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11 Cards in this Set
- Front
- Back
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Investment companies do not include what?
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Brokerage firms
Insurance companies Banks |
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What are redeemable units?
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Units that are not publicly traded.
If investor wants to sell the units, they can only do so by selling them back to the company (or its underwriter). This is called redeeming |
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UIT's
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Unit Investment Trusts
-Issue only redeemable units -Generally have a fixed portfolio of BONDS -Are not managed and DO NOT REINVEST -Charge little or no management fee and a low percentage sales charge -Have a TRUST indenture and a board of TRUSTEES -Pay investors interest not dividends -Trust is terminated when all bonds mature |
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What are the three classifications of investment companies?
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Face Amount Certificate Companies
UITs Management Companies |
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Management Companies
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4 types of management companies
Open End Closed End Diversified Non Diversified |
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Open Ended Management companies
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Issue and redeem shares every day
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NAV (Net Asset Value)
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(Total assets of the fund - total liabilities of the fund) / total shares of the fund
NAV reflects the CLOSING market value of all securities plus any interest or dividends received |
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Buy at ___
Sell at ___ |
Buy at Ask
Sell at Bid |
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Expense Ratio for Investment Companie
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Expense Ratio =
Operating Expenses / AVG Net Assets |
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Formula for Mutual Fund Offering Price
*Remember that the sales load is a percentage of the offering price (USE THIS FORMULA WHEN THEY ASK ME FOR HOW MANY SHARES AN INVESTOR WILL BE ABLE TO BUY) |
Offering Price (OP) =
NAV / (100% - sales load %) |
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Formula for sales load %
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Sales load % =
(OP - NAV) / OP |
