Securities Industry Essential UPDATED Actual Exam Questions and CORRECT Answers
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Securities Industry Essential
Institution
Securities Industry Essential
Securities Industry Essential UPDATED
Actual Exam Questions and CORRECT
Answers
Securities and Exchange Commission (SEC)CORRECT ANSWER- Regulates securities
market, exchanges and all trading markets
Financial Industry Regulatory Authority (FINRA)CORRECT ANSWER- Largest non
government regu...
Securities Industry Essential UPDATED
Actual Exam Questions and CORRECT
Answers
Securities and Exchange Commission (SEC)CORRECT ANSWER✔✔- Regulates securities
market, exchanges and all trading markets
Financial Industry Regulatory Authority (FINRA)CORRECT ANSWER✔✔- Largest non
government regulator who focuses on investment banking, OTC market, NYSE and most
economic entities
Chicago Board Options Exchange (CBOE)CORRECT ANSWER✔✔- The largest national
option exchange
Municipal Securities Rulemaking Board (MSRB)CORRECT ANSWER✔✔- A self-
regulatory organization that regulates the issuance and trading of municipal securities. The
Board functions under the Securities and Exchange Commission's supervision; it has no
enforcement powers. Related item(s): Securities Acts Amendments of 1975.
U.S. Department of the TreasuryCORRECT ANSWER✔✔- an executive department of the
United States government whose purpose is to manage the government's money. It is
administered by the Secretary of State and the IRS is a branch of it.
Federal Reserve Board(FRB)CORRECT ANSWER✔✔- A banking system consisting of 12
major banks and a number of other smaller ones who all meet money requirements.
This entity determines monetary policy.
monetary policyCORRECT ANSWER✔✔- The setting of the money supply by policymakers
in the central bank.
Effects on Money Supply; Open market Operations are the buying and selling of Govt.
Securities. Change of discount ranks to banks(trickle down to public). Change in reserve
requirements.
,Securities Investor Protection Corporation (SIPC)CORRECT ANSWER✔✔- a nonprofit
corporation, created by Congress and subject to SEC and congressional oversight, that insures
customer accounts against the financial failure of a brokerage firm.(up to 500,000$ in
securities and 250,000 cash per account)
If registered with SEC must also be registered with this(unless municipality, federal securities
or redeem investment opportunist)
Oversees the liquidation of a brokerage firm going out of business
Federal Deposit Insurance Corporation (FDIC)CORRECT ANSWER✔✔- an agency created
in 1933 to insure individuals' bank accounts, protecting people against losses due to bank
failures.
Banks must pay a premium to be apart of this
If a bank goes under this organization will cover up to 250,000 or transfer the account to
another account
retail investorCORRECT ANSWER✔✔- Individuals put money into the market for
themselves.
institutional investorsCORRECT ANSWER✔✔- Large organizations such as pension funds
or mutual funds that invest their own funds or the funds of others.
accreditied investorCORRECT ANSWER✔✔- an investor who has net worth of 1 million $,
and has an annual income of 200,000$
OR
officers and issuers of securities
Full-service brokerage firmCORRECT ANSWER✔✔- a brokerage firm that offers
investment advice and executes transactions
Limited Service Brokerage FirmCORRECT ANSWER✔✔- Can only trade specific securities
,market makersCORRECT ANSWER✔✔- securities dealers that make a commitment to
continuously offer to buy and sell the stock of a specific corporation listed on the NASDAQ
exchange or traded in the OTC market
Carrying/Clearing FirmCORRECT ANSWER✔✔- does all of the back office work for
transactions of securities
Introducing Firm (fully disclosed basis to another firm)CORRECT ANSWER✔✔- Introduce
customers to carrying firms(who act as back office and hold funds in their name)
Prime BrokerageCORRECT ANSWER✔✔- this type of firm is the central account and will
consolidate all work of other firms for the ease of the client
Investment AdvisorCORRECT ANSWER✔✔- -any person that, for compensation, engages
in the business of providing others with securities related advice
-Must register because of the "Investment Advisers Act 1940"
-Agents must pass series 65/66 and Reps must pass Series 7
Municipal AdvisorCORRECT ANSWER✔✔- Provides advice on Municipalities and solicits
their issuance
IssuerCORRECT ANSWER✔✔- the individual or business organization offering a security
for sale to the public
underwriting syndicateCORRECT ANSWER✔✔- a group of investment banks that share the
obligations of underwriting securities
custodianCORRECT ANSWER✔✔- a bank that holds assets in their account on behalf of
another individual
TrusteeCORRECT ANSWER✔✔- manages someone else's account for their benefit
, Transfer AgentsCORRECT ANSWER✔✔- Maintain record of shareholders, issue new
certificates and cancel old certificates
Assures the transactions are issued correctly
Depository Institutions/Clearing CorporationsCORRECT ANSWER✔✔- the intermediate
between buyer and seller
capital marketCORRECT ANSWER✔✔- A stock or a bond market where firms can raise
capital through issuing securities
secondary marketCORRECT ANSWER✔✔- market for reselling financial assets
Third MarketCORRECT ANSWER✔✔- exchange-listed stock traded OTC primarily by
institutional investors
Fourth MarketCORRECT ANSWER✔✔- the trading of securities directly between investors
without the involvement of brokers or dealers
fiscal policyCORRECT ANSWER✔✔- A government policy for dealing with the budget
(especially with taxation and borrowing)
-Takes a very long time
(M1)Money SupplyCORRECT ANSWER✔✔- Highly liquid supply of money(generally
checking accounts and actual cash)
-Largest percent of money in the market
(M2)Money SupplyCORRECT ANSWER✔✔- Relatively Easy to liquidate supply of money
-Leading indicator of economic activity
-Time deposits >10,000$
-savings account, repurchase, CD's, Money market
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