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Series 7 > 7 special cards > Flashcards

7 special cards Flashcards

1
Q

NAV, POP, SC%

A
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2
Q

parity

A

paritystock= bond price/ conversion rate

parity of bond= stock price* conversion rate

conversion rate= par/ conversion price

conversion price= par/ conversion rate

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3
Q

nominal yield

current yield

A
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4
Q

Regulation T

Regulation U

Initial vs Min

A

Reg T- FRB, intial customer broker dealer. hypothecation

Regulation U- broker dealer rehypothecates. bank to broker

maitenance margin- FINRA

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5
Q

Simple IRA

SEP IRA

KEOGH HR10

403b

A

Simple IRA- 14k max salary reduction 2-3% match

SEP IRA- contibute less when needed, 25% of employee income

KEOGH HR10- 61k max contribution 20%

403b

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6
Q

accumulation unit vs

annuity units

A

accumulation unit- accounting measure of owners of owners interest in seaprate account. shares that a customer aquires

annuity- accounting measure of annuity amount to be received by customer. once contract is annuized, accumulation units converted to annuity units determine annuity payments to be made

Payments received by owner of non-tax qualified variable annuity are only taxable to extent of earnings above cost basis. not tax deductible. earnings build up tax deferred

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7
Q

147

A

intra state issues

issuer can advertise in any state, msut be resident where its sold

cannot sell out of state for 6 months after effective date

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8
Q

Regulation A

A

start up companies to raise capital- smaller dollar amounts in 12 months

tier 1- 20 million no audited

tier 2 75 million audited

1A- SEC and circular not prospectus

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9
Q

415

A

shelf registration.

3 year shelf life,blue chip companies

used by seasoned ocmpanies to issue shares quickly. blanket registration with SEC

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10
Q

regulation D

A

private placements.

accredited investor- net worth 1 mil, 200k income, 5 mil for instutition

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11
Q

regulation M

A

public offerings. prohibitions on syndicate members

stabilization rules, market manipulation

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12
Q

144

A

exempt transactions, sale of restricted stock

unregistered held for 6 mo before they can be sold

form 144 with sEC.

1% outstanding shares, 4 weeks trading vol, 4x a year

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13
Q

144a

A

QIB qualified insitutitional buyers. 100 mil assets

large blocks. PORTAL. illiquid, inactive

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14
Q

145

A

SEC statements with merger, divesture, spinoff

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15
Q

crowdfunding

A

max 1 mil, don’t need to be accredited.

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16
Q

10b-5

A

catch all fraud rule

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17
Q

form 13 d

A

proxies. SEC 5% or more of companys stock

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18
Q

1939

A

trust indenture act.

protect bond holders. covenants SEC.issuer appoints trustee

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19
Q

1940

A

investment advisors act.

not required to register. banks, attorneys, accountant

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20
Q

Serbanes Oxley

A

faster reporting.

analysts separated from broker dealer investment banking function

10k and 10Q

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21
Q

term

serial

series

A

term- same time, same maturity. dolalr percentage of par PRICE quotes. Corp + muni DOLLAR bonds 1/8, US gov bonds 1/32nd

serial- same time, different maturities, BASIS YIELD quote, BASIS points. money markets. muni bonds, corp equipment and trust certificates.

series- different time, same maturity

for premium bonds quote YTC

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22
Q

primary vs secondary

ex date and record date

what are dated date, settlement date, record date

A

primary: DREP
secondary: DERP

dated date- day bond start to accrue interest. up to settlement

trade date- agree to terms

settlement date- ownership trades

record date- looks to see if owner dividend

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23
Q

debt to equity ratio

A

debt to equity ratio: long term debt/ capitalization

capitalization= long term debt +shareholder equity

solvency

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24
Q

working capital

A

working capital= current asssets- current liabilities

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25
current ratio
current assets/current liabilities
26
acid or quick ratio
quick assets/ current liabilities quick assets= - inventory
27
Bond vs basis points
bond points= $10, 1% of par basis point= .10$, 01% of par. 100 basis=1%, $1 per 1k if spread is 1.25 points, 1 1/4% of par= $12.50 per 1k, 125 basis points
28
credit ratings. long term vs short term debt
long term: Moodys Baaa, S&P BBB shor term: Municipal- MIG 1,2,3 SG,B commercial paper: A1,2,3 B,C/ P1,2,3 NP
29
1st, 2nd, 3rd, 4th markets
1- inside quote, auction. physical location. exchanges 2- market makers and quotes. negotiated. unlisted electronic. PINK OTC 3rd- NYSE secuirities traded away OTC global market 24hrs 4th- direct instutitional investors ECN
30
TRACE EMMA OATS ACT TRF OSS ADF
TRACE- debt/corp reported no later than 15 min EMMA-muis OATS- NASDAQ, synchronized ACT- nasdaq confirmation TRF- third market OSS- options bypass communication posts ADF- ECNs
31
introducing vs clearing agent
intorducing- cannot take custody. clearing can
32
new account verification within how many days of opening
30 days
33
written complaint retention of customer accounts arbitration statue of limitations retail communications retained account record verification transfer of assets options communications
written complaint- 4 years. reported 15 days of quarter retention of customer accounts-6 arbitration statue of limitations- 6 retail communications retained- 3 years within 30 days of opening and change. 36 months after carrying firm 1 business day to validate. complete in 3 days any options commuincation not occompanied by ODD disclosure be fille dwith exchange 10 days in advance of use
34
initial margin vs maitenance
iniital- REg T FRB maitienance- FINRA
35
departments for flow of funds (margin etc\_
Margin departments- all accounts maintained under margin regulations of FRB and FINRA Purchase and sales- processing orders Reorganization- securities changes in capitalization due to mergers, aquesistions, stock splits Order department- routing buy and sell orders
36
accumulation unit annuity units
accumulation units- shares. interest in separate account annuity units- fixed annuity to be received by owner. accumulation converted into annuity
37
defined benefit vs contribution
benefit- employer assumes risk. known beenfit. high salaried defined contribution- employee assumes risk. formula based.
38
SAR vs CTR
SAR- 5k within 30 days CTR- 10
39
technical analysts vs fundamental
Technical- market price, trading changes in dow jones, reversal, support and resistance levels. Advance/ decline lines, short intereset. Selling and buying decisions Fundamental- intrinsic quality, PE ratios, earnings per share
40
recession vs depression
recession- 6 mo depression- 6 quarteres
41
leading and lagging indicators
**Leading** S&p 500 Housing starts Unemployment claims Durable good orders, consumer good orders Money supply levels **Coinciden**t GDP Employment levels Personal income- number of hours Industrial production Leading S&p 500 Housing starts Unemployment claims Durable good orders, consumer good orders Money supply levels Coincident GDP Employment levels Personal income- number of hours Industrial production **Lagging** Corporate profits Duration of employment Inventory to sales ratio Labor cost per unit Commercial loans Consumer credit to income ratio Corporate profits Duration of employment Inventory to sales ratio Labor cost per unit Commercial loans Consumer credit to income ratio
42
allocations and strategies portfolio rebalancing strategic assets tactical active
Portfoio rebalacing- reallocation of funds ioveperforming, under Strategic asset- determination of percentage of assets in each class Tactical- permited variation from percentages Active- returns excess benchmark, undervalued stocks
43
foreign currency optins vs foreign currency trades
options- same day or regular way secuirities- forward or spot (1 or 2 day)
44
municipal taxes. one mil
.001 assessed value
45
special tax bonds
backed by taxes other than ad valorem. usually excise taxes
46
ARS vs VRDR
both weekly VRDR- put option. 25k long term debt 20-30 years. reset to benchmark. ARS- dutch. long term debt. no put
47
ETN
unsecured debt issued by baank, linked to market. no periodic interest. trades like stock, can be redeemed
48
eurodollar
issued in bearer form. not subject to US withholding taxes. not issued by US gov
49
CDs
money market instrument jumbo 100k 1 year or less. FIC- 250k
50
income/ adjustment bond
pays interest with earnings. Bankrupt ccompanies. trade flat due to uncertainty of future payment
51
funded vs unfunded debt
funded- long term corp debt unfunded- short
52
taxation + amortization and accredtion
OID muni bond- not taxable OID corp must MArket discount muni may
53
fed funds vs clearing house funds
gov bonds- fed funds actual day/month clearing house- trace, corp
54
financial risk
Debt financing or utilizing debt leverage too much can lead to the inability to meet principal and interest payments on a company's debt obligations.
55
dark pool
private trading for listed secuirities operated by major broker dealer
56
gray market
smaller bankrupt companies. market illiquid. dont report to SEC, but regulated by finra
57
Tapes
tickets sent to exchange and stamped with order entry, order execution and cancellation specialists report trades to tapes NASDAQ- C tape NYSE- A tape AMEX- B tape
58
NASDAQ
single book system vs NYSE super display book market maker- finra firm tha t buys and sells secuirities out of its own inventory
59
letter of intent
investors agree to buy additional shares and is given reduced charge. good for 13 months. backdated 90 days
60
ETFs vs Index mutual fund pricing commisisons margin shorting capital gains
pricing: ETF continuous/ mutual- forward pricing commissions: ETF commission/ mutual none margin: ETF yes/ mutual no short: ETF yes/ mutual no gains: ETF taxed when sold/ mutual- taxed annually
61
open end vs closed end offerings vs shares prospectus types of shares charges
open- continuous primary offering/ closed- number of shares fixed prospectus:open yes. closed- no prospectus afte IPO shares- open: common/ closed- common, preferred, bonds charges- 8.5% max sales/ closed- commissions
62
VC vs BDC
venture capital fund. limited partnership only sold in private placements to wealthy accredited investors BDC invests in private start up and financially troubled companiesbusines. private equity investments development company registered investment 1940, trades like other stock distribute 90% of taxable net income to qualify 70% of assets msut be in small or troubled companies conduit tax treatment 90% taxable income must be from dividends, interest and capital gains on investments
63
time vs intrinsic
intrinsic= amount an option is in the money time/extrinsic value premium- intrinsic
64
options price/ covered call
max life 9 months, near expiration is less expensive long call protect- same or lower strike price, same or longer expiration
65
portfolio margening
lower margin requirements for stock positions that are hedged by options min equity 100k. must be approved for naked options seaprate approval from registered options principal
66
fail to deliver
10 days. frozen for 90 days. can trade, fully paid
67
official notice of sale
advertising in bond buyer and newspaper to solicit competitive bids. type of bond, dollar amount, secuirty backing, rreputation, good faith deposit
68
tombstone
announcement of Public offering in newspaper gross offering size, POP, names of members
69
official statement
prospectus like document, disclosure. delivered by settlement
70
level of options
1. covered calls 2. buy calls and puts 3. spread positions 4. naked
71
options agreement
sign within 15 days. conditions change also 15 days
72
competitive vs non competitive bids
compeitive bid- primary dealers, gov secuirities dealers, other institutions max bid 35% of total offering noncompeitive bid- small insutitional investors. Max $5 million
73
priority order for municipal markets
PGDM presale, group, designated orders, member
74
spread components
management- syndicate manager underwriting fee- syndicate members selling concession- seller earns
75
regulation FD
prohibits issuers from making dslective disclosure to reasearch, mutual fund, and other professionals fair disclosure inside trading
76
stabilization
satbilization of new issue in secondary market. underwriter can stabilize price at or below POP notice of stabilization in prospectus
77
reg sho
before it can be sold short, locate requirement rules for selling secuirities short
78
10b-18
allow issuer to buy shares at highest bid or last reported sale price 1 broker dealer, cannot be opening transaction, executed within 10 min of close activity, must not be higher than market price or exceed 25% of trading valme
79
tender offer
attempting to buy majority stake in company makers offer prices at premium, contigent on min number of shares being tendered initial offer 20 business days SEC rules, each sweetening extends by 10 days
80
corp characteristics
unlimited life- can avoid free trasnferability of shares- can avoid limited liability centralized managment- hardest to avoid -if avoid 2, conduit taxation, not taxed as corp
81
estate taxes
progressive tax 11.58 million 23 million if married
82
bullet barbell ladder
bullet- same target date, bought over time. beneficial- interest rise. not lower barbell- short and long term bonds average life near target date. best with variable interest rates Ladder- bonds purchased one time with maturities at regular intervals. protects in rising interest rates
83
'frb monetary tools
discount rate open market operations- daily buying and selling treasury secuirities between fed dealers Reserve requirement
84
scale in municipal
reoffering scale. listing by maturity or yields the issue will be offered
85
communications
correspondence instututional communication retail communicationmore than 25 people in 30 day calendar period
86
customer identification programs
CIPs financial instutiions maintain for money laundering SDN maintained by OFAC
87
dividends in margin
withrdrawn within 30 days or become equity
88
recomendations for suitability 3 types
Quantitative, reasonable basis, customer specific
89
eastern vs western
eastern undivided- responsbile for its original percentage regardless
90
FDIC
does not protect money markets. only avaiable to banking acccounts
91
cav
cost basis
92
who enforces and who doesn't
enofrce: OCC, FIC, FRB, FINRA does not: MSRB
93
continuing education
second year anniversay and every year after
94
foreign puts and aclls
EPIC exporters buy puts on foreign importer buy calls
95
LEAP
long term options contract. 38 months.
96
options price
longer term options contarcts are always more
97
premium vs discount bonds quotes
discount- YTM premium- YTC
98
all or none fill or kill immediate or cancel not held market on close
all or none- all, can wait fill or kill- entirety not willing to wait immediate or cancel- immediate, partial execution fine not held market on close
99
decline closings
7% 15 min 13% 15 min 20% end of trading session
100
inside quote
highest bid, lowest ask
101
index that most closely approximates market
willshire index

Series 7 (3 decks)

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