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.

What are 'Blue Chip' stocks associated with?

High-risk, high-return investments
Stocks under investigation for fraudulent activity
Stocks that consistently produce income and modest growth over long periods of time
Newly listed companies on the stock exchange

The correct answer is: Stocks that consistently produce income and modest growth over long periods of time

Blue Chip stocks are traditionally defined as the stocks of large, well-established companies with a strong financial track record. These companies are typically industry leaders with a proven history of stable earnings and consistent dividend payments. This is why the correct answer is C. Option A is incorrect because 'Blue Chip' stocks are not known for being high-risk investments. On the contrary, they are seen as more stable and less risky compared to other types of stocks. Option B is also incorrect because 'Blue Chip' stocks are associated with reputable and established companies, and not those under investigation for fraudulent activity. Option D is incorrect because 'Blue Chip' stocks are not necessarily tied to newly listed companies. In fact, they are often well-established companies that have been trading on the stock exchange for many years.