Most Recent Finra SIE Exam Dumps

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 correct because preferred stock is an equity security.

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

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

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

Step by Step Explanation:

National Securities Clearing Corporation (NSCC): A subsidiary of the Depository Trust & Clearing Corporation (DTCC), the NSCC handles the clearance and settlement of broker-to-broker equity, corporate bond, municipal bond, and UIT transactions.

Incorrect Options:

A: The SEC oversees regulatory compliance but does not settle trades.

B: FINRA is a self-regulatory organization, not a clearing entity.

C: The Federal Reserve manages monetary policy and banking but is not involved in securities settlement.

DTCC Overview of NSCC: DTCC NSCC.

SEC Regulation A provides a registration exemption for smaller public offerings but includes a 'bad actor' disqualification. If certain key parties, such as the issuer, underwriter, or affiliates, have been involved in securities violations, the exemption is forfeited.

B is correct because underwriters are considered essential participants, and their status as bad actors disqualifies the offering.

A, C, and D are incorrect because custodians, transfer agents, and clearing corporations are not included in the 'bad actor' provisions of Regulation A.

Coverdell Education Savings Accounts (ESAs) require that all funds be distributed by the time the beneficiary reaches 30 years old. If the funds are not used for qualified educational expenses, they may be subject to taxes and penalties.

B is correct because funds must be distributed by age 30 unless transferred to another eligible family member.

A is incorrect as age 21 is not relevant for Coverdell ESAs.

C is incorrect because age 59 applies to retirement accounts like IRAs.

D is incorrect because there is a distribution deadline for Coverdell accounts.

An option is considered 'at the money' when the current price of the underlying asset (or index level) equals the option's strike price.

B is correct because the index level equals the strike price.

A is incorrect because 'in the money' requires the option to have intrinsic value (e.g., for a call, the index level must be above the strike price).

C is incorrect because 'out of the money' applies when the index level is below the strike price (for calls) or above it (for puts).

D is incorrect because 'at the money' options have no intrinsic value.