SIE Exam Prep: Investment Returns

Passing the SIE exam is the first step to becoming a registered securities representative. The SIE exam covers a wide range of topics, including investment returns. In this blog post, we will discuss the different components of investment returns and how they are measured. We will also cover dividend payment dates and cost basis requirements. Finally, we will provide an overview of benchmarks and indices.


Whether you are studying for the SIE exam or looking to improve your understanding of investment returns, this post will be a valuable resource. So, let’s get started!


Investment returns can be broadly categorized into two components: realized gains and unrealized gains. Realized gains refer to profits that are generated from the sale of an asset, while unrealized gains represent the potential value increase in an asset that has not yet been sold.


In addition to these components, there are several different types of dividends that can impact investment returns. Cash dividends refer to payments made by companies directly to investors, while stock dividends involve issuing additional shares in lieu of cash payments. Other dividend types include special dividends and qualified dividends, which may have specific requirements in order to qualify for favorable tax treatment.


To understand the impact of dividend payments on investment returns, it is also important to be familiar with dividend payment dates. The record date refers to the date by which a shareholder must be recorded in the company’s books in order to receive their dividends. The ex-dividend date, meanwhile, marks the first day that shares are traded without taking into account any pending dividend payments. Finally, the payable date marks the last day that dividends can be paid out by companies before they become delinquent.


In addition to understanding these components and concepts related to investment returns, it is also important to know about cost basis requirements. This term refers to how an investor needs to track and report capital gains in order to remain compliant with tax regulations. Common cost basis requirements include tracking the purchase price of an investment, as well as any associated fees and commissions.


Finally, it is essential to be familiar with different benchmarks and indices used for measuring investment performance. These tools are commonly used to compare the returns generated by different financial instruments or portfolios over a period of time. Some popular examples of benchmarks and indices in the securities industry include the S&P 500 index, the Dow Jones Industrial Average, and the Barclays Aggregate Bond Index.


Keep in mind that these are not the only topics that will be covered on the SIE exam. You will need to know a wide range of other concepts and theories related to the world of securities and investments in order to succeed on this challenging exam. Some topics include financial statement analysis, capital markets and pricing theory, portfolio management, and regulatory requirements. With the right SIE exam prep materials and a strong dedication to your studies, you can be well on your way to passing the SIE and pursuing your career in the securities industry. Achievable offers free FINRA SIE exam practice to prepare you for the SIE Exam. Check out Achievable’s website today to get started!