SIE Exam

SIE Exam

Accredited Investor

An individual or institution that

meets certain financial criteria and

is thereby allowed to invest in

certain types of investments not

available to the general public.

After-hours Trading

Trading of securities that occurs

after the official trading hours of a

stock exchange.

All-or-none Order (AON)

Alpha

A measure of an investment's

performance relative to a

benchmark, indicating the excess

return generated by an investment

compared to the market as a whole.

Alternative Investment

Investments in assets different

from traditional stocks, bonds, or

cash, such as real estate,

commodities, or hedge funds.

American Depository Receipt

(ADR)

A certificate representing a

specified number of shares in a

foreign stock that is traded on a

U.S. exchange.

Amortization

The process of gradually reducing a

debt through installment payments

of principal and interest.

Annuity

A financial product that provides

regular payments to the holder,

often used as a retirement income.

Arbitrage

The simultaneous buying and

selling of securities, currency, or

commodities in different markets to

take advantage of differing prices

for the same asset.

Arbitration

A method of resolving disputes

outside of court, where both parties

agree to abide by the decision of an

appointed arbitrator.

Ask Price

The lowest price at which a seller is

willing to sell a security.

Ask Spread

The difference between the ask

price of a security and its current

market price.

Asset Allocation

The strategy of dividing

investments among different kinds

of assets, such as stocks, bonds, and

cash, to achieve a desired risk and

return profile.

Asset Management

The professional management of

various securities and assets to

achieve specified investment

objectives.

Asset Turnover

The ratio of a company's sales to its

total assets, measuring how

effectively a company uses its assets

to generate sales.

Asset Turnover Ratio

A measure of a company's

efficiency in using its assets to

produce revenue.

Asset-Backed Securities

Financial securities backed by the

cash flows from a specific pool of

underlying assets, such as

mortgages or credit card

receivables.

Asset-backed Security

A financial security that represents

a claim on the cash flows from

specific assets.

At-the-money

An options term indicating that the

strike price is equal to the current

market price of the underlying

asset.

Auction Market

A market where buyers and sellers

enter competitive bids and offers

simultaneously.

Authorized Shares

The maximum number of shares

that a corporation is legally

permitted to issue.

Auction Rate Security

A debt security whose interest rate

is periodically reset through

auctions.

Authorized Stock

The total number of shares a

company is authorized to issue as

specified in its articles of

incorporation.

Average True Range

A technical analysis indicator that

measures price volatility by

calculating the difference between

high and low prices for a given

period.

Back-end Load

A fee or sales charge that is paid

when selling a mutual fund or other

investment.

Balance Sheet

A financial statement that provides

a snapshot of a company's assets,

liabilities, and shareholders' equity

at a specific point in time.

Balanced Fund

An investment fund that combines

a stock and a bond portfolio,

seeking both capital appreciation

and income.

Bar Chart

A type of chart that uses

rectangular bars to represent data;

in finance, often used to show the

performance of stocks.

Base Rate

The interest rate set by a country's

central bank, which influences

other interest rates in the economy.

Basis Point

One one-hundredth of a

percentage point (0.01%).

Bear Market

A market condition where stock

prices are declining, typically by

20% or more from recent highs.

Bearish

A pessimistic outlook or

expectation that a security's price

will decline.

Benchmark

A standard against which the

performance of a security, mutual

fund, or investment strategy can be

compared.

Beta

A measure of a stock's volatility in

relation to the overall market.

Bid Price

The maximum price a buyer is

willing to pay for a security.

Bid Spread

The difference between the bid

price of a security and its current

market price.

Bid-Ask Spread

The difference between the highest

price a buyer is willing to pay (bid)

and the lowest price a seller is

willing to accept (ask) for a security.

Block Trade

A large trading order, often

involving many shares, typically

negotiated off the trading floor or

through the OTC market.

Blue Chip Stock

A stock from a well-established and

financially sound company with a

history of stable earnings and

dividends.

Blue-Chip Stocks

Stocks representing companies

that are recognized for their

established record of stability,

reliability, and performance.

Bollinger Bands

A technical analysis tool consisting

of two bands (one above and one

below) and a moving average line,

indicating volatility and price

momentum.

Bond

A debt security that represents an

agreement between the issuer and

the holder, where the issuer agrees

to pay back the principal amount

with interest at maturity.`

Bond Rating

An assessment of the

creditworthiness of a bond issuer,

often provided by credit rating

agencies.

Bond Yield

The return an investor receives

from a bond, calculated as annual

interest payments divided by the

bond's current market price.

Book Value

The value of an asset as it appears

on a company's balance sheet,

calculated by subtracting liabilities

from assets.

Breakpoint

A volume discount level in mutual

fund purchases, where the sales

charge or load is reduced.

Broker

An individual or firm that acts as

an intermediary between buyers

and sellers, typically charging a

commission.

Broker-Dealer

A person or firm in the business of

buying and selling securities,

operating both as a broker and a

dealer, depending on the

transaction.

Bull Market

A market condition where stock

prices are rising, or are expected to

rise.

Bullish

An optimistic outlook or

expectation that a security's price

will rise.

Business Cycle

The natural rise and fall of

economic growth, characterized by

periods of expansion and

contraction.

Buyback

The repurchase of shares by a

company, reducing the number of

outstanding shares on the market.

Buyout

The purchase of a company's

shares, leading to the acquiring

entity gaining control of that

company.

Buy-Side

The side of the financial market

that involves investment

institutions like mutual funds and

pension funds that buy securities.

Buy-side Analyst

An analyst who works for

institutional investors and provides

recommendations for securities to

be included in their portfolios.

Call Option

A financial contract giving the

holder the right, but not the

obligation, to buy a stock, bond, or

other asset at a specific price within

a specified time.

Callable Bond

A bond that can be redeemed by

the issuer before its maturity date

under certain conditions.

Candlestick Chart

A type of financial chart that

displays high, low, opening, and

closing prices for a specific period,

used in technical analysis.

Capital Allocation Line

A graphical representation of the

risk-return profile of risky assets in

combination with a risk-free rate.