misc

Question 1

FINRA RULE 2111

Answer 1

Suitable recommendations include:
Customers Financial situations
Investment Experience
Investment objectives
Age
Risk Tolerance- # of dependents and educational needs, Investment objectives, Net Worth and Time horizon

Question 2

Market Capitalization- current market price x number of outstanding common shares

Answer 2

Micro Cap- less than 250 million
Small Cap- 250 million to 2 billion
Mid-Cap- 2 billion – 10 billion
Large Cap- Over 10 billion

Question 3

Circuit-breaker points

Answer 3

represent the thresholds at which trading is halted market-wide for single-day declines in the S&P 500 Index. Circuit breakers halt trading on the nation’s stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day.

Question 4

Prime Rate

Answer 4

is the best interest rate charged and set by commercial banks on loans to their creditworthy commercial customers. It is normally the highest rate of all interest rates in this list of interest rates.

Question 5

Federal Funds Rate

Answer 5

is the rate that banks charge each other for overnight loans.

Question 6

Discount Rate-

Answer 6

is the rate charged by the Federal Reserve to Banks.

Question 7

LIBOR

Answer 7

(London Inter-Bank Offered Rate)- is the average rate that international banks charge each other( floating rate)

Question 8

Broker or call loan rate

Answer 8

is the rate at which broker-dealers borrow from banks to cover margin loans to customers.

Question 9

Real Interest Rates

Answer 9

is the nominal rate minus the current rate of inflation. The Real Interest Rate is also called the Inflation-Adjusted Return.