PrepScoreSIE
Start free

SIE Debt Instruments

Debt instruments are the largest single topic on the SIE. The exam tests the mechanics of a bond — par value, coupon, maturity, and the inverse relationship between price and yield — plus how corporate, municipal and Treasury issues differ in tax treatment, credit risk and callability.

Practise this topic freeSee the full outline
Understanding Products and Their Risks · 44%391 questions6% hard
44%of the exam is Understanding Products and Their Risks, the section this topic sits in.
391questions on this topic in the PrepScore bank.
30%are understand-level questions — the dominant cognitive demand here.
11are EXCEPT / NOT items, where the answer is the odd one out.
What the SIE asks

What you actually need to know

  • Par, coupon and maturity, and why a bond bought at a discount yields more than its coupon.
  • The price–yield seesaw, and the order of current yield, nominal yield and yield to maturity at a discount or premium.
  • Corporate vs municipal vs Treasury: who issues them, how each is taxed, and what secures them.
  • Call and put features, and who benefits when rates move.
How this topic behaves

What 391 questions on it look like

33 of the 391 questions require arithmetic — 8% of the topic, against a low single-digit share across most of the exam. Practise these with a pen, not by reading.

11 questions are EXCEPT or NOT items. Reverse-worded questions are where careful candidates lose marks they had already earned; the fix is mechanical — read the stem twice before the options.

comparison44%
scenario26%
concept24%
calculation6%

Question-type mix across the 391 questions in this topic.

From the bank

Three real debt instruments questions

With the explanation — which is the part that teaches.

comparison · easy · recall

What does the par value of a typical corporate bond represent?

  1. AThe current market price at which the bond can be sold today
  2. BThe price floor below which the bond may never legally trade
  3. CThe total of all coupon payments the bond will make over its life
  4. DThe amount the issuer repays the bondholder at maturity, usually $1,000correct
Why D is correct

Par (face) value is the principal amount the issuer redeems at maturity, conventionally $1,000 for corporate bonds. Market price fluctuates and can be above or below par.

concept · easy · understand

Which description best identifies a Treasury bill?

  1. AA short-term Treasury security commonly issued at a discountcorrect
  2. BA long-term equity security with voting rights in the U.S. government
  3. CA municipal revenue bond backed by toll road receipts
  4. DA corporate preferred stock with a stated dividend
Why A is correct

Treasury bills are short-term U.S. government securities commonly issued at a discount. Treasury notes and bonds have longer maturities.

scenario · easy · apply

An investor buys a corporate bond from an issuer. Which issuer obligation is most directly associated with the bond?

  1. AThe issuer generally owes interest and principal according to the bond termscorrect
  2. BThe issuer gives the investor voting control over common shareholder meetings
  3. CThe issuer deposits FDIC-insured cash into the investor's brokerage account
  4. DThe issuer grants the investor a right to buy common stock at any market price
Why A is correct

A corporate bond is debt. The issuer's basic obligation is to pay interest and repay principal according to the bond's terms, subject to credit risk.

391 questions on this topic, free to start.

Every one carries the same kind of explanation. Ten a day at no cost, no card.

Create a free account
FAQ

Debt Instruments questions

What does par value mean on the SIE?

Par is the principal the issuer repays at maturity — conventionally $1,000 for a corporate bond. It is the base the coupon is calculated on, and it is not the same as the market price.

Why do bond prices fall when interest rates rise?

The coupon is fixed. When newly issued bonds pay more, an existing bond is only attractive at a lower price, so its price falls until its yield is competitive.

How much of the SIE is debt?

Debt instruments sit inside Understanding Products and Their Risks, the 44% section — the heaviest on the exam.
Last reviewed 2026-08-28. Exam facts sourced to FINRA’s SIE exam page and the FINRA SIE content outline. Question counts describe the PrepScore bank, not the exam.
Same section
Investment Risks318 questionsOptions266 questionsPackaged Products261 questionsEquity Securities246 questions

Practise debt instruments until the rule is automatic.

Real-format questions, an explanation on every answer, and a mistake bank that only clears when you get it right.

Start freeSee pricing