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FINRA - SIE Exam > Chapter 3 - Economics Factors > Flashcards

Chapter 3 - Economics Factors Flashcards

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SIE Exam flashcards
1
Q

What are some Leading economic indicator?

A

of Building Permits

of New Manufacturer’s Orders

Stock Index

Disposable Income

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2
Q

What are some Lagging economic indicator?

A

CPI

Prime Rates

Fed Funds Rate

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3
Q

What is a Prime Rate?

A

the interest rate for most creditworthy customers

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4
Q

What is the Fed Funds Rate?

A

the interest rates banks charge each other

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5
Q

What is the Call Money Rate?

A

rate BROKERS who LEND TO MARGIN accounts

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6
Q

What is the Discount rate?

A

interest rate the FED CHARGES BANKS

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7
Q

What is a Cyclical stock?

A

Move WITH the economy

Automakers, Hospitality, Luxury Goods

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8
Q

What is a Defensive stock?

A

LEAST affected by the economy, well established and stable DIVIDENDS

Healthcare, essential staple products

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9
Q

What is a Growth stock?

A

High GROWTH potential, NO dividend

Technology, Communications

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10
Q

What is a Value stock?

A

undervalued, trading UNDER intrinsic value

Energy

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11
Q

What is Monetary Policy?

A

Amount of money in circulation

controlled by the FED

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12
Q

What is Fiscal Policy?

A

Taxation and Expenditure

controlled by Treasury and Congress

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13
Q

What does Regulation T do?

A

Used to CONTROL MARGIN requirements

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14
Q

What is the role of the FOMC?

A

regulates the open market

controlling FED Funds rate, quantitative easing, and amount of currency in circulation

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15
Q

What is GNP?

A

Gross National Product tracks economic activity carried out within a country and by its citizens

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16
Q

What is Gross Profit?

A

Revenue - All Costs to Produce (COGS)

17
Q

What is Operating Income?

A

Revenue - All Costs to Produce (COGS) - Operating expenses (Non-COGS Expenses) - Depreciation

18
Q

What is EBIT?

A

Revenue - All Costs to Produce (COGS) - Operating expenses (Non-COGS Expenses)

19
Q

What is Net Income (Loss)?

A

Revenue - All Costs to Produce (COGS) - Operating expenses (Non-COGS Expenses) - Depreciation - Interest - Tax

20
Q

What is EBITDA?

A

Net Income + Interest + Taxes + Depreciation + Amortization

21
Q

Inflation causes purchasing power of money to increase or decrease?

A

Decrease

22
Q

Deflation causes purchasing power of money to increase or decrease?

A

Increase

FINRA - SIE Exam (4 decks)

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