Securities Industry Essentials Exam with all Correct & 100%
Verified Answers |Latest Version |Already Graded A+
Broker-Dealer that doesn't comply is subject to: ✔Correct Answer--censure
-limits on activities
-suspension
-revocation of reg
-fine
FINRA ✔Correct Answer-regulates all matters related to investment banking, trading in the
OTC market, trading in the NYSE listed securities, and the conduct of FINRA member firms and
associated persons
FINRA Purpose ✔Correct Answer--promote investment banking and securities business
-provide medium for communication among its members
-adopt, admin, and enforce rules designed to prevent fraud
-promote self-discipline among members
MSRB (MUNICIPAL SECURITIES REGULATORY BOARD) ✔Correct Answer--regulates all matters
related to the underwriting and trading of state and municipal securities
-depends on other SROs for enforcement ability
Federal Reserve ✔Correct Answer--12 regional Fed reserve banks and hundreds of national
and state banks that belong to the system
-determines monetary policy and takes actions to implement policies including 1. acting as an
agent of treasury 2. regulating US money supply 3. setting reserve requirements 4. supervising
the printing of currency 5. clearing fund transfers
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
-basic coverage under is no more than 500k per separate customer
Federal Deposit Insurance Corporation (FDIC) ✔Correct Answer--the government agency that
insures customer deposits if a bank fails
-accounts covered up to 250k
Accredited Investor ✔Correct Answer--has a net worth of 1 million or more, not including net
equity
-has had an annual income of 200k or more in each of the two most recent years
, Carrying Firm ✔Correct Answer--carries customer accounts and accepts funds and securities
from customers
-largest broker-dealers
fully disclosed firm ✔Correct Answer--a firm that introduces into customers to a clearing firm
prime account ✔Correct Answer--type of account that allows a customer to select one
member firm to provide custody and other services while other firms-called executing brokers-
handle all trades placed
-key advantage is that it usually provides a client with the ability to trade with multiple
brokerage houses
Municipal Advisor ✔Correct Answer--provides advice with respect to municipal products or
the issuance of municipal securities, including advice with respect to structure, timing, terms,
and other similar matters
Transfer Agents ✔Correct Answer--ensures securities are issued in the correct owners name
-cancels all old and issues new certificates
-maintain records of ownership
-handle problems related to lost, stolen or destroyed certificates
primary market ✔Correct Answer-market for selling financial assets that can only be
redeemed by the original holder
Third Market ✔Correct Answer-off-exchange market for securities listed on an organized
exchange
Fourth Market ✔Correct Answer--market for institutional investors in which large blocks of
stock, both listed and unlisted trade in transactions unassisted by broker-dealers
Federal Reserve affects money supply through: ✔Correct Answer--open-market operations
-changes in the discount rate
-changes in reserve requirements
Keynesian economics ✔Correct Answer--active government involvement is vital
-government affects levels of spending and saving by taxes
-demand for goods drives employment and prices
monetarist theory ✔Correct Answer--believe the money supply is the major determinant of
price levels
-amount of money is the system is a major influence on economic performance
supply side economics ✔Correct Answer--government should allow market forces to
determine price of all goods
Verified Answers |Latest Version |Already Graded A+
Broker-Dealer that doesn't comply is subject to: ✔Correct Answer--censure
-limits on activities
-suspension
-revocation of reg
-fine
FINRA ✔Correct Answer-regulates all matters related to investment banking, trading in the
OTC market, trading in the NYSE listed securities, and the conduct of FINRA member firms and
associated persons
FINRA Purpose ✔Correct Answer--promote investment banking and securities business
-provide medium for communication among its members
-adopt, admin, and enforce rules designed to prevent fraud
-promote self-discipline among members
MSRB (MUNICIPAL SECURITIES REGULATORY BOARD) ✔Correct Answer--regulates all matters
related to the underwriting and trading of state and municipal securities
-depends on other SROs for enforcement ability
Federal Reserve ✔Correct Answer--12 regional Fed reserve banks and hundreds of national
and state banks that belong to the system
-determines monetary policy and takes actions to implement policies including 1. acting as an
agent of treasury 2. regulating US money supply 3. setting reserve requirements 4. supervising
the printing of currency 5. clearing fund transfers
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
-basic coverage under is no more than 500k per separate customer
Federal Deposit Insurance Corporation (FDIC) ✔Correct Answer--the government agency that
insures customer deposits if a bank fails
-accounts covered up to 250k
Accredited Investor ✔Correct Answer--has a net worth of 1 million or more, not including net
equity
-has had an annual income of 200k or more in each of the two most recent years
, Carrying Firm ✔Correct Answer--carries customer accounts and accepts funds and securities
from customers
-largest broker-dealers
fully disclosed firm ✔Correct Answer--a firm that introduces into customers to a clearing firm
prime account ✔Correct Answer--type of account that allows a customer to select one
member firm to provide custody and other services while other firms-called executing brokers-
handle all trades placed
-key advantage is that it usually provides a client with the ability to trade with multiple
brokerage houses
Municipal Advisor ✔Correct Answer--provides advice with respect to municipal products or
the issuance of municipal securities, including advice with respect to structure, timing, terms,
and other similar matters
Transfer Agents ✔Correct Answer--ensures securities are issued in the correct owners name
-cancels all old and issues new certificates
-maintain records of ownership
-handle problems related to lost, stolen or destroyed certificates
primary market ✔Correct Answer-market for selling financial assets that can only be
redeemed by the original holder
Third Market ✔Correct Answer-off-exchange market for securities listed on an organized
exchange
Fourth Market ✔Correct Answer--market for institutional investors in which large blocks of
stock, both listed and unlisted trade in transactions unassisted by broker-dealers
Federal Reserve affects money supply through: ✔Correct Answer--open-market operations
-changes in the discount rate
-changes in reserve requirements
Keynesian economics ✔Correct Answer--active government involvement is vital
-government affects levels of spending and saving by taxes
-demand for goods drives employment and prices
monetarist theory ✔Correct Answer--believe the money supply is the major determinant of
price levels
-amount of money is the system is a major influence on economic performance
supply side economics ✔Correct Answer--government should allow market forces to
determine price of all goods
