SIE Exam Chapters 1-5 Questions & Answers 2023/2024
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Course
SIE
Institution
SIE
SIE Exam Chapters 1-5 Questions & Answers 2023/2024
Bid - ANSWER-Represents a clients selling price
- This is the price at which the MM will buy
dealer to dealer markets - ANSWER-NASDAQ
-Non-physical; phone and computer network
- Negotiated market
- unlimited number of registered "market...
SIE Exam Chapters 1-5 Questions &
Answers 2023/2024
Bid - ANSWER-Represents a clients selling price
- This is the price at which the MM will buy
dealer to dealer markets - ANSWER-NASDAQ
-Non-physical; phone and computer network
- Negotiated market
- unlimited number of registered "market makers"
-Classified as a securities exchange
OTCBB (Bulletin Board) - ANSWER-Must be reporting companies
Third Market - ANSWER-- Listed securities traded otc
- Do not maintain an inventory
Issuers - ANSWER-Are legal entities that raise capital by issuing securities. These include:
Corporations
U.S. Treasury and Government Agencies
State and local governments
Banks
Foreign Governments
Equity - ANSWER-Used by corporations and banks
- represents ownership
Debt - ANSWER-Ex: Notes and bonds
,Represent and issuers promise to pay
Broker - ANSWER--Firm acts as a agent or conduit
- Finds another party willing to take the other side of trade
- Collect commission for the service
- No risk to the firm
Dealer - ANSWER--Firm acts as a principal
- Firm takes the other side of the trade
- Entitled to markup/markdown
- Risk= Using their own money to take the other side of the trade
Investment Banking - ANSWER--Issuance
- Acts as an underwriter
- Merger and Acquisition
- Private Equity
- Debt and equity capital markets
Research - ANSWER--Research reports on which companies should be bought or sold
Private Client - ANSWER-- Retail Brokerage
Sales and Trading - ANSWER--Fixed income
-Equity
-Bonds and debt
Market-Maker - ANSWER-Is a broker-dealer that chooses to display quotes to buy or sell a specific
amount of securities at specific prices
-Quotes are firm for at least 100 shares=round lots
, Make Spreads
Ask or Offer - ANSWER-Represents a clients purchase price
- This is the price at which the MM will sell
Investment Adviser - ANSWER-Is a firm that charges customers a fee for managing their securities
portfolios.
- The fee is based on the assets under management
- An IA is considered a large or institutional customer of a broker dealer
Municipal Advisor - ANSWER-Is a person or firm who advises municipalities on bond offerings and must
be registered with the SEC
- Typically advise issuers (ex: state, county or city) regarding the structure and timing of a new offering.
institutional investor - ANSWER-Customers with a large amount of assets
- Banks
- Insurance companies
- Investment companies
-corporations, partnerships
-Registered investment advisers
- public and private pension plans
-Hedge funds
Retail Investor - ANSWER-- Individual Investors who are not defined as institutional investors
Accredited Investors - ANSWER-Institutional investors as well as individuals who have met a financial test
- Net worth of $1,00,000 excluding primary residence
- Annual income of $200,000 in each of the last 2 years, $300,000 for married couples
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