Ohio Securities Industry Essentials (SIE) Practice Exam

A retail investor is defined as an individual who purchases securities for their own personal account, rather than on behalf of an organization or other entities. This distinction is important because retail investors typically engage in the market to manage their personal finances, invest for retirement, or achieve other personal financial goals. They buy and sell shares directly from brokerage accounts rather than through intermediaries intended to serve multiple clients.

In contrast, other options describe different types of investors or investment strategies. A professional managing investments for multiple clients refers to institutional or professional investors, while an entity pooling money from various sources typically describes mutual funds or hedge funds. A company focused on high-value transactions implies a corporate or institutional focus rather than the individual approach characteristic of retail investors. Understanding these distinctions is essential for grasping the broader categories within the investment landscape.