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Free Series 57 – Securities Trader Exam Exam Questions and Answers
Last updated: January 14, 2025
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Series 57 – Securities Trader Exam
#Question
A trader executes a stop order when the price reaches a specified point. What is the objective?
A.To secure profits
B.To exit a position
C.To minimize risk
D.To initiate buying
Correct Answer:
C
A stop order is designed to minimize risk by triggering a sale once a specified price is hit.
#Question
When evaluating stocks, what does the term 'blue-chip' refer to?
A.Stocks with high dividends
B.Recently launched companies
C.High-risk stocks
D.Stocks from well-established companies
Correct Answer:
D
Blue-chip stocks are shares of well-established companies known for their reliability and strong performance.
#Question
A trader facing a margin call must do which of the following?
A.Increase margin limits
B.Close out positions
C.Sell assets without restrictions
D.Buy more securities
Correct Answer:
B
Faced with a margin call, the trader must either deposit more cash or close positions to meet margin requirements.
#Question
If a trader employs a contrarian strategy, what might they do?
A.Invest against prevailing sentiment
B.Increase their portfolio
C.Follow market trends
D.Sell underperforming assets
Correct Answer:
A
A contrarian strategy involves going against market sentiments, buying when others are selling.
#Question
A trader is assessing liquidity. What is a common indicator of liquidity in a market?
A.Bid-ask spread
B.Dividend yield
C.Price-to-earnings ratio
D.Earnings per share
Correct Answer:
A
The bid-ask spread is a key indicator of liquidity, reflecting the difference between buy and sell prices.
#Question
What is a primary function of the Financial Industry Regulatory Authority (FINRA)?
A.Regulate stock prices
B.Monitor interest rates
C.Ensure fair trading practices
D.Manage monetary policy
Correct Answer:
C
FINRA is responsible for regulating broker-dealers and enforcing fair trading practices.
#Question
A trader uses the Fibonacci retracement tool. What are they analyzing?
A.Market trends
B.Price retracements
C.Economic indicators
D.Company earnings
Correct Answer:
B
The Fibonacci retracement tool is used in technical analysis to predict price retracement levels.
Series 57 – Securities Trader Exam
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