PLANNING TO TAKE THE SECURITIES INDUSTRY ESSENTIALS (SIE) EXAM? THEN BE ABLE TO EXPLAIN AND IDENTIFY VARIOUS INTEREST RATES!
If you plan on sitting for the SIE Exam, make sure that you thoroughly understand the differences between the various interest rates, such as discount rate, prime rate, and federal funds rate. FINRA publishes a Content Outline for the SIE Exam, and in Section 1.3.1, FINRA lists the various interests as being important for the test. Bob Eder in his Study for the Securities Industry Essentials (SIE) Exam discusses interest rates in some detail. Here is an example of Bob Eder's treatment—note how Bob Eder links major paragraphs to FINRA's Content Outline: Fed Funds Rate (1.3.1) The most volatile is the “federal funds rate,” charged by banks for overnight borrowing. Banks are constantly borrowing from and lending to other banks. Banks charge or pay the fed funds rate for these overnight loans. The Fed exercises only indirect control over this rate. The Fed announces its pre