SIE (Securities Industry Essentials) Practice Exam

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Which of the following statements is true about all U.S. government agency issues?

They are exempt from registration under the Securities Act of 1933
They offer a guaranteed rate of return
They are fully taxable at the local, state, and federal levels
They are available only to non-U.S. investors

The correct answer is: They are exempt from registration under the Securities Act of 1933

All U.S. government agency issues are exempt from registration under the Securities Act of 1933, which means they are not required to go through the usual registration process with the Securities and Exchange Commission. This exemption is based on the belief that government-issued securities are already guaranteed to be safe investments. The other options are incorrect because - Option B: Not all U.S. government agency issues offer a guaranteed rate of return. This may be true for some, but not all, depending on the type and terms of the security. - Option C: U.S. government agency issues are not always fully taxable at all levels. Some may be tax-exempt at the federal level or even at the state and local levels. - Option D: U.S. government agency issues are available to both U.S. and non-U.S. investors, as long as they meet certain eligibility requirements. They are not exclusive to non-U.S. investors.