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FINRA SIE practice tests

Free FINRA Securities Industry Essentials Practice Test

Our free FINRA Securities Industry Essentials (SIE) Practice Test was created by experienced educators who designed them to align with the official Financial Industry Regulatory Authority content guidelines. They were built to accurately mirror the real exam's structure, coverage of topics, difficulty, and types of questions.

Upon completing your free practice test, it will be instantly reviewed to give you an idea of your score and potential performance on the actual test. Carefully study your feedback to each question to assess whether your responses were correct or incorrect. This is an effective way to highlight your strengths and weaknesses across different content areas, guiding you on where to concentrate your study efforts for improvement on future tests. Our detailed explanations will provide the information you need to enhance your understanding of the exam content and help you build your knowledge base leading you to better test results.

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FINRA Securities Industry Essentials sample question

See how an exam-style question and its explanation appear in the Exam Edge practice environment.

An entry-level candidate compares a mutual fund with an annual expense ratio of 1.20% to an ETF with an annual expense ratio of 0.20%. If an investor places $50,000 in each product and holds each for 3 years with no investment gains or additional contributions, which outcome is correct?
Correct Answer:
The ETF will cost $1,500 less in total fees than the mutual fund over 3 years.

why rrect: expense ratios are expressed as an annual percentage of assets under management and, with no gains or withdrawals, the yearly fee equals the account value multiplied by the expense ratio. calculation steps:
yearly mutual fund fee = $50,000 × 1.20% = $50,000 × 0.012 = $600 per year.
yearly etf fee = $50,000 × 0.20% = $50,000 × 0.002 = $100 per year.
total mutual fund fees over 3 years = $600 × 3 = $1,800.
total etf fees over 3 years = $100 × 3 = $300.
difference = $1,800 − $300 = $1,500. therefore, the etf costs $1,500 less over 3 years.

why the other answers are incorrect:

  • a. incorrect — $1,200 is not the calculated difference; the correct difference is $1,500.
  • b. incorrect — $300 is the etf’s total 3-year fee, not the difference between the two products.
  • c. incorrect — the products do not incur the same fees because the expense ratios differ; proportional application still yields different dollar costs when rates differ.
  • d. correct — explains the step-by-step calculation and shows the etf is $1,500 cheaper over 3 years.