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104 Cards in this Set

  • Front
  • Back
Funded debt-leverage is another way to say.
$1,000 par value must be repaid at maturity.
$1,000 par value must be repaid at maturity.
$1,000 par value must be repaid at maturity.
Coupon rate / nominal yeild.
A bond that is trading flat is.
Company is in default/bankrupt
Interest in bonds is a fixed charge as percent of $1,000 par value. How often is this payable.
When considering the Coupon factor. What two conditions influence the interest rate?
Prevailing economy

Issuer's credit rating
the higher the credit rating, the lower the coupon
A bond that is secured by real estate.
Mortgage Bonds
A Bond secured by the equipment purchased
Equipment Trust Certificate
A bond secured by other stocks and bonds
Collateral Trust
A Bond secured by the full faith and credit of issuing corporation (unsecured)
A bond that pays no interest- bought at a discount.
Zero Coupon Bond
A bond may be called prior to maturity if stated in the indenture.
Callable bond
A bond is calculated as a percentage of _______ par value.
Bond Prices
Point= $___ or _% of 1,000 par value.
$10.00 or 1%
Corporate bonds fract ____
Municipal bonds fract ____
Government bonds fract ____
1/8 of 10 = $________

1/32 of 10 = ________

When interest rates go up, prices on existing bonds go down. Selling at a ________
When interest rates go down, prices on existing bonds go up. Selling at a _________.
10s12 selling @ 7.00% yield to maturity. What is the price? Premium or Discount
6s09 selling@ 7.00% yield to maturity. What is the price?
Premium or Discount
The term _________ _______ is described by:
- Annual interest(or dividends) divided by current price.
Current Yeild
Type of bond allowing bond holder to convert to common stock of the corporation.
Convertible Bond
U.S. Government Securities where the Gov. has direct Obligations are.
Treasury Bills
Treasury Notes
Treasury Bonds
Savings Bonds
The Government _______ ______
Pays interest semi-annually and has a maturity of usually 10 to 30 years.
Treasury Bond
Gov. ________ ______
-interest paid semi-annually
-maturity of 1 to 10 years.
Treasury Note
Gov. __________ _____
-Bought at a discount
-Mature in one year or less -
4 wks,13wks,26wks,etc...
Treasury Bill
U.S. Gov. ________ ______ are not negotiable.
Savings Bonds
Two types of Gov. Savings Bonds.
Series EE

Series HH
Two Federal Agency Issues not direct, but moral obligations of the U.S. Gov. are.
(GNMA)Government National Mortgage Association.
(FHLB) Federal Home Loan Bank
Types of Municipal Securities.
-(GO)General Obligation Bonds

-Revenue Bonds

-(IDR)Industrial Development Revenue Bonds.
A Muni bond that is issued by a municipal authority and backed by a corporate guarantor is what type?
(IDR) Industrial Development Revenue Bond
A Muni Bond backed by the faith and credit of the issuer. (through taxes)
(GO) General Obligation Bond
A muni bond payable from revenues generated by the financed project (toll roads etc.)
Revenue Bond
High quality debt instruments with a maturity of one year or less.
Money Market Securities
A money market security. short-term, unsecured corporate debt (like a debenture)
Commercial Paper
Money Market Security
bank draft issued upon a letter of credit to facilitate import/export trade.
Bankers Acceptance
Negotiable, unsecured interest-bearing debt security of $100,000 min issued by banks.
Certificate of Deposit
The most effective of all money market instruments.
Treasury Bills
Another money market instrument is a (repos)
repurchasing agreement
Two Mortgage backed securities.
(CMOs) Collateralized Mortgage Obligations

(REMICs) Real Estate Mortgage Investment Conduits
The Securities Act of 1933 is know as the.
Act of full disclosure
Securities act of 1933 established what?
The registration of Securities.
While a new security is "in registration" also known as the _______ ___ _______ what may be printed to be sent to potential investors.
Cooling-off period

Preliminary Prospectus (Red Herring)
the meeting to assure issue is in complaince with federal and state laws.
Due Diligence meeting
Securities Exempt from registration.
- Gov. and muni issues
- Intrastate offerings
- Private placements
where a new issue is sold and proceeds go to the issuer.
Primary Market
Broker/Dealer which helps corporations or municipalities raise capital by arranging for a new offering of stocks or bonds to be marketed.
Investment Banker (Underwriter)
4 types of underwritings
- Firm commitment
- Best efforts
- All-or-none
- Standby
What underwriting type:
- the issue is purchased from the issuer, marked up and sold to the public.
Firm commitment
What underwriting type:
- the issue is purchased from the issuer, marked up and sold to the public.
Firm commitment
What underwriting type:
- the issue is purchased from the issuer, marked up and sold to the public.
Firm commitment
The underwriting type:
- the issue is not purchased but the underwriters act as agents and attempt to sell all the securities the market will bear at the specific price.
Best efforts
Type of underwriting:
- a type of best efforts which is canceled if the entire issue is not sold in a given time period.
Types of underwriting:
used in a rights offering
Participants in underwriting.
- Manager
- Syndicate member
- Selling group - broker/dealer
In underwriting, the broker/dealer awarded the issue is the ___________.
Manager (lead underwriter)
In underwriting, other broker/dealers chosen by the manager to participate in the underwriting in a principal (dealer) capacity.
Syndicate memberf
In underwriting, the broker/dealers chosen to assist the syndicate in marketing the issue in a broker(agency) capacity.
Selling group
Broker/Dealers which provides a secondary market for securities.
Market Makers
The markets where outstanding issues are traded.
Secondary markets
Types of Secondary markets
-Listed Markets
-Over-the-Counter Markets
-Fourth Market
NYSE,AMEX,reginal exchanges,auction market are examples of what market?
Listed Market
Nasdaq-unlisted-negotiated market is what type of market?
(OTC) Over-the-counter market
a listed security trading over-the-counter
Nasdaq intermarket
Direct institutional trading
Fourth Market
OTC market- source of price quotations is.
The Nasdaq - an automated quotation system
The Nasdaq level that allows only the highets bid and lowest ask of all market makers - subject quote
Level 1
Nasdaq level that lists market makers' firm quotes on price and size.
Level 2
Level used by market makers to enter quotes, plus firm quotes available on level 2.
Level 3
A _______ represents _______ as their ________ and collect a __________.
A ________ represents _______
as the ________ _______ (____ ______) at a ________.
-Principal Investor (Market Maker)
-Mark up
Inventory Positions for a Broker/Dealer are known as ______ or _______.

The inventory position where the B/D has the security in their inventory is.
The inventory position where a B/D in order to meet demand, sells shares of a security he doesn't own and has to buy back later.
A cash trade is always settled when?
On the same day
Market Terms:
Date the transaction is settled member-to-member.
Delivery or Settlement Date
A transaction settlement is said to be the _______ ____ when it is done on the __rd business day after the trade date for ______ and _______ securities and the ________ ____ for U.S. Gov. securities
-corporate and municipal
-next day
Market Terms for Dividends:
Date board of directors declares a dividend.
Declaration Date
- 2 business days prior to record date for corporations
- Date designated by issuer or underwriter for mutual funds.
- Share price is reduced on this date.
Ex-Dividend Date
Day the list of entitled stockholders is made.
Record Date
Date dividend is paid
Payment Date
When a security is delivered in order to be considered a good delivery it must be (4 things)
- Certificate in good form
- At the appropriate time
- Properly signed
- Correct number of units
Two types of taxation on securities.

Capital gains and losses
Cash dividends from stocks held are treated as ________ income and taxed at ______%.

Interest from bonds held are taxed as _________ income while Municipal bond interest is ______ ______.

Distribution for retirement plans are treated as _______ income.
A capital gain is considered long term after how long?
a day and a year from trade date.
Losses may be used to offset gains?
The maximum capital loss write-off is $_______ per year of net losses; carryover any excess.
Two risks with bonds.
Interest rate risk
(Money rate)

Purchasing power risk
The words
Represent what?
Business Cycles
Practices followed by the Federal Reserve Board which affect the money supply, interest rates and bond prices is know as the _______ _______.
Monetary Policy
The percentage of customer deposits to be maintained in cash.
Reserve Requirements
The rate at which member banks can borrow from the Federal Reserve.
Discount Rate
Types of Issues:
seasoned securities with steady earnings and secure dividends are known as.
Blue Chip securities
Types of Issues:
A security that makes money in both good and bad times (utilities,supermarkets,clothing, alcohol, tobacco,etc..)
Defensive security
Types of Issues:
Wide fluctuations in earnings,dividends, and stock prices based upon business cycles.
Cyclical securities
Types of Issues:
bought for capital gains, not income.
Types of Issues:
bought for income,not capital gains.
Public Utilities
A trust that invests primarily in real estate projects. Can not be sold by a Series 6 Reps.
Real Estate Investment Trust
Mutual funds can be owned by _________ name, ________ or ___________ name.
Individual name, partnership or corporate name.
Three more forms of Mutual fund ownership are.
Joint name
Trust account
Custodian under Uniform Gifts to Minors Act (UGMA)