SIE Final Exam Prep Flashcards
Primary Market Where new securities are issued and sold; issuer receives proceeds.
Secondary Market Where existing securities trade between investors; issuer receives no proceeds.
IPO (Initial Public Offering) The first sale of a company's stock to the public.
Underwriter An investment bank that helps an issuer bring securities to market.
Syndicate A group of underwriters sharing the work and risk of an offering.
Prospectus The legal disclosure document for a new securities offering.
Securities Act of 1933 Governs the primary market, requiring registration and full disclosure.
Securities Exchange Act of 1934 Governs the secondary market and created the SEC.
SEC The top federal regulator of the securities industry.
FINRA The SRO that oversees broker-dealers and registered representatives.
SRO (Self-Regulatory Organization) An industry body that regulates its members under SEC oversight.
SIPC Protects customer cash and securities up to $500,000 if broker-dealer fails.
Federal Reserve (The Fed) The U.S. central bank that sets monetary policy.
FOMC The Fed body that sets target interest rates and conducts open market
operations.
Monetary Policy Central bank actions managing interest rates and money supply.
Fiscal Policy Government taxing and spending decisions influencing the economy.
, SIE Final Exam Prep Flashcards
Federal Funds Rate The overnight lending rate between banks for reserve balances.
Discount Rate The interest rate the Fed charges banks to borrow directly.
Business Cycle Economic phases: expansion, peak, contraction, and trough.
Recession Defined as two consecutive quarters of declining GDP.
Inflation General rise in prices eroding purchasing power, measured by CPI.
Yield Curve Graph of bond yields across maturities; inverted signals possible recession.
GDP Gross Domestic Product; the total value of goods and services produced.
Broker vs. Dealer Brokers act as agents for commissions; dealers trade from inventory as
principals.
Market Maker A dealer continuously quoting bid/ask prices to provide liquidity.
Bid, Ask, and Spread Bid is buy price, ask is sell price, spread is the difference.
Common Stock Equity ownership with voting rights, variable dividends, and last liquidation claim.
Preferred Stock Equity with fixed dividends and liquidation priority over common stock.
Dividend A distribution of company earnings to shareholders declared by the board.
Rights (Preemptive Rights) Short-term rights for existing shareholders to buy new stock at a discount.
Warrant A long-term right to buy stock at a specified exercise price.
ADR (American Depositary Receipt) A receipt representing shares of a foreign company trading on U.S. exchanges.
Primary Market Where new securities are issued and sold; issuer receives proceeds.
Secondary Market Where existing securities trade between investors; issuer receives no proceeds.
IPO (Initial Public Offering) The first sale of a company's stock to the public.
Underwriter An investment bank that helps an issuer bring securities to market.
Syndicate A group of underwriters sharing the work and risk of an offering.
Prospectus The legal disclosure document for a new securities offering.
Securities Act of 1933 Governs the primary market, requiring registration and full disclosure.
Securities Exchange Act of 1934 Governs the secondary market and created the SEC.
SEC The top federal regulator of the securities industry.
FINRA The SRO that oversees broker-dealers and registered representatives.
SRO (Self-Regulatory Organization) An industry body that regulates its members under SEC oversight.
SIPC Protects customer cash and securities up to $500,000 if broker-dealer fails.
Federal Reserve (The Fed) The U.S. central bank that sets monetary policy.
FOMC The Fed body that sets target interest rates and conducts open market
operations.
Monetary Policy Central bank actions managing interest rates and money supply.
Fiscal Policy Government taxing and spending decisions influencing the economy.
, SIE Final Exam Prep Flashcards
Federal Funds Rate The overnight lending rate between banks for reserve balances.
Discount Rate The interest rate the Fed charges banks to borrow directly.
Business Cycle Economic phases: expansion, peak, contraction, and trough.
Recession Defined as two consecutive quarters of declining GDP.
Inflation General rise in prices eroding purchasing power, measured by CPI.
Yield Curve Graph of bond yields across maturities; inverted signals possible recession.
GDP Gross Domestic Product; the total value of goods and services produced.
Broker vs. Dealer Brokers act as agents for commissions; dealers trade from inventory as
principals.
Market Maker A dealer continuously quoting bid/ask prices to provide liquidity.
Bid, Ask, and Spread Bid is buy price, ask is sell price, spread is the difference.
Common Stock Equity ownership with voting rights, variable dividends, and last liquidation claim.
Preferred Stock Equity with fixed dividends and liquidation priority over common stock.
Dividend A distribution of company earnings to shareholders declared by the board.
Rights (Preemptive Rights) Short-term rights for existing shareholders to buy new stock at a discount.
Warrant A long-term right to buy stock at a specified exercise price.
ADR (American Depositary Receipt) A receipt representing shares of a foreign company trading on U.S. exchanges.
