SIE EXAM COVERS ECONOMIC FACTORS, SUCH AS ACTIONS OF THE FED AND INTEREST RATES
Facing the Securities Industry Essentials (SIE) Exam? Then be prepared for questions on the Federal Reserve Bank and Economic Factors. FINRA'S SIE Exam Content Outline lists Economic Factors under Section 1.3.1. Therefore, FINRA is telling us that these topics may very well be asked on your SIE Exam.
Bob Eder in his Study for the Securities Industry Essentials (SIE) Exam covers the Fed, Open Market Activities, and various economic factors, such as interest rates. Here's a sample of Bob Eder's treatment of these economic factors:
Federal Open Market
Committee (FOMC) (1.3.1)
Members of FOMC
The FOMC is composed of the seven Fed governors,
and the president of the Federal Reserve Bank of New York, plus four other Fed
bank presidents, selected on a rotating basis from the other 11 Federal Reserve
Banks.
FOMC Meets Every Six Weeks
The FOMC meets approximately every six weeks to decide whether to increase the money supply, decrease it, or leave it unchanged. The FOMC holds eight regular-scheduled meetings during the calendar year.
Open Market Operations (1.3.1)
To increase the money supply, the FOMC instructs
its open market trading desk at the NYC Federal Reserve Bank to buy Treasury
bonds or other debt obligations for the Fed’s account. When the Fed pays money
for the purchase of Government “paper” (i.e., U.S. government bonds, notes, and
bills), this action increases money supply, and decreases interest rates. If
the FOMC decides to sell Treasury obligations, this action drains reserves out
of the system, and decreases or "tightens" the money supply.
Here is the link to FINRA's Content Outline for the SIE Exam. See the references to Fed and Open Market Activity in Section 1.3.1.
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