Chapter 22 Flashcards
This states that an asset cannot be sold to realize a capital loss and then purchased again within 30 days of the sale.
superficial loss rule
It is a contract provision preventing a hedge fund manager from collecting a performance fee until the highest previous net asset value is exceeded.
high-water mark
It is the minimum return a fund must make before a performance fee can be taken.
hurdle rate
It is roughly defined as the total value of securities bought and sold in relation to the overall net assets of the portfolio.
portfolio turnover
This legal document states the objectives, risks, and terms of investment involved with a private placement
Offering memorandum
It is a debt instrument issued by a bank in the form of a deposit note. the interest rate is tied to the performance of an underlying asset, such as a portfolio of stocks, an index, or one or more mutual funds or ETFs.
principal-protected note
It is a service that combines several managed investment products into a single account controlled by a single authority.
overlay management
It is a pool of capital gathered and invested in a portfolio of individual securities according to a specific investment mandate.
managed product
These are designed to achieve a specific client goal, such as principal protection, tax management, or inflation indexation
outcome-based investments
This type of wrap fund invesets in portfolios of other managed products, usually mutual funds.
fund of funds
These are portfolios of managed products wrapped together and sold as a single product
wrap fund
These are accounts for which a qualified portfolio manager is authorized to select securities and execute trades on behalf of a client.
Wrap account
The classification of mutual funds in Canada is carried out by this committee which comprises Canada’s major mutual fund database and research firms
Canadian Investment Funds Standards Committee (CIFSC)
This type of wrap fund target investors with higher levels of investable assets. Accounts are managed on a segregated basis, thereby enabling the client to own individual securities.
separately managed wraps
These ETFs are constructed with derivatives such as swaps to achieve the return effect of the index.
Synthetic ETFs
This type of commodity ETFs invest in the commodity directly.
Physical-based ETFs
This type of commodity ETFs invest in futures contracts of different commodities, with an underlying portfolio of money market instruments to cover the full value of the contracts.
Future-based ETFs
This type of commodity ETFs invest in listed companies that are involved in exploration and development or in the processing or refining of a commodity.
Equity-based ETFs
The normal, upward-slope condition of Commodity ETFs is known as
and the premium of a deferred month over a prior month is known as the
Contango
Roll Yield
Exchange-traded funds that employ swaps are exposed to _____________ risk since you are swapping with another party directly.
counterparty risk
inverse and leveraged ETFs are suitable investment vehicles for the individual investor in only two specific applications:
hedging a current portfolio exposure and day trading.
Hedge Fund Service Providers
Supplies services to the hedge fund in the implementation of trading strategies.
Prime Broker
Hedge Fund Service Providers
Processes subscriptions and redemptions and calculates the hedge fund’s NAV.
Fund Administrator
Hedge Fund Service Providers
Responsible for holding and tracking all of the assets.
Custodian
Do leverage, inverse, and regular ETFs have resets?
Leveraged ETFs have resets
Inverse ETFs may or may not have resets
Regular ETFs do not reset
Refers to a portfolio construction strategy that uses broad-based ETFs as a passive core holding. The satellite assets are intended to boost returns above the core asset returns.
Essentially you hold two ETFs. One core broad-based ETF like VOO, and one satellite ETF such as a smaller ETF representing a particular sector, syle funds, or country ETFs that have a bit of risk to increase returns.
Core and Satellite
HEDGEFUNDS
are services, such as analyst reports, that the fund receives in exchange for business rendered to its supplier.
Soft-dollar arrangements
The open source code that powers Bitcoin?
Blockchain
Members of the peer-to-peer bitcoin platform independently confirm the transactions using high-speed computers through a process called
bitcoin mining
Hedge funds targeted toward high-net-worth and institutional investors are usually structured as
limited partnerships or trusts, and are issued by way of private placement.
is a piece of code that represents ownership of a digital concept (a bitcoin) with financial value
Bitcoin as a token
is the distributed network, or blockchain, that maintains the ledger of balances of bitcoin the token.
Bitcoin the protocol
