Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
66 Cards in this Set
- Front
- Back
|
Who does Cumulative Voting Rights Benefit? |
Small Companies/investors |
|
|
What is the equation to find the equivalent yield of a corporate bond vs a municipal bond? |
Municipal bond / (1-tax bracket) |
|
|
Suitability: Safety |
Gov't issue |
|
|
Suitability: Growth |
Stocks, Mutual Funds |
|
|
Suitability: Liquid |
Money Market |
|
|
Suitability: Diversification |
Mix |
|
|
Speculation |
Hedge fund, Small cap stock |
|
|
How often are investment company reports sent? |
Annually |
|
|
What is the formula for Net Assets? |
Total Assets - Liability |
|
|
What is the formula for Net Asset Value? |
Net Assets/Shares Outstanding |
|
|
12b-1 When is it reviewed & when is it received? How many votes for fee & how many votes for renewal? what is the max percentage? |
quarterly, annually, 3 votes, 2 votes, .75 |
|
|
What is the formula for finding the sales charge %? |
SCDA/POP |
|
|
What is the formula for finding the sales charge dollar amount? |
POP-NAV |
|
|
Open end investment companies |
NAV is less than or = to POP, if spread between NAV & POP > 8.5 % it is a close end |
|
|
What is the formula for expense ratio? |
fund expenses/ average net assets |
|
|
What is another name for the 13b-1? |
Name Rule |
|
|
How are Muni-bonds taxed? |
Fed exempt & taxed as capital gains |
|
|
What is the formula for Net Investment Income? |
dividend + interest- expense of fund |
|
|
What is the formula for current yield? |
Annual Dividend/POP |
|
|
What do principals review, approve, pre/post approve? |
review RXs & Approve IPRs & pre or post approve correspondence |
|
|
What are the cost of A, B, C shares? |
A= $.25 per $100, B = $.75 per $00 invested, C = 1% or .75 of shares sold (never becomes A shares |
|
|
How often is the NAV calculated? |
daily |
|
|
What is the max sales charge allowed by FINRA for a mutual fund? |
8.5% |
|
|
What qualifies a retail communication? |
Written and shown to 25 or more ppl in 31 days span |
|
|
Act is considered Discretionary ?if |
Action, Asset, or Amount is missing |
|
|
COP deals with what? |
Complaints |
|
|
What are pegging & capping? |
buying to keep a stock where it is, selling to keep a stock where it is |
|
|
in Dealing with DOE how many days to reach a decision, days to pay arbitration, days to schedule hearing? |
25, 30, 21 |
|
|
For Reg D & Reg A who are they for & what accompanies them? |
D = private placement w/ credited investors A= small offering (offering memorandum instead of prospectus) |
|
|
American Depository Receipts (ADRs) involve what? |
Foreign stock in American Market with SEC involvement |
|
|
Blue Sky Laws = what? |
State laws, always register with State as an In vestment Adviser Representative (IAR) |
|
|
What are the caps on contributing to IRAs |
$5500 per year until age 50 with a $1000 catch up |
|
|
How long must you keep Security emails on record, how long must complaints be on record? |
3 years, 4 years |
|
|
Exchange Traded Funds (ETFs) vs Exchange Traded Notes (ETNs) |
Top 20 own 80%, tracks like an index trades like a fund, VS debt instrument |
|
|
S&P 500, where does it rank, what is it's Beta? |
Leading indicator, Beta of 1, (if higher than 1 it is volatile) |
|
|
How much is a Bond worth, how much is a bond point worth, |
$1000, $10 = 1% of Par |
|
|
How does efficiency in markets affect spread & volume? |
Spread narrows & volume goes up |
|
|
Parity synonyms |
Equals, Equilibrium |
|
|
How often are cash dividends paid? |
Quarterly |
|
|
When would you want to refinance? |
lower interest rate & higher prices |
|
|
What is the relationship between price & yield? |
inverse |
|
|
What is the formula for Current Yield? |
Annual Income/Current Market Value |
|
|
Capitalization |
the sum of a corporation’s long-term debt, stock, & surpluses (investment capital) |
|
|
Cumulative preferred stock |
offers the holder any unpaid dividends in arrears. They get paid before common stock shareholder receive dividends |
|
|
Investment Advisor Act of 1940 vs Investment Company Act of 1940 |
legislation governing who must register with the SEC as an investment adviser vs congressional legislation regulating companies that invest and reinvest in securities. The act requires an investment company engaged in interstate commerce to register with the SEC |
|
|
Outstanding stock |
investor owned – Equity securities issued by a corporation & in the hands of the public; issued stock that the issuer has not reacquired |
|
|
Size of Mutual fund ABC shares and loads? |
Mutual Funds Share Classes |
|
|
Underwriter synonyms |
Underwriter / Sponsor / Distributor |
|
|
Nominal Yield synonyms |
Nominal Yield = Stated yield = coupon yield |
|
|
Issuer vs non-issuer transaction? |
Issue --> Customer --> Customer Issuer transaction Non issuer transaction |
|
|
Which stock is the last to get paid? |
Common Stock, preferred stock Cumulative in arrears, preferred, common, subordinated debenture |
|
|
Fed Reserve Bonds: Who does Reg T deal with? |
T is between Broker/Dealer & customer U is between Broker/Dealer & Bank |
|
|
Cash Dividends |
are a taxable event |
|
|
Secured bond vs convertible bond |
Secured Bonds – Collateral backing it. Lower risk & yield Convertible Bond – Low yield & lower coupon rate (bond to stock) |
|
|
Lower the coupon the more? |
Lower the coupon the more = VOLATILE = longer the investment lasts |
|
|
T-bills facts? risk & length? |
Most secure investment in world 3mo. 6mo. Or 12mo. NEVER 9 months |
|
|
Business Cycle |
Business Cycle – ExpansionPeakDeclineTroughRecovery / - \ _ / |
|
|
Close-end vs open-end |
continuous offering, shares fixed prospectus, no prospectus after IPO Must redeem shares, cant redeem only common stock, common preferred & bonds no 2nd market, 2nd market OTC & exchange formula of pricing, supply & demand pricing 8.5 max sales charge, commissions e-date set by BOD, set by FINRA |
|
|
What percentage of investment company must be non-interested party? |
40% |
|
|
What is the riskiest type of stock fund? |
Specialized (Sector) is the riskiest type of stock fund |
|
|
How long can a prospectus be used? |
16 months |
|
|
Who has the risk with annuities? |
Investment Risk assumed by insurance company Purchasing power risk assumed by the customer |
|
|
Purchasing annuities Deferred vs Immediate |
Deferred (SPDA) – premium buys accumulation units Immediate (SPIA) – premium buys annuity units |
|
|
How does a Coverdell education Savings account (ESA: Educational IRA) per child allowance? |
$2,000 per child per year |
|
|
Maxing a Keogh |
Keogh – if you max out you must pay > 25% of same to staff |
|
|
Opening a customer account is must be updated |
every 3 years |
