FINRA SIE — Fundamentos de la Industria de Valores — Todas las Preguntas

A retail broker-dealer sells shares of a load mutual fund to an individual customer. At what price may the dealer sell under Section 22(d) of the Investment Company Act?

• a.Any price the dealer and the customer negotiate between themselves at the time of sale
• b.The current public offering price described in the prospectus✓
• c.The net asset value less the dealer's discount, as stated in the prospectus
• d.The price the dealer paid for the shares in the market, plus a markup of up to 5%

Section 22(d) bars a dealer from selling a fund share to anyone other than another dealer, the principal underwriter or the issuer except at the current public offering price described in the prospectus. This keeps the price uniform; negotiating a different price breaches the section.15 U.S.C. 80a-22(d)

An actively managed fund has management and administrative fees of 1.5% of assets, and its benchmark returns 9%. What return must the manager's portfolio earn before fees to beat the benchmark?

• a.More than 10.5%✓
• b.More than 9.0%
• c.More than 7.5%
• d.More than 13.5%

Fees reduce what shareholders keep, so a fund charging 1.5% must earn more than the benchmark's 9% plus 1.5%, or 10.5%, before fees to beat it. That handicap is a reason many investors choose lower-cost index funds.FINRA investor education: Mutual funds

A 66-year-old owner of a deferred annuity annuitizes it for a lifetime payout. What should her representative tell her about this decision?

• a.She can reverse it within 3 years and return to the accumulation phase
• b.She keeps the right to withdraw any lump sum on demand
• c.She can change the payout option each year without charge
• d.It is generally irrevocable, because she gives up control of the investment in return for guaranteed income✓

The decision to annuitize is generally irrevocable. The owner gives up control of the investment to the insurer in exchange for a steady income stream, and the insurer takes on the risk that she will outlive her money. Systematic withdrawals or a lump sum keep control but forfeit the guarantee.FINRA investor education: Annuities (payout)

An investor holds a registered index-linked annuity with a 10% buffer. The index it tracks falls 15% over the term. What loss does the investor absorb?

• a.15%, because a buffer protects only against gains being capped and never limits losses
• b.10%, because the buffer is the amount of loss the investor must absorb first
• c.5%, because the insurer absorbs the first 10% of the index decline✓
• d.0%, because registered index-linked annuities guarantee principal

In a registered index-linked annuity, a buffer is the percentage loss of the index that the insurance company absorbs before the investor absorbs anything. With a 10% buffer and a 15% index decline, the investor bears the 5% beyond the buffer. Buffers often come with caps on the gains the investor can earn.FINRA investor education: Annuities (RILAs)

A mutual fund has no asset-based sales charge but pays a service fee. Under FINRA Rule 2341, what is the maximum aggregate sales charge it may impose?

• a.8.5% of the offering price
• b.6.25% of the offering price
• c.7.25% of the offering price✓
• d.9.0% of the offering price

FINRA Rule 2341(d)(1)(D) caps the aggregate sales charge of an investment company with no asset-based sales charge that pays a service fee at 7.25% of the offering price. A fund with neither a service fee nor an asset-based charge may go as high as 8.5% if it offers quantity discounts, and a fund with an asset-based sales charge and service fees is capped at 6.25% of gross sales.FINRA Rule 2341(d)(1)(D)

An investor sells shares she held for 10 months at a gain. How is the gain taxed?

• a.As a short-term gain, taxed as ordinary income at graduated rates✓
• b.As a long-term gain, at a maximum 15% rate
• c.As a long-term gain, at a maximum 28% rate
• d.It is not taxed until the investor has held the shares a full year

A capital gain is short-term if the asset was held one year or less. Net short-term gains are taxed as ordinary income at graduated tax rates. Only gains on assets held for more than one year are long-term.IRS Topic 409

Even if a fund charges no front-end sales charge, which fee may it still assess when an investor buys shares?

• a.A purchase fee✓
• b.A contingent deferred sales charge on the purchase
• c.A 12b-1 fee paid directly by the investor at purchase
• d.A management fee paid directly to the underwriter

FINRA lists purchase fees among the fees a fund may charge based on investor action, and notes that a fund may assess one at the time of purchase whether or not it charges a front-end sales charge. Redemption fees and exchange fees are other action-based fees.FINRA investor education: Mutual funds (fees)

A popular mutual fund stops accepting new investors, but existing shareholders may still buy and redeem shares. How should this fund be classified?

• a.It has become a closed-end fund, because it no longer sells new shares to any new investors
• b.It remains an open-end fund, because existing shareholders can continue to buy and sell shares✓
• c.It has become a unit investment trust, because its share count is fixed
• d.It must liquidate, because open-end funds must always accept new investors in order to stay registered

FINRA explains that some mutual funds get so large that they close to new investors, yet remain open-end funds because existing shareholders can continue to buy and sell shares. A closed-end fund raises money once and then trades on an exchange.FINRA investor education: Mutual funds

A mutual fund adopts a 12b-1 plan after its shares have already been offered to the public. Besides the board votes, what shareholder approval does the rule require?

• a.A vote of at least a majority of the fund's outstanding voting securities✓
• b.A two-thirds vote of the fund's independent directors only
• c.No shareholder approval, because the board acts for shareholders
• d.Unanimous consent of all shareholders who bought before the plan was adopted

If a 12b-1 plan is adopted after a public offering of the fund's voting securities, the rule requires approval by at least a majority of the outstanding voting securities. The shareholder vote adds a check beyond the board's vote.17 CFR 270.12b-1(b)(1)

A hedge fund tells a prospective investor that she will be unable to redeem for the first year after investing. What is this restriction called?

• a.A high-water mark
• b.A lock-up period✓
• c.A hurdle rate
• d.A net asset value swing

A lock-up period is a stretch, often one year or more, during which investors cannot cash in their shares. A high-water mark and a hurdle rate limit when the manager may charge a performance fee, and neither restricts redemption.FINRA Investor Education, Hedge funds (SEC Investor.gov)

After its first year, how often must a fund's board specifically approve the continuation of a 12b-1 plan?

• a.Only once, because approval at adoption covers the plan permanently
• b.Every five years, at the same time as the prospectus update
• c.Only when shareholders petition the board to review the plan
• d.At least annually, by the board and by the independent directors✓

Rule 12b-1 allows a plan to continue beyond one year from adoption only so long as its continuance is specifically approved at least annually by the board and by the disinterested directors. A plan therefore cannot become permanent through a single initial vote.17 CFR 270.12b-1(b)(3)(i)

Why do the returns of a fund of funds depend on two layers of costs?

• a.Its underlying funds are not allowed to charge any fees, so only the fund of funds itself bills investors
• b.It is required to charge both a front-end load and a back-end load on every purchase and redemption
• c.Its returns are affected by the fees of both the fund itself and the underlying funds it holds✓
• d.It pays a 12b-1 fee to each of its shareholders out of the income that the underlying funds earn

Funds of funds are mutual funds that invest in other mutual funds. They can achieve much greater diversification, but their returns are affected by the fees of both the fund itself and the underlying funds. Redundancy can also cut diversification if several underlying funds hold the same investments.FINRA investor education: Mutual funds (fund of funds)

A client replaces her deferred annuity with a new one in a Section 1035 exchange. Besides the tax-free transfer, which cost does FINRA say she should expect?

• a.The old contract's surrender period carries over to the new contract and the clock never restarts
• b.The gain in the old contract is taxed in full in the year of the exchange, as ordinary income
• c.The surrender period usually starts over on the new contract, and additional fees may apply✓
• d.The new contract has no surrender charges at all because it was acquired through an exchange

FINRA says that exchanging one annuity for another may involve additional costs and fees, including surrender charges, and usually means the clock restarts for early withdrawal penalties. A 1035 exchange allows the direct transfer without tax consequences.FINRA investor education: Annuities (exchanges)

A client says his annuity cannot lose its guaranteed payments because it is insured by the FDIC. Which response is correct?

• a.He is right, because annuities are insured by the FDIC up to $250,000
• b.He is right, because SIPC covers annuity contracts up to $500,000
• c.He is wrong, because annuities have no guarantee of any kind
• d.Annuities are not FDIC or SIPC insured; the guarantee is only as good as the issuing insurance company, with some state guarantees✓

Annuities aren't guaranteed by the FDIC, SIPC or any other federal agency. There may be state guarantees if an insurer fails, but a fixed annuity is guaranteed only as long as the issuing insurance company remains in business.FINRA investor education: Annuities (risks)

An investor chooses a 10% floor on a registered index-linked annuity. The index then falls 25%. What is the maximum loss the investor absorbs?

• a.25%, because the floor applies only to gains
• b.10%, because the insurer absorbs losses beyond the floor✓
• c.15%, because the insurer absorbs the first 10% of the decline
• d.0%, because a floor guarantees the investor's principal

A floor is the percentage loss of the index that the investor is willing to absorb before the insurance company absorbs further losses. With a 10% floor and a 25% decline, the investor's maximum absorbed loss is 10%. A buffer works the other way, with the insurer taking the first slice of loss.FINRA investor education: Annuities (RILAs)

An insurer receives a complete application and initial purchase payment for a variable annuity. Under Rule 22c-1, within how many business days must the payment be priced at the next computed net asset value?

• a.Not later than two business days after the insurer receives the order✓
• b.Not later than the same business day, with no exceptions for incomplete applications
• c.Not later than ten business days after the free-look period ends for the contract
• d.Not later than thirty calendar days after the application is signed

Rule 22c-1 gives an insurance company sponsoring a separate account up to two business days after receipt of a complete application and initial purchase payment to price the payment at the next computed net asset value. Ordinary fund orders are priced at the next NAV computed after receipt.17 CFR 270.22c-1(c)

The IRS sets the 2026 limit on employee elective deferrals to a SIMPLE 401(k) plan. Compared with the limit for a traditional 401(k), the SIMPLE 401(k) limit is:

• a.The same, at $24,500
• b.Higher, at $31,000 versus $24,500
• c.Lower, at $17,000 versus $24,500✓
• d.Lower, at $7,500 versus $24,500

The IRS lists the 2026 elective deferral limit at $24,500 for traditional and safe harbor 401(k) plans and $17,000 for a SIMPLE 401(k) plan, each subject to cost-of-living adjustments. Participants aged 50 or more may add catch-up contributions if the plan permits them.IRC 401(k)

For a 529 plan, what limit applies to tax-free withdrawals for tuition at an elementary or secondary school?

• a.Up to $10,000 a year of tuition per beneficiary✓
• b.Up to $2,000 a year, the same as a Coverdell account
• c.No limit, because any school tuition is a qualified expense
• d.Nothing, because only college expenses qualify

A qualified 529 distribution includes up to $10,000 in annual expenses for tuition at an elementary or secondary public, private or religious school. Expenses beyond that amount are not qualified, and earnings on that portion are taxable and may be penalized.IRS Section 529 FAQ

How often must an exchange-traded fund that relies on Rule 6c-11 post its portfolio holdings on its website?

• a.Once a quarter, 60 days after the quarter ends, in the fund's periodic report filed with the SEC
• b.Monthly, on the first business day of the month, in a summary that is posted on the fund's website
• c.Only on days when the fund rebalances its portfolio holdings, and then after the market closes
• d.Every business day, before regular trading opens on its primary listing exchange✓

Rule 6c-11 requires an ETF to disclose prominently on a public website, each business day and before the opening of regular trading, the holdings that will form the basis of the next net asset value calculation. A mutual fund, by contrast, reports its holdings less often.17 CFR 270.6c-11(c)(1)

A company wants REIT status. What share of its gross income must come from rents from real property, mortgage interest, gains on real property and similar sources?

• a.At least 75 percent✓
• b.At least 50 percent
• c.At least 90 percent
• d.At least 100 percent

Section 856(c)(3) requires at least 75 percent of a REIT's gross income to come from sources such as rents from real property, interest on mortgage obligations and gains from sales of real property. A broader 95 percent gross-income test, covering dividends, interest, rents and similar items, also applies.26 U.S.C. 856(c)(3)

Under Rule 6c-11, an ETF's website must show a median bid-ask spread. Over what period is that median computed?

• a.The last trading day
• b.The most recent calendar quarter
• c.The last 30 calendar days✓
• d.The last 12 months

Rule 6c-11 requires the ETF to publish its median bid-ask spread, based on the national best bid and offer at the end of each 10-second interval during each trading day of the last 30 calendar days. The premium and discount history, by contrast, covers the most recent calendar year.17 CFR 270.6c-11(c)(1)(v)

A money market fund adopts policies reasonably designed to restrict every beneficial owner of its shares to natural persons. Under Rule 2a-7, this fund is a

• a.government money market fund
• b.retail money market fund✓
• c.prime institutional fund
• d.single-state tax-exempt fund

Rule 2a-7 defines a retail money market fund by who may own it: policies and procedures reasonably designed to limit all beneficial owners to natural persons. Portfolio content, such as 99.5% in government securities, is what defines a government fund.17 CFR 270.2a-7(a)(21)

A mutual fund grows so large that it stops accepting new investors. Which statement is correct?

• a.It becomes a closed-end fund and must list its shares on an exchange within one year
• b.It must convert to a unit investment trust with a fixed portfolio and a set termination date
• c.It remains an open-end fund because existing shareholders can still buy and redeem shares✓
• d.It loses its SEC registration because it no longer sells new shares to the public

An open-end fund is defined by continuous issuance and redemption with existing shareholders. A fund that closes to new investors still lets current holders buy and sell, so it stays open-end. A closed-end fund, by contrast, raises money in a single offering and then trades on an exchange.FINRA Investor Education, Mutual Funds

A variable annuity owner dies during the accumulation phase. Absent an optional death-benefit rider, what is the beneficiary generally guaranteed?

• a.The highest account value reached while the contract was in force
• b.A return of the premiums paid, net of any withdrawals✓
• c.The premiums paid, compounded at the contract's assumed interest rate
• d.The full account value at the owner's age 59½

Variable annuity death benefits generally guarantee only a return of the premium net of withdrawals. A rider, which costs extra, can step the benefit up with market performance or a fixed rate.FINRA Investor Education, Annuities

A money market fund's weighted average maturity is 55 days, but because it holds floating-rate notes with long final maturities, its weighted average life measured without regard to interest-rate resets is 135 days. What does Rule 2a-7 conclude?

• a.The fund complies, because only the 60-day average maturity test applies to a money market fund
• b.The fund complies, because the weighted average life limit is 180 days for government funds
• c.The fund breaches the rule, because the weighted average life may not exceed 120 calendar days✓
• d.The fund breaches the rule only if the weighted average life exceeds 397 days on any day

Rule 2a-7 imposes two average tests: a 60-day cap on weighted average maturity and a 120-day cap on weighted average life, which is measured without the interest-rate-reset shortcuts. A fund with a 135-day weighted average life breaks the second limit even though it passes the first.17 CFR 270.2a-7(d)(1)(iii)

A money market fund's portfolio holds only securities that comply with Rule 2a-7. Which limit applies to the dollar-weighted average portfolio maturity (WAM) of the fund?

• a.No more than 60 calendar days✓
• b.No more than 90 calendar days
• c.No more than 120 calendar days
• d.No more than 397 calendar days

Rule 2a-7 caps the fund's dollar-weighted average portfolio maturity at 60 calendar days. Two other figures in the rule are easy to confuse with it: the dollar-weighted average life (WAL) may not exceed 120 days, and no single instrument may have a remaining maturity greater than 397 calendar days.17 CFR 270.2a-7(d)(1)

Which history of premiums and discounts must an ETF post on its website under Rule 6c-11?

• a.A table showing the number of days its shares traded at a premium or discount during the most recent calendar year and quarters since✓
• b.A table of the daily premium and discount for only the last five trading days
• c.A statement of the highest premium the fund has ever recorded
• d.Nothing, because ETF prices are set at net asset value

Rule 6c-11 requires a table showing the number of days the ETF traded at a premium or discount over the most recently completed calendar year and the quarters since, along with a line graph of premiums and discounts. ETF shares trade at market prices, so premiums and discounts to net asset value do occur.17 CFR 270.6c-11(c)(1)(iii)

Under Rule 2a-7, what is the longest remaining maturity an individual instrument may have when a money market fund acquires it?

• a.60 calendar days
• b.397 calendar days✓
• c.One year, counted as exactly 365 calendar days
• d.Two years

A money market fund may not acquire an instrument whose remaining maturity is greater than 397 calendar days. The 60-day figure is a limit on the whole portfolio's average maturity, not on any single holding.17 CFR 270.2a-7(d)(1)

Under SEC Rule 12b-1, which approval must a fund's plan to pay distribution expenses from fund assets receive from the board?

• a.A vote of the investment adviser's management committee only
• b.Written consent of the fund's distributor, without a board meeting
• c.A vote of the full board and of the directors who are not interested persons, cast in person at a meeting called for that purpose✓
• d.A vote of only the directors who are officers of the adviser

A 12b-1 plan and its related agreements must be approved by the board of directors and also by the directors who are not interested persons and have no financial interest in the plan, voting in person at a meeting called for the purpose. The independent-director vote guards shareholders against paying for distribution that mainly benefits the adviser.17 CFR 270.12b-1(b)(2)

A client in the 32% bracket is considering a publicly traded REIT. How are most REIT dividends generally taxed?

• a.As a tax-free return of capital for the first five years after the shares are bought, then ordinary income
• b.As ordinary income, without the reduced rates that apply to many other corporate dividends✓
• c.At the 0%, 15% or 20% rates that apply to qualified dividends paid by most domestic corporations
• d.As long-term capital gains only if the REIT owns office property and the shares are held for a year

Dividends paid by REITs generally are treated as ordinary income and are not entitled to the reduced rates on other corporate dividends. REITs typically distribute essentially all taxable income.SEC Investor.gov, REITs

A married investor files a separate return and has a net capital loss of $6,000 and no gains this year. What is the most she may deduct against ordinary income on that return?

• a.$1,500✓
• b.$3,000
• c.$6,000
• d.$0

The yearly limit on deducting a net capital loss against ordinary income is $3,000, or $1,500 for a married individual filing separately. The unused $4,500 carries forward.IRC 1211(b)

A client invested $100,000 in a variable annuity, withdrew $20,000, and the contract has since fallen to $60,000. He dies before payouts begin, and the contract has the standard death benefit with no riders. What is the guaranteed death benefit?

• a.$100,000, the full premium paid, with no reduction for withdrawals
• b.$60,000, the current contract value after the market decline
• c.$20,000, the amount he withdrew from the contract earlier
• d.$80,000, the premium paid less withdrawals✓

A variable annuity's standard death benefit generally guarantees only a return of the premium, net of any withdrawals. Here $100,000 less $20,000 is $80,000. A death benefit rider, for an additional fee, can raise the amount based on market performance or a fixed rate.FINRA investor education: Annuities (death benefit)

A target-date 2035 fund is described in its prospectus. How does such a fund typically change its holdings as 2035 gets closer?

• a.It shifts toward growth stocks, because the investor still has time to grow
• b.It keeps its mix unchanged, to match its benchmark
• c.It sells all holdings and holds cash from the start of the year 2030
• d.It shifts toward conserving value and income-producing investments, taking less risk as the target date approaches✓

Target-date funds are funds of funds that change their investments over time. The farther away the date, the greater the risk the fund usually takes. As the target date approaches, the fund emphasizes conserving the value it has built and shifts toward income-producing investments.FINRA investor education: Mutual funds (target-date)

A client worried about reinvestment risk asks about Treasury STRIPS. Which feature addresses her concern?

• a.STRIPS pay semiannual interest that the holder can reinvest at the original fixed rate
• b.STRIPS are non-callable, so they cannot be redeemed early when rates fall✓
• c.STRIPS are backed by a pool of mortgages that prepay slowly when rates fall sharply
• d.STRIPS convert to common stock if rates fall

Because STRIPS cannot be called, the holder will not be forced to take cash and reinvest at a lower rate. Zeros are still exposed to interest-rate risk if sold before maturity, and long-term zeros have high duration.FINRA Investor Insights, Zero Coupon Bonds

Which transaction is NOT covered by FINRA Rule 2330 on recommended deferred variable annuity transactions?

• a.The initial purchase of a deferred variable annuity with a recommended subaccount allocation
• b.An exchange of one deferred variable annuity for another that the representative recommends
• c.A reallocation among subaccounts made after the initial purchase✓
• d.A recommended initial subaccount allocation

Rule 2330 applies to recommended purchases and exchanges of deferred variable annuities and recommended initial subaccount allocations. It does not apply to reallocations among subaccounts made after the initial purchase, or to funds paid after the initial purchase or exchange.FINRA Rule 2330(a)(1)

Which three basic features does FINRA say a typical variable annuity offers that are not commonly found in mutual funds?

• a.Tax-deferred earnings, a death benefit, and annuity payout options that can guarantee income for life✓
• b.Daily liquidity with no surrender charges, a guaranteed rate of return, and FDIC insurance on the account
• c.Lower annual expenses than a mutual fund, tax-free withdrawals, and a fixed principal value for the contract
• d.Exchange-traded pricing throughout the day, a death benefit, and no surrender charges after the first month

A typical variable annuity offers tax-deferred treatment of earnings, a death benefit, and payout options that can provide guaranteed income for life, but its annual expenses are likely to be much higher than a typical mutual fund's. Unlike a fixed annuity, it does not guarantee a return.FINRA investor education: Annuities (variable)

Immediately after buying a new commercial paper issue, a diversified money market fund (not a single-state fund) has what maximum share of total assets that Rule 2a-7 lets it hold in securities of that one issuer, apart from the brief three-business-day exception?

• a.5% of total assets✓
• b.10% of total assets
• c.25% of total assets
• d.1% of total assets

Rule 2a-7's issuer diversification limit is 5% of total assets in the securities of any one issuer immediately after acquisition. A fund may exceed that, up to 25%, in one issuer for up to three business days, but only for one issuer at a time.17 CFR 270.2a-7(d)(3)(i)(A)

Which fee structure is typical for investors in a hedge fund?

• a.A front-end sales charge of 5.75% and a 12b-1 fee of 0.25%
• b.A management fee of 1-2% of NAV plus a performance fee of 15-20% of profits✓
• c.A flat annual fee of 0.03% of assets with no performance fee
• d.A performance fee of 1-2% of profits plus a management fee of 15-20% of NAV

Investors in hedge funds typically pay an asset management fee of 1-2% of NAV and a performance fee of 15-20% of profit, often subject to a high-water mark or hurdle rate. Registered mutual funds, not hedge funds, charge sales loads and 12b-1 fees.SEC Investor.gov, Hedge Funds

According to FINRA's investor guidance, what is the maximum annual 12b-1 fee that a mutual fund may deduct from its assets?

• a.0.25% of the assets in the fund
• b.2% of the assets in the fund
• c.1% of the assets in the fund✓
• d.There is no cap on 12b-1 fees

FINRA states that 12b-1 fees are capped at 1 percent of the investor's assets in the fund. They are taken out of fund assets to pay for marketing and selling the fund, some shareholder services, and sometimes employee bonuses.FINRA investor education: Mutual funds (12b-1)

Which statement about the regulation of annuities is correct?

• a.Fixed and variable annuities are both securities that must be registered with the SEC
• b.Only variable annuities are regulated, and only at the federal level
• c.All annuities are regulated by state insurance commissioners, and variable annuities are also securities regulated by the SEC and FINRA✓
• d.Annuities are regulated by the FDIC because they are insurance-backed deposits

Insurance regulation is a state function for every annuity. A variable annuity, and a registered index-linked annuity, is also a security, so the SEC and FINRA regulate it. Annuities are not covered by the FDIC or SIPC.FINRA Investor Education, Annuities