TEAS Practice Exam 4 Welcome to your SIE Practice Quizzes. Note: We designed four (4) sets of practice quizzes for each Domain. each quiz set has 25 questions. Domain 2 (Set 2): Knowledge of Capital Markets. (25 questions) Please click NEXTÂ to start your Free SIE Practice Quizzes right away. Best of Luck! 1. SIE, Knowledge of Capital Markets,SIE In the capital markets, securities such as stocks and bonds can be A) offered by both public and private sectors. B) purchased and sold by individuals only. C) purchased and sold by institutions only. D) offered by the public sector only. None 2. SIE, Knowledge of Capital Markets,SIE If an officer of a bank with the authority to purchase and sell securities on behalf of the bank wants to purchase new issues, which of the following statements is true? A) The officer may not purchase a new issue unless the amount he wishes to purchase is considered small in relation to the total offering. B) The officer may purchase a new issue because anyone is allowed to purchase new issues. C) The officer may not purchase a new issue because he is considered a restricted person. D) The officer may purchase a new issue because no banking rules prohibit it. None 3. SIE, Knowledge of Capital Markets,SIE An officer of a broker-dealer firm would be categorized as a restricted person if that individual attempted to purchase A) a municipal bond in a state where the officer does not reside. B) closed-end funds on the secondary market. C) call or put options on a stock in the secondary market. D) a new issue initial public offering (IPO) at the public offering price. None 4. SIE, Knowledge of Capital Markets,SIE For primary and secondary markets, which of the following is true? A) In the secondary market, securities transactions cannot take place on an exchange. B) In the primary market, securities are purchased from and sold to individual investors. C) In the secondary market, all sales proceeds go to the issuer.V D) In the primary market, securities are sold to the public and the issuer receives the sale proceeds. None 5. SIE, Knowledge of Capital Markets,SIE Public offerings of securities are regulated under A) the Securities Act of 1934. B) Financial Industry Regulatory Authority (FINRA)'s communications with the public rules. C) the Securities Act of 1933. D) the Consumer Protection Act. None 6. SIE, Knowledge of Capital Markets,SIE The XYZ Company is looking to offer shares of its common stock to the public. Which of the following laws enacted by Congress would have the most relevance to the issuance of these securities? A) The Securities Investors Protection Act of 1970 B) The Investment Company Act of 1940 C) The Securities Act of 1933. D) The Trust Indenture Act of 1939 None 7. SIE, Knowledge of Capital Markets,SIE For the primary market, which of the following is true? A) All U.S. exchanges are primary markets where price is determined by supply and demand. B) All U.S. exchanges are primary markets where securities are offered at a public offering price. C) Issuer transactions occur in the primary market, and securities are offered at a public offering price. D) Issuer transactions occur in the primary market, and price is determined by supply and demand. None 8. SIE, Knowledge of Capital Markets,SIE A prospectus displays which of the following? A) A guarantee insuring against loss B) Performance predictions for a minimum of three years C) The Securities and Exchange Commission (SEC) endorsement D) Description of how the proceeds will be used None 9. SIE, Knowledge of Capital Markets,SIE All of the following are restricted persons except A) finders and fiduciaries acting on behalf of the underwriters. B) individual owning 5% of a member firm. C) employees of members. D) portfolio managers. None 10. SIE, Knowledge of Capital Markets,SIE An offering is defined as the sale of a security. Regarding offerings, all of the following are true except A) offerings of stocks can be made to the investing public. B) offerings of bonds can be made to the investing public. C) offerings can be identified by who is selling the securities issuer or investor. D) corporate securities can only be offered in public securities offerings. None 11. SIE, Knowledge of Capital Markets,SIE The ATOP Company is planning to offer shares of both common and preferred stock to the investing public in order to raise operating capital intended to be used for expansion. Which of the following laws enacted by Congress would be the most relevant when issuing these equity securities to the public? A) The Trust Indenture Act of 1939 B) The Investment Company Act of 1940 C) The Securities Investors Protection Act of 1970 D) The Securities Act of 1933 None 12. SIE, Knowledge of Capital Markets,SIE Ensuring that the investing public is fully informed about a security and its issuing company when shares are first sold in the primary market is covered under which of the following federal acts? A) Securities Exchange Act of 1934 B) Uniform Securities Act C) Securities Act of 1933 D) Investment Company Act of 1940 None 13. SIE, Knowledge of Capital Markets,SIE Which of the following acts requires the registration of most new issues? A) The Securities Act of 1933 B) The Securities Investor Protection Act of 1970 C) The Securities Market Improvement Act of 1975 D) The Securities Exchange Act of 1934 None 14. SIE, Knowledge of Capital Markets,SIE A preliminary prospectus is used to solicit A) sales before the effective date. B) sales after the effective date. C) indications of interest before the effective date. D) indications of interest before the registration filing date. None 15. SIE, Knowledge of Capital Markets,SIE A tombstone announcement may contain all of the following except A) names of the underwriters. B) type of security. C) number of shares offered. D) an offer to sell the securities. None 16. SIE, Knowledge of Capital Markets,SIE An indication of interest given by an investor during the cooling-off period is A) an investor's binding commitment to purchase some of the issue after the security comes out of registration. B) an investor's binding commitment to purchase some of the issue immediately. C) an investor's declaration of potential interest in purchasing some of the issue after the security comes out of registration. D) an investor's declaration of potential interest in purchasing some of the issue immediately. None 17. SIE, Knowledge of Capital Markets,SIE Regarding the registration statement filed with the Securities and Exchange Commission (SEC) when new securities are to be issued, all of the following are true except A) a description of how the proceeds raised from the sale will be used must be disclosed. B) the names and addresses of company officers and directors, their salaries, and a five-year business history of each must be shown. C) underwriters may assist the issuer in preparing and filing the registration statement. D) the accuracy and adequacy of the registration documents is the responsibility of the underwriters. None 18. SIE, Knowledge of Capital Markets,SIE The statement "These securities have not been approved or disapproved nor have any representations been made about the accuracy or the adequacy of the information" is A) placed by the issuer in the preliminary prospectus. B) mandated to be in the final prospectus by the Securities and Exchange Commission (SEC). C) is the disclaimer placed by the underwriters in a tombstone advertisement. D) mandated by the Financial Industry Regulatory Authority (FINRA) to be placed in both the preliminary and final prospectus. None 19. SIE, Knowledge of Capital Markets,SIE Which of the following would most closely match the meaning of a red herring? A) A registration statement B) Prospectus C) A tombstone advertisement D) A preliminary prospectus None 20. SIE, Knowledge of Capital Markets,SIE During the cooling off period, underwriters would be allowed to do all of the following except A) distribute a preliminary prospectus. B) take indications of interest. C) advertise the issue. D) publish a tombstone. None 21. SIE, Knowledge of Capital Markets,SIE An investor requests a preliminary prospectus for a new issue. Regarding the document which of the following is true? A) Receipt of it is a commitment that the underwriters will sell securities to the recipient. B) The final price for the securities is published within it. C) It is made available between the registration date and the effective date. D) It can be deemed an offer to sell securities to the public. None 22. SIE, Knowledge of Capital Markets,SIE An underwriter is placing a tombstone advertisement for a company's new issue. A prospective investor might expect to see all of the following information on the advertisement except A) the number of shares to be sold. B) the names of the underwriting members. C) the type of security to be sold (stock or bond). D) the names of the company's officers. None 23. SIE, Knowledge of Capital Markets,SIE Which of the following would be allowed during the cooling off period? A) Distributing a final prospectus B) Taking orders C) Placing a tombstone ad D) Allocating shares to investors None 24. SIE, Knowledge of Capital Markets,SIE During the cooling-off period of a new registration filed with the Securities and Exchange Commission (SEC) A) a red herring may be given to prospective investors. B) indications of interest received are binding on the broker-dealers. C) sales literature may be distributed with the preliminary prospectus. D) tombstone advertisements may not be published. None 25. SIE, Knowledge of Capital Markets,SIE Which of the following will not be found in a final prospectus? A) Statement that the Securities and Exchange Commission (SEC) neither approves nor disapproves of the issue B) Effective date and offering price C) Business plan and use of the proceeds D) Agreement among underwriters None 1 out of 25 Time is Up! Time's up
