SIE Exam question with complete solution graded A+ 2023

SIE Exam question with complete solution graded A+ 2023purpose of securities industry - correct answer matching investors with money to issuers that need that money to finance issuer - correct answer legal entity that sells securities in order to finance its operations (business, governments) ie. us treasury, us gov agencies, foreign governments, state and local governments, corps, banks methods issuers use to raise capital - correct answer 1) issue debt securities (bonds) and 2) issues equity securities (stocks) debt securities - correct answer publically traded loans = bonds, notes, or debt instruments. The person loaning money/buying a bond is considered a creditor to the issuer and the amount they paid for is the principal that the issuer owes them and also makes interest payments throughout the duration of the loan -can be issued by banks, corps, etc equity securities (common vs preferred) - correct answer raise capital by issuing stock (equity), this time when you buy this, you have ownership in the company and if the company is profitable then you may be entitled to a portion of the profits (this is received through dividend distribution). differs from bonds bc 1) typically no maturity date and 2) dividend payments are optional -only banks/corporations sell these and can do so publically or privately to specific group of investors preferred=paid a predetermined dividend (usually received first and higher than those of common holders, but don't get a vote in company matters) common=paid a dividend based on company fortunes broker dealer = brokerage firm (2 capacities) - correct answer 2 capacities