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12 Cards in this Set
- Front
- Back
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What is Net asset value equal?
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NAV = market values of assets minus liabilities/shares outstanding
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What are unit investment trusts?
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pools of money invested in a portfolio that is fixed for the life of the fund; unmanaged- lower fees; usually invest in munis or corporate bonds; investors can sell holdings back to trustees for NAV
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What are the two types of managed companies?
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1. closed-end
2. open-end |
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What is an open-end fund?
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fund issues or redeems shares at NAV
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What is a closed-end fund?
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investors must sell their shares to other investors; shares are traded on organized exchanges; price can differ from NAV
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What are commingled funds?
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partnerships of investors pool their funds; organized/managed by a bank or insurance company; trust or retirement accounts; too small to warrant managing on a separate basis
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What are Real Estate Investment Trusts (REITs)?
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similar to a closed-end fund; invest in real estate or loans secured by real estate
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What are hedge funds?
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private partnerships, minimal SEC regulation; lock up period allow managers to buy up illiquid assets; 2% of assets, 20% of revenues
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What are 12b-1 fees?
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SEC allows managers of 12b-1 funds to use fund assets to pay for costs such as advertising and broker commissions; paid annually
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What are soft dollars?
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mutual fund managers get kick back from brokerage firms by using them for trades
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What is turnover?
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ratio of the trading activity of a portfolio to the assets of the portfolio; if lots of turnover, investor cannot manage his overall tax obligation
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What are Exchange-Traded Funds (ETFs)?
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allow investors to trade index portfolios just as they do shares of stock; can be traded throughout the day not just at the end at NAV; unit investment trust holding say the S&P500 (SPDR); can be sold short or bought on margin; when mutual fund hold redeem shares capital gains taxes can be triggered; in ETFs you sell your shares to other traders, no capital gains realized for whole fund; can exchange ETF for the actual stocks, less price spread; can be cheaper, deal only with a broker
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