SIE VOCABULARY
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
529 Plan - ANS-A 529 Plan provides tax advantages when saving and paying for higher
education. There are two major types, prepaid tuition and savings plans.
529 Prepaid Tuition Plan - ANS-Is a way to pay the cost of tomorrow's college-inflated
tuition prices at current costs. These plans allow you to pay for a certain number of
semesters that can be redeemed in the future.
529 Savings Plan - ANS-A tax-advantaged method of saving for future college expenses.
Are sponsored by states, state agencies, or educational institutions, and may be used
to cover a recipient's tuition, room, board, books, computers and other expenses.
ABLE Account - ANS-An ABLE account is a tax-advantaged savings account available to
individuals diagnosed with significant disabilities before age 26. Contributions can be
made to the account by the beneficiary, friends or family members, but the total
annual contribution must not exceed a certain limit.
Accredited Investor - ANS-An accredited investor is a person or entity that can deal
with securities not registered with financial authorities by satisfying one of the
requirements regarding income, net worth, asset size, governance status or
professional experience. Accredited investors include natural individuals, banks,
insurance companies, brokers and trusts.
American Depositary Receipts (ADRs) - ANS-An ADR is a negotiable certificate issued
by a US bank representing a specified number of shares in a foreign stock traded on a
US exchange.
, Asset-Backed Security - ANS-Is a financial security collateralized by a pool of assets
such as loans, leases, credit card debt, royalties or receivables. They are an alternative
to investing in corporate debt. Asset-backed securities allow issuers to generate more
cash, which, in turn, is used for more lending while giving investors the opportunity to
invest in a wide variety of income-generating assets.
Basis Point - ANS-A measure of a bond's yield, equal to 1/100 of 1% of yield. A bond
whose yield increases from 5.0% to 5.5% is said to increase by 50 basis points.
Bear - ANS-An investor who acts on the belief that a security or the market is falling or
will fall.
Breakpoints - ANS-Breakpoint, for load mutual funds, is the dollar amount for the
purchase of the fund's shares that qualifies the investor for a reduced sales charge.
Breakpoints offer investors a discount for making larger investments.
Broker-Dealers - ANS-A broker-dealer is a person or firm in the business of buying and
selling securities for its own account or on behalf of its customers. The term broker-
dealer is used in US securities regulation parlance to describe stock brokerages,
because most of them act as both agents and principles. Broker-dealers fulfill several
important functions in the financial industry. These include providing investment
advice to customers, supplying liquidity through market making activities, facilitating
trading activities, publishing investment research and raising capital for companies.
Bull - ANS-An investor who acts on the belief that a security or the market is rising or
will rise.
Capital - ANS-Accumulated money or goods available for use in producing more money
or goods.
Cash Account - ANS-An account in which the customer is required by the SEC's
regulation T to pay in full for the securities purchased not later than two days after the
standard payment period set by the Uniform Practice Code.
Cash Dividend - ANS-Money paid to a corporation's stockholders out of the
corporation's current earnings or accumulated profits. The board of directors must
declare all dividends.
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
529 Plan - ANS-A 529 Plan provides tax advantages when saving and paying for higher
education. There are two major types, prepaid tuition and savings plans.
529 Prepaid Tuition Plan - ANS-Is a way to pay the cost of tomorrow's college-inflated
tuition prices at current costs. These plans allow you to pay for a certain number of
semesters that can be redeemed in the future.
529 Savings Plan - ANS-A tax-advantaged method of saving for future college expenses.
Are sponsored by states, state agencies, or educational institutions, and may be used
to cover a recipient's tuition, room, board, books, computers and other expenses.
ABLE Account - ANS-An ABLE account is a tax-advantaged savings account available to
individuals diagnosed with significant disabilities before age 26. Contributions can be
made to the account by the beneficiary, friends or family members, but the total
annual contribution must not exceed a certain limit.
Accredited Investor - ANS-An accredited investor is a person or entity that can deal
with securities not registered with financial authorities by satisfying one of the
requirements regarding income, net worth, asset size, governance status or
professional experience. Accredited investors include natural individuals, banks,
insurance companies, brokers and trusts.
American Depositary Receipts (ADRs) - ANS-An ADR is a negotiable certificate issued
by a US bank representing a specified number of shares in a foreign stock traded on a
US exchange.
, Asset-Backed Security - ANS-Is a financial security collateralized by a pool of assets
such as loans, leases, credit card debt, royalties or receivables. They are an alternative
to investing in corporate debt. Asset-backed securities allow issuers to generate more
cash, which, in turn, is used for more lending while giving investors the opportunity to
invest in a wide variety of income-generating assets.
Basis Point - ANS-A measure of a bond's yield, equal to 1/100 of 1% of yield. A bond
whose yield increases from 5.0% to 5.5% is said to increase by 50 basis points.
Bear - ANS-An investor who acts on the belief that a security or the market is falling or
will fall.
Breakpoints - ANS-Breakpoint, for load mutual funds, is the dollar amount for the
purchase of the fund's shares that qualifies the investor for a reduced sales charge.
Breakpoints offer investors a discount for making larger investments.
Broker-Dealers - ANS-A broker-dealer is a person or firm in the business of buying and
selling securities for its own account or on behalf of its customers. The term broker-
dealer is used in US securities regulation parlance to describe stock brokerages,
because most of them act as both agents and principles. Broker-dealers fulfill several
important functions in the financial industry. These include providing investment
advice to customers, supplying liquidity through market making activities, facilitating
trading activities, publishing investment research and raising capital for companies.
Bull - ANS-An investor who acts on the belief that a security or the market is rising or
will rise.
Capital - ANS-Accumulated money or goods available for use in producing more money
or goods.
Cash Account - ANS-An account in which the customer is required by the SEC's
regulation T to pay in full for the securities purchased not later than two days after the
standard payment period set by the Uniform Practice Code.
Cash Dividend - ANS-Money paid to a corporation's stockholders out of the
corporation's current earnings or accumulated profits. The board of directors must
declare all dividends.
