SIE Securities Exam Questions & Answers 2026 (11–20)

Question 1

Which of the following is the correct order of the four phases of the business cycle?

TheoryPractice · Accepted Answer

Expansion, peak, contraction, trough. The business cycle runs expansion → peak → contraction → trough, then repeats. Recognizing the order helps anticipate economic conditions and their impact on markets.

Question 2

Gross domestic product (GDP) measures:

TheoryPractice · Accepted Answer

The total value of all goods and services produced in a country. GDP is the total market value of all final goods and services produced within a country over a period. It is the broadest measure of economic output and activity.

Question 3

A sustained increase in the general price level of goods and services is known as:

TheoryPractice · Accepted Answer

Inflation. Inflation is a general rise in prices that erodes purchasing power. Deflation is the opposite (falling prices), and disinflation is a slowing rate of inflation.

Question 4

Which examination must most individuals pass as a prerequisite, in combination with a representative-level exam, to become a registered representative?

TheoryPractice · Accepted Answer

The Securities Industry Essentials (SIE) exam. The SIE is a foundational exam covering basic securities industry knowledge. Candidates typically pass the SIE plus a specialized exam (e.g., Series 7) to register as a representative.

Question 5

The lowest point of the business cycle, before the economy begins to recover, is called the:

TheoryPractice · Accepted Answer

Trough. The trough is the bottom of the business cycle, marking the transition from contraction to recovery (expansion). The peak is the high point before a downturn.

Question 6

A custodian in the securities industry is responsible for:

TheoryPractice · Accepted Answer

Safekeeping a client's assets and securities. A custodian (often a bank) holds and safeguards a client's securities and cash, handling settlement and recordkeeping. Custody helps protect customer assets from loss or theft.

Question 7

FINRA's BrokerCheck tool primarily allows the public to:

TheoryPractice · Accepted Answer

Research the background and disciplinary history of brokers and firms. BrokerCheck is a free FINRA tool that lets investors review the professional background, registrations, and disciplinary history of brokers and brokerage firms. It promotes transparency and investor protection.

Question 8

The primary mission of the SEC is to:

TheoryPractice · Accepted Answer

Protect investors and maintain fair, orderly, and efficient markets. The SEC's mission is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. It pursues this through rulemaking, enforcement, and oversight.

Question 9

Which of the following best distinguishes an equity security from a debt security?

TheoryPractice · Accepted Answer

Equity represents ownership in a company, while debt represents a loan to the issuer. Equity (such as common stock) represents ownership in a company, while debt (such as bonds) represents money loaned to the issuer that must be repaid with interest. This is a foundational distinction in capital markets.

Question 10

The FDIC primarily insures which of the following?

TheoryPractice · Accepted Answer

Bank deposits. The FDIC insures deposits at member banks (e.g., checking and savings accounts) up to applicable limits. Securities held at a broker-dealer are protected by SIPC, not the FDIC.

SIE Securities Exam Questions & Answers 2026 (11–20)

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