SIE (Securities Industry Essentials) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Ace your Securities Industry Essentials (SIE) Exam with Examzify! Our practice exam features flashcards, multiple-choice questions with detailed explanations, and insightful tips to ensure your success.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.


Agreements to repurchase shares at no less than the original sales price in a public offering are:

  1. allowed under certain conditions

  2. prohibited as fraudulent and manipulative

  3. encouraged to stabilize market price

  4. only permitted for high-volume transactions

The correct answer is: prohibited as fraudulent and manipulative

Agreements to repurchase shares at no less than the original sales price in a public offering are prohibited as fraudulent and manipulative. This is because such agreements can artificially inflate the market price and mislead investors. Options A, C, and D are incorrect because they do not address the potential fraudulent and manipulative nature of such agreements. While agreements may be allowed under certain conditions, it is still considered fraudulent and manipulative. Encouraging agreements to stabilize market price goes against regulations that aim to prevent market manipulation. The option of only permitting high-volume transactions still does not address the potential for market manipulation. Option B is the most correct and comprehensive answer.