SIE Prep

Securities

Broad term for stocks, bonds, mutual funds, and other financial instruments.

Equities (Stocks)

Represent ownership in a corporation.

Common Stock

Type of stock granting voting rights and potential dividends.

Preferred Stock

Type of stock with fixed dividends, typically no voting rights.

Dividends

Distributions of company profits to shareholders.

Debt Securities (Bonds)

Represent loans to companies or governments.

Principal

Amount borrowed, to be repaid at maturity.

Maturity

Date when principal must be repaid.

Interest

Cost of borrowing money, paid by borrower to investor.

Mutual Funds

Pooled investments offering diversification and professional management.

Diversification

Spreading investments to reduce risk.

Liquidity

Ease of buying or selling an investment.

Primary Market

Where securities are first issued to raise capital.

Secondary Market

Where existing securities are traded among investors.

Broker-Dealers

Firms facilitating buying and selling of securities.

Exchanges

Centralized marketplaces for trading securities.

Over-the-Counter (OTC) Market

Decentralized, electronic marketplace for trading securities.

Securities and Exchange Commission (SEC)

Primary regulator of U.S. securities markets.

Self-Regulating Organizations (SROs)

Non-governmental organizations enforcing industry rules