Pangolin Edge Pangolin Edge

Practice questions · Domain

Trading & Accounts SIE Practice Questions

Trading & Accounts

Trading mechanics, T+1 settlement, margin, and customer account rules tested on the FINRA SIE.

Last checked against FINRA

No signup. No email. Full explanations included.

What this domain covers

Trading, customer accounts, and prohibited activities make up roughly 31% of the SIE. Expect questions on order types and behavior, T+1 settlement and the modern ex-dividend timing, Regulation T initial margin, cash vs margin accounts, joint and custodial account rules, and the basic customer information required at account opening.

Sample questions

Question 1. A customer places a market order to buy 100 shares of XYZ. The current quote is $25.10 bid / $25.15 ask, and this is the NBBO. The customer should expect to execute at approximately:

  1. $25.10
  2. $25.125 (the midpoint)
  3. $25.15
  4. Any price within the spread, at the broker's discretion
Show answer and explanation

Correct answer: C. A market buy order fills at the ask; a market sell order fills at the bid. Best-execution rules require the broker to seek the most favorable terms reasonably available, but the customer is not entitled to midpoint pricing on a standard retail market order.

Question 2. An investor buys 100 shares of ABC regular-way on a Monday with no intervening holidays. Under current settlement rules, when does the trade settle?

  1. The same day (Monday)
  2. Tuesday
  3. Wednesday
  4. Thursday
Show answer and explanation

Correct answer: B. Under T+1 settlement (effective May 2024), regular-way equity trades settle one business day after the trade date. A Monday trade settles Tuesday.

Question 3. Under T+1 settlement, what is the relationship between the ex-dividend date and the record date?

  1. The ex-dividend date is two business days before the record date
  2. The ex-dividend date is one business day before the record date
  3. The ex-dividend date and the record date fall on the same business day
  4. The ex-dividend date is one business day after the record date
Show answer and explanation

Correct answer: C. Under T+1 settlement, the ex-dividend date and the record date are the same business day. A buyer who purchases shares before the ex-date settles on the record date and receives the dividend; a buyer on or after the ex-date does not.

Question 4. Under Federal Reserve Regulation T, what is the minimum initial margin requirement for a long purchase of marginable equity securities?

  1. 25%
  2. 50%
  3. 75%
  4. 100%
Show answer and explanation

Correct answer: B. Regulation T, set by the Federal Reserve Board, requires an initial deposit of at least 50% of the purchase price on marginable equities. FINRA's 25% maintenance margin is a separate, ongoing requirement that applies after the trade.

Question 5. A parent opens a UTMA custodial account for a minor child. Which statement most accurately describes the account?

  1. The parent remains the legal owner of the assets until death
  2. Contributions are an irrevocable gift to the minor, who is the legal owner
  3. The parent and the child are joint owners with rights of survivorship
  4. The custodian may use the assets for personal expenses at any time
Show answer and explanation

Correct answer: B. Contributions to a UTMA (or UGMA) account are irrevocable gifts to the minor. The minor is the legal owner; the custodian manages the assets only until the minor reaches the age of majority specified by state law.

Question 6. Under FINRA rules, which of the following is NOT required as part of the basic information collected when opening a new retail brokerage account?

  1. The customer's name, address, and date of birth
  2. The customer's tax identification number
  3. The customer's investment objectives and risk tolerance
  4. The customer's credit score from a major credit bureau
Show answer and explanation

Correct answer: D. Firms must collect identifying information (name, address, DOB, tax ID) plus suitability information (investment objectives, financial situation, risk tolerance). A credit score from a credit bureau is not part of the standard customer account record.

← All SIE practice questions

Practice the other domains

Domain

Capital Markets

Domain

Products & Risks

Domain

Regulatory

Want the full practice exam?

Take the free Pangolin Edge SIE practice exam to test all four domains in one sitting.

Take the free practice exam →