Wrong-answer intelligence: the distractors candidates select
A wrong answer becomes useful when you can see the tempting alternative, the sample behind it, and the rule that resolves the distinction.
This report joins privacy-safe aggregate multiple-choice selections to Lucky the Banker’s checked-in public securities question banks. It reports selection behavior—not invented claims about what individual learners were thinking.
Practice data through 2026-10-02.
The wrong choices that clear both thresholds
Ranked by selections of the leading wrong choice. Every card reports answer records and distinct learners separately.
A customer wants to sell a stock only if it drops to $50 or lower. Which order type should be used?
B. Sell limit order
Selected in 15 records by 8 distinct learners—93.8% of wrong answers to this question.
A. Sell stop order
Overall miss rate: 64% (16 of 25 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Sell limit order” The checked-in explanation resolves that contrast: “A sell stop order triggers a sale if the price drops to or below a specific point. A sell limit only executes above a set price, buy stop/buy limit are for purchasing, not selling.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
A sell stop order triggers a sale if the price drops to or below a specific point. A sell limit only executes above a set price, buy stop/buy limit are for purchasing, not selling.
Which of the following is a LAGGING economic indicator?
B. Initial claims for unemployment insurance
Selected in 13 records by 8 distinct learners—81.3% of wrong answers to this question.
A. Average prime rate charged by banks
Overall miss rate: 64% (16 of 25 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Initial claims for unemployment insurance” The checked-in explanation resolves that contrast: “The average prime rate is a lagging indicator because banks adjust it after broader economic conditions have changed. Initial unemployment claims, building permits, and stock indexes are leading indicators that tend to move before the overall economy.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
The average prime rate is a lagging indicator because banks adjust it after broader economic conditions have changed. Initial unemployment claims, building permits, and stock indexes are leading indicators that tend to move before the overall economy.
If a municipal securities dealer violates an MSRB rule, who has enforcement authority?
B. SEC directly
Selected in 13 records by 8 distinct learners—92.9% of wrong answers to this question.
C. FINRA or appropriate bank regulator
Overall miss rate: 58.3% (14 of 24 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “SEC directly” The checked-in explanation resolves that contrast: “MSRB writes the rules but cannot enforce them. FINRA enforces for broker-dealers, bank regulators for banks. SEC oversees, but enforcement goes through SROs or bank regulators. MSRB does not enforce directly.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
MSRB writes the rules but cannot enforce them. FINRA enforces for broker-dealers, bank regulators for banks. SEC oversees, but enforcement goes through SROs or bank regulators. MSRB does not enforce directly.
A market maker is best described as a dealer that:
C. Matches buyers and sellers without taking a position in the security
Selected in 11 records by 5 distinct learners—91.7% of wrong answers to this question.
B. Stands ready to buy and sell a specific security at publicly quoted prices
Overall miss rate: 41.4% (12 of 29 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Matches buyers and sellers without taking a position in the security” The checked-in explanation resolves that contrast: “A market maker is a dealer that stands ready to buy and sell a particular security at publicly quoted bid and ask prices, providing liquidity to the market. Market makers take positions in the securities they trade and profit from the bid-ask spread. Choice A describes a broker (agent), not a dealer. Market makers serve all market participants, not just institutional investors.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
A market maker is a dealer that stands ready to buy and sell a particular security at publicly quoted bid and ask prices, providing liquidity to the market. Market makers take positions in the securities they trade and profit from the bid-ask spread. Choice A describes a broker (agent), not a dealer. Market makers serve all market participants, not just institutional investors.
Under the Bank Secrecy Act, broker-dealers must file a Suspicious Activity Report (SAR) when they detect transactions involving what minimum amount that may involve suspicious activity?
A. $10,000
Selected in 11 records by 8 distinct learners—84.6% of wrong answers to this question.
C. $5,000
Overall miss rate: 76.5% (13 of 17 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “$10,000” The checked-in explanation resolves that contrast: “Broker-dealers must file a SAR for transactions of $5,000 or more that the firm knows, suspects, or has reason to suspect involve illegal funds, are designed to evade reporting requirements, or have no apparent lawful purpose. SARs are filed with FinCEN. The $10,000 threshold applies to Currency Transaction Reports for cash transactions, not SARs.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Broker-dealers must file a SAR for transactions of $5,000 or more that the firm knows, suspects, or has reason to suspect involve illegal funds, are designed to evade reporting requirements, or have no apparent lawful purpose. SARs are filed with FinCEN. The $10,000 threshold applies to Currency Transaction Reports for cash transactions, not SARs.
An investor writes a put option. If exercised, their obligation is to:
A. Sell the underlying security at the strike price
Selected in 11 records by 6 distinct learners—100% of wrong answers to this question.
B. Buy the underlying security at the strike price
Overall miss rate: 64.7% (11 of 17 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Sell the underlying security at the strike price” The checked-in explanation resolves that contrast: “A put writer must buy the underlying security if exercised. Selling the security is the call writer's obligation. Option premiums are paid upfront. NAV is unrelated to options.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
A put writer must buy the underlying security if exercised. Selling the security is the call writer's obligation. Option premiums are paid upfront. NAV is unrelated to options.
A Treasury note trade settles on Monday, May 10. For accrued interest, what day count convention is used?
B. 30/360
Selected in 10 records by 8 distinct learners—90.9% of wrong answers to this question.
A. Actual/actual
Overall miss rate: 61.1% (11 of 18 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “30/360” The checked-in explanation resolves that contrast: “Treasury securities use the actual/actual day count for accrued interest, meaning actual days elapsed in period and actual days in the year.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Treasury securities use the actual/actual day count for accrued interest, meaning actual days elapsed in period and actual days in the year.
Which of the following is a COINCIDENT economic indicator that reflects the current state of the economy?
B. Stock market performance (S&P 500)
Selected in 9 records by 5 distinct learners—52.9% of wrong answers to this question.
A. Industrial production
Overall miss rate: 58.6% (17 of 29 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Stock market performance (S&P 500)” The checked-in explanation resolves that contrast: “Industrial production is a coincident indicator — it moves in real-time with the economy. Other coincident indicators include nonfarm payroll employment, personal income (less transfer payments), and manufacturing/trade sales. Stock market performance and new orders for consumer goods are leading indicators (they predict future changes). The average prime rate is a lagging indicator (it changes after the economy has…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Industrial production is a coincident indicator — it moves in real-time with the economy. Other coincident indicators include nonfarm payroll employment, personal income (less transfer payments), and manufacturing/trade sales. Stock market performance and new orders for consumer goods are leading indicators (they predict future changes). The average prime rate is a lagging indicator (it changes after the economy has already shifted).
A put feature in a bond will tend to:
A. Increase the bond's yield
Selected in 9 records by 5 distinct learners—81.8% of wrong answers to this question.
B. Lower the bond's yield
Overall miss rate: 57.9% (11 of 19 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Increase the bond's yield” The checked-in explanation resolves that contrast: “Put features benefit investors, so the issuer can offer a lower yield. They do not make a bond convertible; the effect is to reduce, not increase, required yield.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Put features benefit investors, so the issuer can offer a lower yield. They do not make a bond convertible; the effect is to reduce, not increase, required yield.
If the government wants to combat high inflation using fiscal policy, it would MOST likely:
D. Buy government securities through open market operations
Selected in 8 records by 6 distinct learners—44.4% of wrong answers to this question.
A. Increase taxes and decrease government spending
Overall miss rate: 56.3% (18 of 32 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Buy government securities through open market operations” The checked-in explanation resolves that contrast: “To fight inflation through fiscal policy, the government would use contractionary measures: increasing taxes and decreasing government spending. Lowering the federal funds target or buying government securities are monetary policy actions taken by the Federal Reserve.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
To fight inflation through fiscal policy, the government would use contractionary measures: increasing taxes and decreasing government spending. Lowering the federal funds target or buying government securities are monetary policy actions taken by the Federal Reserve.
Which market participant is responsible for maintaining records of security ownership and issuing and canceling certificates?
A. Custodian
Selected in 8 records by 5 distinct learners—80% of wrong answers to this question.
C. Transfer agent
Overall miss rate: 38.5% (10 of 26 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Custodian” The checked-in explanation resolves that contrast: “A transfer agent maintains records of who owns a company's securities, issues and cancels certificates to reflect ownership changes, and distributes dividends on behalf of the issuer. A custodian holds securities for safekeeping, a clearing firm handles trade settlement, and a prime broker provides services to hedge funds. Transfer agents are registered with the SEC.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
A transfer agent maintains records of who owns a company's securities, issues and cancels certificates to reflect ownership changes, and distributes dividends on behalf of the issuer. A custodian holds securities for safekeeping, a clearing firm handles trade settlement, and a prime broker provides services to hedge funds. Transfer agents are registered with the SEC.
Regulation A+ allows smaller companies to raise capital with a simplified registration process. What is the maximum offering amount under Regulation A+ Tier 2?
A. $20 million in a 12-month period
Selected in 8 records by 5 distinct learners—72.7% of wrong answers to this question.
B. $75 million in a 12-month period
Overall miss rate: 42.3% (11 of 26 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “$20 million in a 12-month period” The checked-in explanation resolves that contrast: “Regulation A+ Tier 2 allows companies to raise up to $75 million in a 12-month period with a simplified registration process. Tier 1 allows up to $20 million. Tier 2 offerings are exempt from state blue sky registration requirements (preempted by federal law) but require ongoing reporting obligations including audited financial statements. Reg A+ is sometimes called a 'mini-IPO' because it provides a lighter…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Regulation A+ Tier 2 allows companies to raise up to $75 million in a 12-month period with a simplified registration process. Tier 1 allows up to $20 million. Tier 2 offerings are exempt from state blue sky registration requirements (preempted by federal law) but require ongoing reporting obligations including audited financial statements. Reg A+ is sometimes called a 'mini-IPO' because it provides a lighter regulatory path for smaller companies to access public capital markets.
Which portfolio is MOST effectively diversified to reduce unsystematic risk?
A. 20 stocks spread across technology, healthcare, financials, consumer staples, and utilities
Selected in 8 records by 6 distinct learners—88.9% of wrong answers to this question.
D. One index fund tracking the S&P 500
Overall miss rate: 47.4% (9 of 19 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “20 stocks spread across technology, healthcare, financials, consumer staples, and utilities” The checked-in explanation resolves that contrast: “An S&P 500 index fund provides broad exposure across hundreds of companies and many industries, making it the strongest choice for reducing unsystematic risk. Holding many securities in one industry, or only a few concentrated positions, leaves substantial company and sector-specific risk.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
An S&P 500 index fund provides broad exposure across hundreds of companies and many industries, making it the strongest choice for reducing unsystematic risk. Holding many securities in one industry, or only a few concentrated positions, leaves substantial company and sector-specific risk.
A broker-dealer is required to maintain books and records, submit financial reports, and register with the SEC. Which law establishes these obligations?
A. Securities Act of 1933
Selected in 8 records by 7 distinct learners—57.1% of wrong answers to this question.
C. Securities Exchange Act of 1934
Overall miss rate: 87.5% (14 of 16 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Securities Act of 1933” The checked-in explanation resolves that contrast: “The Securities Exchange Act of 1934 governs broker-dealers, exchanges, and reporting requirements. The 1933 Act deals with new issues, the Advisers Act covers investment advisers, and Sarbanes-Oxley addresses corporate governance.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
The Securities Exchange Act of 1934 governs broker-dealers, exchanges, and reporting requirements. The 1933 Act deals with new issues, the Advisers Act covers investment advisers, and Sarbanes-Oxley addresses corporate governance.
Breakeven on a short call is calculated as:
B. Strike price minus premium
Selected in 8 records by 5 distinct learners—80% of wrong answers to this question.
D. Strike price plus premium
Overall miss rate: 62.5% (10 of 16 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Strike price minus premium” The checked-in explanation resolves that contrast: “Breakeven for short call writers = strike price + premium received. Buyers have reverse breakeven formulas.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Breakeven for short call writers = strike price + premium received. Buyers have reverse breakeven formulas.
How are closed-end fund shares typically bought and sold by investors?
B. Through continuous issuance and redemption by the fund
Selected in 8 records by 5 distinct learners—80% of wrong answers to this question.
C. On an exchange at market prices
Overall miss rate: 66.7% (10 of 15 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Through continuous issuance and redemption by the fund” The checked-in explanation resolves that contrast: “Closed-end fund shares are typically bought and sold on an exchange at market prices after the initial offering. Continuous issuance and redemption at NAV are open-end mutual fund features.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Closed-end fund shares are typically bought and sold on an exchange at market prices after the initial offering. Continuous issuance and redemption at NAV are open-end mutual fund features.
An investor holds $400,000 in securities and $300,000 in cash in a single brokerage account at a firm that becomes insolvent. What is the maximum SIPC coverage this investor would receive?
B. $650,000 ($400,000 in securities and $250,000 in cash)
Selected in 7 records by 5 distinct learners—53.8% of wrong answers to this question.
A. $500,000 total ($400,000 in securities and $100,000 in cash)
Overall miss rate: 44.8% (13 of 29 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “$650,000 ($400,000 in securities and $250,000 in cash)” The checked-in explanation resolves that contrast: “SIPC coverage is capped at $500,000 per customer, of which no more than $250,000 can be for cash claims. Two limits apply here: the $500,000 overall cap and the $250,000 cash sublimit. The securities ($400,000) are fully covered. For cash, the lesser of two constraints applies: the $250,000 cash sublimit, or the remaining room under the $500,000 cap ($500,000 - $400,000 = $100,000). Since $100,000 is less than…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
SIPC coverage is capped at $500,000 per customer, of which no more than $250,000 can be for cash claims. Two limits apply here: the $500,000 overall cap and the $250,000 cash sublimit. The securities ($400,000) are fully covered. For cash, the lesser of two constraints applies: the $250,000 cash sublimit, or the remaining room under the $500,000 cap ($500,000 - $400,000 = $100,000). Since $100,000 is less than $250,000, only $100,000 of cash is covered. Total SIPC protection: $400,000 + $100,000 = $500,000, leaving $200,000 in cash unprotected. Remember: SIPC protects against broker-dealer insolvency, NOT market losses.
Which of the following is considered a LEADING economic indicator?
A. Gross Domestic Product (GDP)
Selected in 7 records by 6 distinct learners—70% of wrong answers to this question.
B. Building permits for new housing
Overall miss rate: 47.6% (10 of 21 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Gross Domestic Product (GDP)” The checked-in explanation resolves that contrast: “Building permits are a leading indicator because they predict future economic activity — permits are obtained before construction begins. Leading indicators change BEFORE the economy changes direction. GDP is a coincident indicator (measures current activity). CPI is a lagging indicator (reflects past price changes). Average duration of unemployment is a lagging indicator. Other leading indicators include stock…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Building permits are a leading indicator because they predict future economic activity — permits are obtained before construction begins. Leading indicators change BEFORE the economy changes direction. GDP is a coincident indicator (measures current activity). CPI is a lagging indicator (reflects past price changes). Average duration of unemployment is a lagging indicator. Other leading indicators include stock market returns, initial jobless claims, and the money supply (M2).
The MSRB has rulemaking authority for municipal securities but does NOT have enforcement authority. Who enforces MSRB rules for bank dealers?
D. FINRA
Selected in 7 records by 5 distinct learners—70% of wrong answers to this question.
C. The SEC and banking regulators (OCC, FDIC, Federal Reserve)
Overall miss rate: 52.6% (10 of 19 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “FINRA” The checked-in explanation resolves that contrast: “The MSRB writes rules but cannot enforce them. Enforcement of MSRB rules is split: FINRA enforces rules for broker-dealers that deal in municipal securities, while the SEC and federal banking regulators (OCC, FDIC, Federal Reserve) enforce rules for bank dealers. This separation of rulemaking and enforcement is unique to the MSRB and is a frequently tested concept on the SIE exam.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
The MSRB writes rules but cannot enforce them. Enforcement of MSRB rules is split: FINRA enforces rules for broker-dealers that deal in municipal securities, while the SEC and federal banking regulators (OCC, FDIC, Federal Reserve) enforce rules for bank dealers. This separation of rulemaking and enforcement is unique to the MSRB and is a frequently tested concept on the SIE exam.
A dispute arises between two FINRA member firms regarding a trade settlement. Under FINRA rules, how must this dispute be resolved?
C. The firms may choose litigation or arbitration at their discretion
Selected in 7 records by 5 distinct learners—100% of wrong answers to this question.
B. The dispute must be submitted to FINRA arbitration
Overall miss rate: 41.2% (7 of 17 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “The firms may choose litigation or arbitration at their discretion” The checked-in explanation resolves that contrast: “Under FINRA Rule 13200 (Industry Code), disputes between FINRA member firms or between associated persons of different member firms must be arbitrated through FINRA's dispute resolution forum. This is mandatory — unlike customer arbitration where the predispute agreement drives the requirement, industry arbitration is required by FINRA membership rules. The parties do not have the option to choose litigation instead…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Under FINRA Rule 13200 (Industry Code), disputes between FINRA member firms or between associated persons of different member firms must be arbitrated through FINRA's dispute resolution forum. This is mandatory — unlike customer arbitration where the predispute agreement drives the requirement, industry arbitration is required by FINRA membership rules. The parties do not have the option to choose litigation instead for matters covered by the Industry Code.
Which party is primarily involved when ETFs are created or redeemed in large blocks known as 'creation units'?
A. Broker-dealers only
Selected in 7 records by 7 distinct learners—63.6% of wrong answers to this question.
D. Authorized participants
Overall miss rate: 68.8% (11 of 16 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Broker-dealers only” The checked-in explanation resolves that contrast: “Authorized participants (APs) create and redeem ETF shares in large blocks, facilitating ETF liquidity. Retail investors access ETFs via the secondary market, not direct creation/redemption. The SEC and broker-dealers aren't responsible for this process.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Authorized participants (APs) create and redeem ETF shares in large blocks, facilitating ETF liquidity. Retail investors access ETFs via the secondary market, not direct creation/redemption. The SEC and broker-dealers aren't responsible for this process.
Which of the following must be true for a securities offering to qualify for exemption under Regulation D Rule 506(b)?
B. The offering must not exceed $20 million in any 12-month period
Selected in 6 records by 6 distinct learners—85.7% of wrong answers to this question.
C. Sales may be made to an unlimited number of accredited investors and up to 35 non-accredited investors
Overall miss rate: 24.1% (7 of 29 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “The offering must not exceed $20 million in any 12-month period” The checked-in explanation resolves that contrast: “Regulation D Rule 506(b) permits sales to an unlimited number of accredited investors and up to 35 non-accredited investors. It is an exemption from SEC registration and is often used by private companies.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Regulation D Rule 506(b) permits sales to an unlimited number of accredited investors and up to 35 non-accredited investors. It is an exemption from SEC registration and is often used by private companies.
Under SEC Rule 144, restricted securities acquired in a private placement by a non-affiliate may generally be resold in the public market after a holding period of:
B. 30 days
Selected in 6 records by 5 distinct learners—54.5% of wrong answers to this question.
D. 6 months, if the issuer is a reporting company
Overall miss rate: 44% (11 of 25 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “30 days” The checked-in explanation resolves that contrast: “Rule 144 allows restricted securities to be resold publicly after a holding period. For non-affiliates of SEC-reporting companies, the holding period is 6 months (after which they can sell with no volume or manner-of-sale restrictions if the issuer is current in its reporting). For non-reporting companies, the holding period is 1 year. Affiliates (insiders) face additional volume limitations and must file Form 144.…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Rule 144 allows restricted securities to be resold publicly after a holding period. For non-affiliates of SEC-reporting companies, the holding period is 6 months (after which they can sell with no volume or manner-of-sale restrictions if the issuer is current in its reporting). For non-reporting companies, the holding period is 1 year. Affiliates (insiders) face additional volume limitations and must file Form 144. This rule provides liquidity for privately placed securities.
A small company wants to raise up to $50 million in a streamlined public offering. Which regulation allows this?
D. Rule 144A
Selected in 6 records by 5 distinct learners—46.2% of wrong answers to this question.
C. Regulation A+
Overall miss rate: 56.5% (13 of 23 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Rule 144A” The checked-in explanation resolves that contrast: “Regulation A+ allows streamlined offerings up to $75 million (as of 2021). Reg D is for private placements, S is for offshore, 144A for QIB resales.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Regulation A+ allows streamlined offerings up to $75 million (as of 2021). Reg D is for private placements, S is for offshore, 144A for QIB resales.
Fiscal policy is controlled by which entity?
A. The Federal Reserve Board
Selected in 6 records by 6 distinct learners—60% of wrong answers to this question.
D. The U.S. Congress and the President
Overall miss rate: 43.5% (10 of 23 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “The Federal Reserve Board” The checked-in explanation resolves that contrast: “Fiscal policy — government spending and taxation — is controlled by Congress and the President. Monetary policy — managing the money supply and interest rates — is controlled by the Federal Reserve (through the FOMC). This distinction is critical for the SIE exam. The SEC regulates securities markets and has no role in economic policy. The FOMC is part of the Federal Reserve system and handles monetary policy.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Fiscal policy — government spending and taxation — is controlled by Congress and the President. Monetary policy — managing the money supply and interest rates — is controlled by the Federal Reserve (through the FOMC). This distinction is critical for the SIE exam. The SEC regulates securities markets and has no role in economic policy. The FOMC is part of the Federal Reserve system and handles monetary policy.
All of the following are characteristics of stock rights EXCEPT:
C. They are short-term instruments, typically expiring in 30-90 days
Selected in 6 records by 5 distinct learners—50% of wrong answers to this question.
A. The subscription price is typically above the current market price
Overall miss rate: 52.2% (12 of 23 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “They are short-term instruments, typically expiring in 30-90 days” The checked-in explanation resolves that contrast: “Stock rights have a subscription price BELOW the current market price to incentivize existing shareholders to participate. Warrants, by contrast, have exercise prices above market price at issuance. Rights are indeed short-term (A), issued to existing shareholders (B), and transferable (D).” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Stock rights have a subscription price BELOW the current market price to incentivize existing shareholders to participate. Warrants, by contrast, have exercise prices above market price at issuance. Rights are indeed short-term (A), issued to existing shareholders (B), and transferable (D).
Under the Securities Exchange Act of 1934, the SEC has the authority to do all of the following EXCEPT:
C. Bring civil enforcement actions against securities law violators
Selected in 6 records by 6 distinct learners—60% of wrong answers to this question.
A. Directly prosecute criminal violations of securities law
Overall miss rate: 45.5% (10 of 22 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Bring civil enforcement actions against securities law violators” The checked-in explanation resolves that contrast: “The SEC can bring civil enforcement actions but cannot directly prosecute criminal cases. Criminal prosecution of securities violations is handled by the Department of Justice (DOJ). The SEC can refer cases to the DOJ for criminal prosecution. The SEC does have authority to require broker-dealer registration, approve or disapprove SRO rule changes, and bring civil actions including seeking injunctions, disgorgement,…” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
The SEC can bring civil enforcement actions but cannot directly prosecute criminal cases. Criminal prosecution of securities violations is handled by the Department of Justice (DOJ). The SEC can refer cases to the DOJ for criminal prosecution. The SEC does have authority to require broker-dealer registration, approve or disapprove SRO rule changes, and bring civil actions including seeking injunctions, disgorgement, and civil monetary penalties.
Which Greek quantifies the impact of time decay on options?
B. Delta
Selected in 6 records by 5 distinct learners—85.7% of wrong answers to this question.
C. Theta
Overall miss rate: 41.2% (7 of 17 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “Delta” The checked-in explanation resolves that contrast: “Theta quantifies time decay. Delta measures price sensitivity, gamma is delta’s rate of change, vega is sensitivity to volatility.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Theta quantifies time decay. Delta measures price sensitivity, gamma is delta’s rate of change, vega is sensitivity to volatility.
According to FINRA rules, what is the minimum maintenance margin requirement for an equity margin account?
B. 50% of the current market value
Selected in 6 records by 5 distinct learners—100% of wrong answers to this question.
A. 25% of the current market value
Overall miss rate: 35.3% (6 of 17 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “50% of the current market value” The checked-in explanation resolves that contrast: “FINRA sets a minimum equity margin maintenance of 25%. Initial margin is 50% (Reg T), but maintenance is lower. 10% and 100% are incorrect.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
FINRA sets a minimum equity margin maintenance of 25%. Initial margin is 50% (Reg T), but maintenance is lower. 10% and 100% are incorrect.
A registered representative receives a complaint from FINRA's Department of Enforcement. How many days does the respondent have to file an answer?
B. 30 days
Selected in 6 records by 6 distinct learners—75% of wrong answers to this question.
C. 25 days
Overall miss rate: 53.3% (8 of 15 answer records).
Why it can look plausible—without inventing motive
This distractor presents a competing answer: “30 days” The checked-in explanation resolves that contrast: “Under FINRA's Code of Procedure (Rule 9215), after a complaint is served, the respondent has 25 days to file an answer. If the respondent fails to answer within 25 days, FINRA may file a motion for default, and the hearing panel can issue a default decision. Extensions may be granted for good cause, but the standard deadline is 25 days. This is a commonly tested detail on the SIE exam.” Selection data cannot establish an individual’s reasoning, so this describes the textual contrast rather than assigning a motive.
Correct rule
Under FINRA's Code of Procedure (Rule 9215), after a complaint is served, the respondent has 25 days to file an answer. If the respondent fails to answer within 25 days, FINRA may file a motion for default, and the hearing panel can issue a default decision. Extensions may be granted for good cause, but the standard deadline is 25 days. This is a commonly tested detail on the SIE exam.
Methodology
Computed from multiple-choice Lucky the Banker quiz-answer records joined to the checked-in public securities question banks. Only A–D selections whose stored correctness agrees with the current checked-in answer key are used. Challenge/free-response rows, unknown questions, missing identities, inconsistent rows, and configured internal or QA users are excluded. A question needs at least 15 answer records from 5 distinct users; its displayed distractor separately needs at least 5 selections from 5 distinct users. User identifiers are used only inside the aggregation boundary to enforce thresholds and are never returned.
Current gate: 15+ answers from 5+ learners per question, and 5+ selections from 5+ learners for the displayed distractor.
Limitations
- • This is usage data from Lucky the Banker practice, not a representative sample of all securities-exam candidates.
- • Selection frequency shows what was selected, not why an individual selected it; the evidence-based contrast uses only the checked-in question and explanation.
- • Repeated answers by the same user count as answer records, while the separate distinct-user threshold prevents one person from qualifying a result alone.
- • Questions or distractors below either privacy/sample threshold are withheld rather than extrapolated.
- • Question wording and answer keys can change; inconsistent stored rows are excluded against the current checked-in bank.