Ch.14 S7 Flashcards
How often must member firms send clients an account statement?
At least quarterly
Account statements must be sent to customers at least __________.
Quarterly
A change of address notification must be sent within _____ days.
30
T/F: A BD may stop sending customers statements if the account is profitable.
F; BDs must send customer statements regardless of account performance
Define the term cost basis.
The total cost to acquire an asset
Who must review a change of address for a client of a producing branch manger?
An independent supervisor
Define real interest rate (rate of return)
Interest rate minus the inflation rate
For active accounts, account statements must be sent __________.
Monthly
May a customer request to have a trade confirmation emailed to her?
Yes, sending trade confirmations electronically is acceptable
The ________ the duration, the greater the bonds price sensitivity.
Longer/greater
When it receives a transfer request, the _________ firm submits a list of assets in ACATS.
Delivering
If a client wins $1 million, what should an RR do?
Update the account form
Credit risk measures the issuers risk of __________.
Default on debt service
What must occur when a member firms customer places an order for a company’s stock and a control relationship exists?
Verbal disclosure must be made prior to the trade, with written disclosure made prior to settlement
For purposes of ACATS, what is a non transferable asset?
A proprietary product of a delivering organization or an asset that is the product of a third party (mutual fund)
Give a yield change, _________ bonds move more in price.
Long term
If a control relationship exists between a BD and issuer, may the bonds be placed in a clients discretionary account?
Only if the client provides specific written consent.
T/F: Trade confirmations may be sent electronically.
T
If a BD has a control relationship with an issuer, what is needed to place the bonds in a clients discretionary account?
The clients specific consent must be obtains before the bonds may be placed in the account.
May multiple confirmations be printed on the same page?
Yes, however each transaction must be clearly segregated
Define duration.
The measure, expressed in years, of a bonds price sensitivity to interest rate changes
T/F: An RR may send confirmation for a trade he believes will occur soon.
F; only on receipt of the trade to reflect actual transactions
Describe inflation or purchasing power risk.
The risk that todays investment will not be worth as much when the money is received in the future
Name some of the different items found on a customers confirmation.
Description, amount, purchase/sale, execution price, trade/settlement date, BD capacity, commission (on agency)
