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FINRA SIEFree Securities Industry Essentials practice test
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10 real FINRA SIE practice questions with instant answers and explanations — no account, no credit card, no email. Score yourself, then unlock the full bank of 500 questions whenever you’re ready. The FINRA SIE passing score is 70%.
Which of the following rights is typically granted to common stockholders of a corporation?
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All 10 FINRA SIE questions & answers
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Q1. Which of the following rights is typically granted to common stockholders of a corporation?
Correct answer: A. The right to vote on the election of the board of directors
Common stockholders generally have voting rights for the board of directors; dividends are not guaranteed and their liquidation claim is subordinate to bondholders and preferred stockholders.
Q2. An investor owns cumulative preferred stock. If the issuer skips a dividend payment, what happens to the missed dividend?
Correct answer: B. It accumulates and must be paid before common dividends can be paid
Cumulative preferred stock requires that any missed dividends accumulate as arrears and be paid in full before common stockholders receive any dividend.
Q3. As market interest rates rise, what generally happens to the price of existing fixed-rate corporate bonds?
Correct answer: C. Prices fall
Bond prices and interest rates move inversely; when rates rise, existing lower-coupon bonds become less attractive, so their market prices fall.
Q4. A municipal general obligation (GO) bond is primarily backed by which of the following?
Correct answer: D. The full faith, credit, and taxing power of the issuing municipality
GO bonds are backed by the issuer's taxing authority and general credit, unlike revenue bonds which depend on income from a specific project.
Q5. Treasury bills (T-bills) are sold to investors at a discount and have original maturities of what length?
Correct answer: A. One year or less
T-bills are short-term government securities issued with maturities of one year or less and are sold at a discount from face value.
Q6. The buyer of a call option has which of the following rights?
Correct answer: C. The right to buy the underlying security at the strike price before expiration
A call option gives its buyer the right, but not the obligation, to purchase the underlying security at the strike price on or before expiration.
Q7. Unlike open-end mutual fund shares, ETF shares can be:
Correct answer: D. Bought and sold throughout the trading day at market prices
ETFs trade on exchanges throughout the day at fluctuating market prices, while open-end mutual funds are bought and redeemed once daily at the calculated NAV.
Q8. A money market mutual fund primarily invests in which type of instruments?
Correct answer: A. Short-term, high-quality debt instruments
Money market funds seek stability and liquidity by investing in short-term, high-quality debt instruments such as T-bills and commercial paper.
Q9. An American Depositary Receipt (ADR) allows U.S. investors to do which of the following?
Correct answer: B. Purchase shares of a foreign company that trade on a U.S. exchange
ADRs are U.S.-listed certificates representing shares of a foreign company, allowing U.S. investors to gain exposure without trading on a foreign exchange.
Q10. A convertible bond typically carries a lower coupon rate than a comparable non-convertible bond from the same issuer because:
Correct answer: D. The conversion feature gives the bondholder potential equity upside, which investors value
Because the conversion feature offers the bondholder the potential to participate in stock price appreciation, investors accept a lower coupon in exchange for that added value.
Exam facts and objectives sourced from the official FINRA certification page. Last reviewed June 2026.
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