Primerica SIE Exam

Registration with FINRA

- Broker-Dealers - Associated persons - Registered Rep - Principal (mgr of any part of a members investment banking or securities biz) - Fingerprint records

Balance Sheet

- Communicate with investor - Portfolio list - Income statement - Compensation - Total securities bought and sold - Semiannually

Trade Settlement

- Dates, times for each type of transaction - Established by FINRA Uniform Practice Code

Securities Act of 1933

- Governs new issuance market which involves the money-raising activities - Requires issuers to register their securities when selling to public

Lagging Indicators

- IDs short vs long term trends - Profits, outstanding corp loans, ave length of unemployment

Broker Loan Rate

- Interest rate BD pay for money borrowed for margin accounts - Usually a % point above short term rates

Federal Funds Rate

- Interest rates commercial money banks charge each other - Overnight loans $1 million or more - Most volatile

Prime Rate

- Interest rates commerical money banks charge - Most creditworthy corp unsecured loans

Capital Gains

- Long term realized capital gains (12+ months) - Short term capital gains distributed with income (less than 12 months) - Unrealized capital gains not taxable

Cash Dividends on Bonds

- Owner receives a check - Taxed in year distributed

Stock Dividends on Bonds

- Owner receives additional stock - Taxed at distribution

Dividends on Bonds

- Qualified, taxed at max rate - Non-qualified, taxed at ordinary income

Cash Settlement

- Same day as trade - MM securities - Stocks and bonds sold for cash

Ordinary income

- Taxed at marginal tax rate - Tips, bonuses

Seller and Buyers Option

- Trade settles as defined in contract - Available when customer wants to sell a security, but cannot deliver in time for regular way settlement - Trade can settle any day from 4th business day - contract date. Buyer must be given one day notice.

Coincident Indicators

- Where is the economy is - Gross Domestic Product

Leading Indicator

- Where the economy is going - Spot checks of biz activity - Unemployment claims

C.R.D.

Central Registration Depository

Stagflation

Combo of inflation, high unemployment, no growth

Fiscal Policy

Established by Congress and the President

Monetary Policy

Established by Federal Reserve Board (FRB) to control inflation

F.O.M.C.

Federal Open Market Committee

G.D.P.

Gross Domestic Product

Inflation

Increase in prices

Clerical Person

Ministerial, those selling only Mutual Funds, VA or DPPs

N.A.V.

Net Asset Value

P.O.P.

Public Offering Price

S.E.C

Securities & Exchange Commission - Primary securities regulator - Reporting companies - Self-regulatory orgs - Broker-dealers

Deflation

Severe recession, unemployment rising

Stagnation

Slow or little economic growth, high unemployment

S.A.I.

Statement of Additional Information

Interest on Bonds

Taxed as ordinary income