Section 1: Knowledge of Capital Markets, Practice Questions
Section 1 of the SIE® exam, Knowledge of Capital Markets, is 16% of your score: 12 of the 75 scored questions. It covers who regulates the industry, how markets are structured, how securities come to market, and the economic forces that move them. Most of it is fact-recall rather than scenario work, which makes this the cheapest section to get right: learn the facts, drill them once, keep the points. Start with a mixed set drawn from all five topics:
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The five Section 1 topics
Regulators and SROs: 29 questions. The jurisdiction map: SEC over markets, FINRA over broker-dealers, MSRB writing municipal rules it can’t enforce itself, the Fed setting margin authority. Distractors live in the overlaps.
Market Structure: 29 questions. Primary vs. secondary markets, the first through fourth market vocabulary, exchanges vs. OTC, and where dark pools fit.
Offerings: 50 questions. The section’s deepest set: registered offerings vs. the exemptions (Reg D, Reg A, 144), IPO mechanics, and who counts as an underwriter.
Economic Factors: 32 questions. Monetary vs. fiscal policy, the yield curve shapes and what each signals, business cycles, and the indicator vocabulary.
SIPC vs. FDIC: 15 questions. A small set for a reliably tested pair: what each covers, the coverage limits, and the losses neither protects against.
How to attack this section
Drill Offerings and Regulators first: together they carry most of Section 1’s exam presence, and both reward straight memorization of who-does-what. Economic Factors is the one topic here where candidates overstudy: the exam wants direction-of-effect (“the Fed buys Treasuries: what happens to rates?”), not macroeconomic theory. The matching chapter of the SIE study guide covers the concepts in reading order if you’d rather see them explained before you’re graded on them.
Section 1 pairs naturally with Section 4: Overview of the Regulatory Framework, same fact-recall character, and together they’re only a quarter of the exam, so cap the calendar time accordingly. The weight lives in Section 2: Understanding Products and Their Risks and Section 3: Trading, Customer Accounts, and Prohibited Activities. For everything at once, browse all SIE practice questions by topic or take the free practice exam at real section weighting.
