STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

If you are planning to take the Securities Industry Essentials (SIE) Exam, you need to know where the test puts its oompf and emphasis. It is Section 2 on Understanding Products and Their Risks. Section 2 comprises 44 percent of the SIE's questions, or 33 questions out of 75, the largest section of all. In this post, I want to talk about investment risks. Section 2.2 indicates that its questions cover the definition and identification of certain risks. For example, if a customer asks you about capital risk, how would you respond? You should know that capital risk means that a person could lose all or a good chunk of his/her investment capital. So Joe Schlobodnick invests $100,000, his life savings and all his IRA monies, into common stock of XYZ Corp. at $100 per share. Shortly thereafter, XYZ common shares fall to zero! Improbable? Maybe, but happenings like this are not rare. Joe Schlobodnick has lost all of his invested capital. This is capital risk. The SIE exam asks abou...

A big chunk of the 75 questions on the Securities Industry Essentials exam is on understanding trading, customer accounts, and prohibited activity. There are 23 questions comprising 31 percent of all questions. For example, Section 3.1.1 of FINRA's Content Outline includes knowledge of types of orders, such as stop orders, limit orders, and market orders, good-till-cancelled orders, discretionary orders, and solicited/unsolicited orders. If you are new to the securities industry, you probably have a hazy idea of these types of orders. However, hazy is not good enough to pass the SIE exam. You need to achieve a clear bright picture of when to use stop orders, when to use limit orders, etc. We indicate here only a few of the topics covered in the SIE's section on trading, customer accounts, and prohibited activities. Bob Eder's  Study for the Securities Industry Essentials (SIE) Exam   covers the subject in detail.  Study for the Securities Industry Essentials (SIE)...

If you plan to sit for the SIE exam, be aware that you need to be prepared for questions on public and private offerings of securities. For example, you must be able to explain the difference between primary and secondary offerings. A primary offering is an offering of securities or shares that have never been issued before. A secondary offering on the other hand involves securities already owned and now being re-sold. Make sure that you can articulate the difference between types of underwriting by underwriting syndicates. There are two main types—best efforts and firm commitment. And don't go into the test without familiarity with shelf offerings—what they are and why companies find them useful. We indicate here only a few of the topics covered in the SIE's section on Offerings. Bob Eder's  Study for the Securities Industry Essentials (SIE) Exam   covers the subject in detail.  Bob Eder's book,  Study for the Securities Industry Essentials (SIE) Exam , ca...

There are many books on the market dealing with the Securities Industry Essentials (SIE) exam. However, they are not of equal quality or usefulness when it comes to studying and preparing to take the SIE exam. Many just group questions that have been floating around for the Series 7 or Series 6 exam, without first making sure that these questions are appropriate for the SIE exam. So a student could spend hours taking practice questions and wrestling with them, all to little avail, because their subject matter is not asked on the test. Be careful in selecting the right study aid for the SIE exam! For example, Bob Eder J.D. has created a study text that list reference outline numbers prepared by FINRA, the Financial Industry Regulatory Authority, the keeper of the SIE test. For example in Chapter 1, the Securities Markets, Bob Eder talks about Introducing Brokers, and next to this heading, he lists "(1.1.4)," the reference number in FINRA's Content Outline. This is he...

For scoring purposes, the Securities Industry Essentials (SIE) exam is broken into four sections. Section I deals with " Knowledge of the Capital Markets ." There are 12 questions out of 75 dealing with this topic, or 16 percent of the exam. Therefore, you need to know what the capital markets entail. For example, you need to be able to explain the difference between the SEC and the various self-regulatory organizations. When the SIE exam refers to an "SRO," you need to know that it is speaking about a self-regulatory organization, such as FINRA. The SIE asks questions about other securities regulators, such as the North American Securities Administrators Association, or NASAA. Know also about the Securities Investors Protection Corp. and the Federal Reserve, or Fed. We indicate here only a few of the topics covered in the SIE's Knowledge of the Capital Markets. Bob Eder's Study for the Securities Industry Essentials (SIE) Exam covers the subject in d...