SIE Securities Industry Essentials Exam Practice Test

Free 5-question sample test with instant feedback. See how ready you are.

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Sample Questions

Question 1

What is the primary distinction between a listed security and an OTC security?

Answer: A listed security trades on a formal exchange (like NYSE or Nasdaq) and must meet the exchange's listing requirements, while an OTC security does not trade on a formal exchange and has no such listing requirements.

Question 2

What type of market is the New York Stock Exchange (NYSE) traditionally known as?

Answer: The NYSE is traditionally known as an auction market, where buyers and sellers submit competing bids and offers and trades occur at a single price that satisfies the most buyers and sellers.

Question 3

What is the role of a Designated Market Maker (DMM) on the NYSE?

Answer: A DMM is assigned to specific stocks and is obligated to maintain fair and orderly markets by quoting bids and offers, facilitating price discovery, and using their own capital to offset temporary supply/demand imbalances.

Question 4

What does it mean for a stock to be 'listed' on an exchange?

Answer: A listed stock has met the exchange's quantitative and qualitative requirements (such as minimum earnings, market cap, and share price) and is approved to trade on that specific exchange.

Question 5

What is a 'floor broker' on a stock exchange?

Answer: A floor broker is an exchange member who executes buy and sell orders on the trading floor on behalf of customers or their firm, acting as an agent in the transaction.