TAKING THE SIE EXAM? ARE YOU ABLE TO WORK PROBLEMS REGARDING INTEREST RATE RISK?
When you go to sit for the Securities Industry Essentials (SIE) exam, be prepared for questions on interest-rate risk. FINRA publishes a Content Outline for the SIE exam, and includes Investment Risks that you should know under Section 2.2. One of those required-to-know risks is investment-rate risk. Bob Eder has full coverage of investment risks in his Study for the Securities Industry Essentials Exam on pages 145-151. Here is a sample of Bob Eder's discussion of interest-rate risk: Interest Rate Risk (2.2) This is the risk that interest rates will go up and cause bond prices to go down. If interest rates go up, the prices of bonds will go down. This happens because a bond that pays four percent will lose value if other bonds pay a higher rate, say, five perce...