Securities Industries Essentials Exam (SIE) – With Questions & Answers (100% Verified)
Securities Industries Essentials Exam (SIE) – With Questions & Answers (100% Verified)
Federal Deposit Insurance Corporation (FDIC) - ANSWER - Created during the great depression in response to bank failu...
, Securities Industries Essentials Exam
(SIE) – With Questions & Answers
(100% Verified)
Federal Deposit Insurance Corporation (FDIC) - ANSWER - Created during the great
depression in response to bank failures.
an independent agency of the US federal government that preserves public
confidence in the banking system by insuring deposits.
The FDIC guarantees what - ANSWER - $250,000 for each deposit ownership
category in each insured bank.
Investors - ANSWER - someone who provides money or resources for an enterprise,
such as a corp, with the expectation of financial or other gain.
Investors:
Retail investors- - ANSWER - an individual who makes investments such as the
purchase of securities for his or her own personal account rather than for an
organization
Investors:
Institutional investor- - ANSWER - an entity that pools money to purchase securities
and other investment assets. (banks, insurance companies, pensions, hedge funds,
and mutual funds)
Investors:
Accredited Investor- - ANSWER - defined as:
a net worth of 1 million or more
has an annual income of 200K or more in each of the two most recent years
Broker-Dealer - ANSWER - each member firm broker-dealer operates under an
individualized membership agreement with FINRA or other SRO. The membership
agreement explains with lines of business the broker-dealer undertakes.
Full service BDs - ANSWER - offer all types of investment products: stocks, bonds,
mutual funds, options and many others
Carrying Firm - ANSWER - carries customer accounts and accepts funds and
securities from customers; carrying and clearing firms typically rank among the larger
broker-dealers.
A fully disclosed firm (introducing BD) - ANSWER - one that introduces its customers
to a clearing firm
, Prime Brokers - ANSWER - Prime account allows a customer to select one member
firm (prime broker) to provide custody and other services, while other firms -called
executing brokers- handle all trades placed by the customer.
Key Advantage: trading with multiple brokerage houses while still maintaining a
centralized master account
Capital Markets - ANSWER - The stock and bond markets.
Both public and private sectors sell securities in order to raise funds.
Primary Markets - ANSWER - Where securities are sold to investing public in what
are known as issuer transactions.
Secondary Market - ANSWER - where securities trade between investors; have one
investor selling securities to another and the issuer is not involved in the transaction
Third Market - ANSWER - Or NASDAQ Inter market
trading market in which exchange listed securities are traded in the OTC market.
All sec's listed on the NYSE and most sec's listed on the regional exchanges are
eligible for OTC trading.
Fourth Market - ANSWER - a market for institutional investors in which large blocks
of stock, both listed and unlisted, trade in transactions unassisted by broker-dealers
These take place through ECNs (electronic communication networks) and are open
24 hours a day and act solely as agents.
The FRB affects the money supply through its use of three policy tools: - ANSWER -
1. open-market ops (buying/selling government securities)
2. changes in the discount rate (on loans to member banks)
3. changes in reserve requirements
Monetary Policy: - ANSWER - is what FRB engages in when it attempts to influence
the money supply. The money supply is the capital available to be lent to consumers
and ultimately the money supply.
Fiscal Policy: - ANSWER - refers to governmental budget decisions enacted bu our
President and Congress including increases and decreases in:
1. federal spending
2. money raised through taxes
3. federal budget deficits or surpluses
(NOT considered the most efficient means to solve short-term economic problems
due to length of time it may take)
Securities and Exchange Commission (SEC) - ANSWER - The securities industry's
primary regulatory body. Broker-Dealers that transact securities business with
customer or with other broker-dealers must apply and be approved for registration.
SEC regulates all exchanges and trading markets.
Self-regulatory organizations - ANSWER - SROs - function UNDER the SEC's
oversight. Each SRO is accountable to the Commission for enforcing federal
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