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Products and Concepts

Knowledge of the products and concepts relating to the financial services industry, including financial instruments, financial management, insurance principles, and cash and capital principles.

Critical Work Functions

  • Examine characteristics to distinguish between stocks, bonds, and commodities.
    • Examine characteristics to distinguish between insurance and annuity products.
      • Develop procedures to create a financial plan.
        • Analyze tax structures and consequences to assist in business decision-making.
          • Examine characteristics to explain underwriting functions.
            Technical Content Areas

            • Financial Instruments
              • Understands the available financial instruments and risk associated with each instrument;
              • Recognizes appropriate situations for each instrument;
              • Understands basic differences and similarities between debt-based, equity based, and foreign exchange instruments;
              • Recognizes appropriate investment opportunities associated with each instrument.
              • Financial instruments include:
                • Securities (Stocks, Bonds, T-bills)
                • Other cash (Loans, Certificates of Deposit)
                • Exchange traded derivatives (Futures, Options)
                • Over-the-counter derivatives (Swaps, Caps, Exotic Instruments)
            • Financial Management
              • Demonstrates an awareness of the available analytical functions associated within the financial services industry;
              • Understands the basic concepts associated with financial analysis, credit analysis, debt management, risk management, valuation strategies, investment profitability, and underwriting.
            • Insurance Principles
              • Understands the principles of insurance and insurance contracts;
              • Demonstrates a knowledge of the different types of insurance (e.g., life, health, property, liability) and the associated risk covered by the insurance.
            • Cash and Capital Principles
              • Understands the nature of cash, the United States monetary system, and the time value of money;
              • Recognizes the risk, return, and opportunity costs associated with capital.