Free SIE Practice Exam

What’s on the SIE

• Knowledge of Capital Markets16%

  • Regulatory Entities, Agencies and Market Participants

    Introduces the SEC's mission and authority, self-regulatory organizations such as FINRA and MSRB, other regulators (Treasury/IRS, state securities regulators, the Federal Reserve, SIPC, FDIC), and the roles played by market participants like broker-dealers, investment advisers, underwriters, market makers, custodians, transfer agents, and clearing corporations.

  • Market Structure

    Distinguishes the primary market (where new securities are issued) from the secondary market (electronic, OTC, and physical trading), plus the third and fourth markets.

  • Economic Factors

    Covers how Federal Reserve monetary policy and interest-rate tools affect markets, how to read basic business/economic indicators and the business cycle, international factors like GDP/GNP and exchange rates, and core economic theories (e.g., Keynesian, Monetarist).

  • Offerings

    Explains how securities come to market: underwriters and syndicates, public vs. private offerings, IPOs and follow-on offerings, distribution methods, shelf registrations, required offering documents (prospectus, official statement), and related filing exemptions.

• Understanding Products and Their Risks44%

  • Products

    The largest tested area, spanning equity securities (common/preferred stock, rights, warrants, ADRs), debt instruments (Treasuries, agency/corporate/municipal bonds, money-market instruments), options, packaged products (mutual funds, closed-end funds, UITs, variable annuities and their fees/share classes), municipal fund securities (529 plans, LGIPs, ABLE accounts), direct participation programs, REITs, hedge funds, and exchange-traded funds/notes.

  • Investment Risks

    Covers the categories of investment risk (capital, credit, currency, inflation, interest-rate, liquidity, market/systematic, non-systematic, political, prepayment) and common mitigation strategies such as diversification, portfolio rebalancing, and hedging.

• Understanding Trading, Customer Accounts and Prohibited Activities31%

  • Trading, Settlement and Corporate Actions

    Covers order types and trading strategies, how investment returns and dividends are calculated and paid, trade settlement timeframes, and corporate actions (splits, buybacks, tender offers, mergers, proxy voting) and their effect on price and cost basis.

  • Customer Accounts and Compliance Considerations

    Addresses account types and registrations (individual, joint, trust, custodial, retirement), anti-money-laundering obligations (SARs, CTRs, OFAC), books-and-records/privacy requirements (Regulation S-P), and communications-with-the-public and suitability/know-your-customer standards.

  • Prohibited Activities

    Covers market manipulation (e.g., front running, marking the close, pump-and-dump), insider trading and material non-public information, and other violations such as improper use of customer funds, financial exploitation of seniors, unregistered-person activity, and falsifying records.

• Overview of the Regulatory Framework9%

  • SRO Regulatory Requirements for Associated Persons

    Covers SRO qualification and registration requirements for industry professionals, state (blue-sky) registration requirements, and continuing education obligations (Firm Element and Regulatory Element).

  • Employee Conduct and Reportable Events

    Covers Form U4/U5 filing obligations and the consequences of misleading disclosures, plus reportable events such as outside business activities, private securities transactions, political contributions, gifts/gratuities limits, and felony or financial disclosures.