Section 1: Knowledge of Capital Markets - ANSWER
The SEC
purpose/mission
when created
jurisdiction
authority - ANSWERprotect investos, maintin fair orderly & efficient markets, facilitate capital formation
by congress in 1934
US federal government
enforce federal security laws & cr...
what is the largest SRO? - ANSWERorganization formed to regulate certain professions & industires
to create rules that promote order among businesses& orgs, supplemental to laws/gov
FINRA
CBOE
jurisdiction? - ANSWERoriginated the VIX
Chicago board options exchange
,1st nationally recognized sec exchange listing and trading options.
(lgest option market)
SRO
IRS- US gov agency responsible for collecting most federal taxes and for administering tax rules and
regulations
State Regulators - ANSWERstate/local public service/utilities commission, insurance/annuity,
banking, company info, consumer protection
NASAA
what is it? - ANSWERNorth American Securities Administrators Association
oldest international investor protection organization
(a state regulator)
The Federal Reserve
fiscal or monetary policy?
composed of?
when tighten policy? - ANSWERthe central bank of the United States
control inflation/encourage employment, responsible for clearing checks & supplying currency, most
important to loan $ to other banks & set interest rates, make bank reserve requirements
independent body (meaning looks after broader interests rather than for ones own political interests)
lower rate= more money borrowed= more money in circulation
BOG (board of governors), 12 fed reserve banks, fed open market committee (FOMC=set monetary
policy)
BOD oversee Us municipal & responsible for setting/governing rules
support FINRA
SRO
Department of Treasury/IRS - ANSWERmanage federal finances by collecting taxes and paying bills &
managing currency/gov accs /public debt
backed by full faith and credit of US
Market Participants and Their Roles - ANSWER
Investors
accredited
institutional (ex)
retail - ANSWERcommit capital in expectation of receiving financial returns
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