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Finra SIE Exam - Topic 1 Question 24 Discussion

Actual exam question for Finra's SIE exam

Question #: 24
Topic #: 1

[All SIE Questions]

Which of the following statements is true regarding the ownership of investment company shares held as tenants in common?

AAll tenants must sign redemption requests.

BAny income is distributed evenly among the tenants.

CEach tenant has a fractional interest in the investment.

DUpon the death of a tenant, all shares in the account are taxable in the estate of the deceased.

Show Suggested Answer

Suggested Answer: C

Step by Step

Tenants in Common: In this arrangement, each tenant owns a fractional interest in the account's assets, which can be unequal depending on the agreement.

Income Distribution: Income is distributed based on ownership percentage, not necessarily equally.

Redemption Requests: Only the owner of the fractional interest has authority to request redemption for their portion.

Estate Taxation: Upon the death of a tenant, only their fractional interest is taxable in their estate.

FINRA Guidelines on Joint Accounts: FINRA Joint Accounts.

by Yvonne at May 16, 2026, 05:35 PM

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Mona

2 hours ago

C is definitely true, each tenant has a fractional interest.

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Iraida

5 days ago

I vaguely recall that upon a tenant's death, the shares might not be taxable in their estate. So, I’m leaning away from D.

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Ocie

10 days ago

I feel like option B could be misleading. Income distribution might not always be even among tenants, right?

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Octavio

16 days ago

I'm not entirely sure, but I remember something about redemption requests needing all signatures. Is that A?

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Kanisha

2 months ago

I think option C is correct because each tenant typically has a fractional interest in the investment. That sounds familiar from our study materials.

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