A) Begin taking distributions from traditional IRAs
  • B) Convert to a Roth IRA
  • C) Stop making contributions
  • D) Rollover to a 401(k)

Answer: A - Required Minimum Distributions (RMDs) must begin by April 1 following the year the account holder turns 73 (as of 2023, updated from 72).

Question 19: Which agency is the self-regulatory organization (SRO) for broker-dealers?

  • A) SEC
  • B) FINRA
  • C) MSRB
  • D) Federal Reserve

Answer: B - FINRA (Financial Industry Regulatory Authority) is the SRO that regulates broker-dealers and their registered representatives.

Question 20: Under the Securities Act of 1933, which of the following is exempt from registration?

  • A) Common stock IPO
  • B) Municipal bonds
  • C) Corporate bonds
  • D) ADRs

Answer: B - Municipal bonds are exempt securities under the Securities Act of 1933 and do not require SEC registration.

  • More Practice Questions
  • Equity Securities

Question 21: Preferred stock typically offers:

  • A) Voting rights and fixed dividends
  • B) No voting rights and fixed dividends
  • C) Voting rights and variable dividends
  • D) No voting rights and no dividends

Answer: B - Preferred stock typically has no voting rights but receives fixed dividend payments before common stockholders.

Question 22: A stock trading at $50 with earnings per share of $5 has a P/E ratio of:

  • A) 5
  • B) 10
  • C) 50
  • D) 250
  • Answer: B - P/E Ratio = Price / EPS = $50 / $5 = 10
  • Debt Securities

Question 23: As interest rates rise, bond prices generally:

  • A) Rise
  • B) Fall
  • C) Stay the same
  • D) Become more volatile

Answer: B - Bond prices have an inverse relationship with interest rates. When rates rise, existing bond prices fall.

Question 24: Zero-coupon bonds:

  • A) Pay interest monthly
  • B) Are sold at a premium
  • C) Are sold at a discount
  • D) Have no maturity date

Answer: C - Zero-coupon bonds pay no periodic interest and are sold at a deep discount to face value.

Mutual Funds

Question 25: Net Asset Value (NAV) is calculated by:

  • A) Total assets ÷ shares outstanding
  • B) (Total assets - liabilities) ÷ shares outstanding
  • C) Market price × shares outstanding
  • D) Total liabilities ÷ shares outstanding
  • Answer: B - NAV = (Total Assets - Total Liabilities) / Shares Outstanding
  • Tips for Practice
  • Time yourself - Average 1.3 minutes per question
  • Review wrong answers - Understand why each incorrect answer is wrong
  • Track your scores - Aim for 80%+ on practice exams
  • Focus on weak areas - Spend extra time on missed topics
  • Simulate exam conditions - Take full-length practice tests

Ready to Practice More?

These sample questions represent just a fraction of what you'll encounter on the SIE exam. For comprehensive preparation, explore our free SIE exam prep resources with hundreds of practice questions across all topics.