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62 Cards in this Set
- Front
- Back
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Reluctant to take risk |
Risk adverse |
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Income left after taxes |
Disposable income |
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Income, after taxes, personal necessities, and debts |
Discretionary income |
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Three main suitability obligations for firms and representatives |
Finra rule 2111 |
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Must determine that a series of recommended transactions is suitable, not excessive, or unsuitable, when combined |
Quantitative suitability |
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Prevent loss of an investments, total return |
Capital preservation |
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Income head is exempt from federal taxation |
Tax exempt income |
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Current income from a conservative profile |
Current income |
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Offer safety and income |
GNMA bond fund |
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Growth overtime greater than cost basis |
Capital appreciation |
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What is an equity fund that has the potential for capital appreciation |
Value fund |
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Capital. Appreciation by investing in companies they know. |
Blue Chip funds |
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Taken for a potentially higher overall return |
Aggressive growth |
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For investors want to take a higher risk and invest in a specific market segment |
Sector fund |
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Capital appreciation and consistent income, also known as a hybrid account |
Growth and income |
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A client that is looking to retire in a year does not necessarily need the funds in a year. Therefore, you should look at the clients. |
Overall lifeline |
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Additional risk with above average returns |
Speculation |
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What does the acronym used for systematic risk? |
Prime |
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What does AMT stand for? |
Alternative minimum tax |
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The office, where broker dealers, execute trades, approves, new accounts, approval of retail communications, and completes review of customer orders |
Office of supervisory jurisdiction (OSJ) |
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Location where a broker dealer of facts or attempt to affect security transactions |
Branch office |
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Customer name, home or business street address, customers, date of birth, customers, Social Security number, signature of principle, and signed W9 or W8 |
Required customer information |
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Selling and one account when you own in another |
Shorting against the box |
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Financial status, tax status, investment objectives, experience, marital status, occupation, and employer |
Requested customer information |
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What is a registered representative do if they don’t why are all the requested information |
Can you still open the account but can’t make any recommendations |
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Yes, broker dealer in registered representative the ability to verify identity of a client |
Customer identification program (CIP) |
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Written policies and procedures, that address the protection of customer, information and records |
Regulation S-P |
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Regulation S-P has to be given to all customers on an |
Annual basis |
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______ receives initial privacy notice |
Consumer |
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_______ receives annual privacy notice |
Customer |
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An individual who has an ongoing relationship with the financial institution |
Customer |
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An individual who has obtained financial services or products from a financial institution |
Consumer |
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If one party dies, the remaining owners retain the account registration |
Joint tenants with rights of supervisor ship |
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Only married couples in community property states |
Community property |
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If one party dies their portion of the account will pass over to their estate and it’s based on ownership percentages |
Tenants in common |
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Husband and wife have a tenants in common account, wife calls the registered representative to process a trade. What should the registered representative do |
Process the trade |
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Wife calls registered representative to place trade in husbands personal account. What should the registered representative do? |
Do not place the trade (wife would need a power of attorney) |
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An account for a group of people with a common purpose, intending for a legally binding relationship |
Unincorporated association |
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Provides investments and sets up trust |
Grantor |
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Appointed by the grantor |
Trustee |
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Payments for trades must occur in T +4 (s+2) |
Cash account |
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Broker dealer extends credit to customers |
Margin account |
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Customer needs to sign margin agreement and hypothecation agreement in order to open this type of account |
Margin account |
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Client pays one fee, usually annually, which covers investment advisor, fee, administrative fees, and transaction cost |
Wrap account |
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Clearing firm that holds customer securities positions, created by several different executing broker dealers |
Prime Broker |
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What is people use prime brokers? |
Large institutions and hedge funds |
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The register representative can only buy or sell securities |
Limited POA |
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Registered representative may buy and sell securities, and add move money and securities from the account |
Full POA |
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Broker dealers obligation to find the best price for a customer over all markets |
Best execution |
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Broker dealer introduces a third-party between them and the customer and it’s only allowed unless it results in a better price for the customer |
Interpositioning |
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Transactions occurring in an incorrect account |
Cancel and Rebollar |
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One firm disagrees with the transaction as reported |
DK notice |
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Clearly erroneous trades |
CUSIP number |
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The date the order is executed |
Trade date |
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T+2 |
Regular way used for corporate and municipal securities |
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T +1 |
US government securities and options |
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T=S |
Cash settlement |
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Written documentation of trade |
Confirmation |
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If a transaction is not paid by the regulation, tea, payment date, the broker-dealer can freeze the customer account for |
90 days |
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Can I registered representative still process trades in a frozen account? |
Yes, with cash upfront |
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Must be sent at least |
Quarterly |
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For accounts with activity, account statements must be sent |
Monthly |
