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Series 7 > Flashcards > Flashcards

Flashcards

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Series 7 Top-off Exam flashcards
1
Q

WORKING CAPITAL

A

= CA-CL

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2
Q

CURRENT RATIO

A

= CA/CL

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3
Q

CAPITALIZATION

A

= LT debt + NW

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4
Q

DEBT RATIO

A

= LT debt / total capitalization

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5
Q

QUICK/ACID-TEST RATIO

A

= CA-Inventory / CL

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6
Q

EPS

A

= earnings available to common / # of common shares

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7
Q

Price to Earnings Ratio

A

= CMV / EPS

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8
Q

Dividend P/O Ratio

A

= common dividends / EPS

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9
Q

BETA

A

1 ; stocks volatility in relation to market

Beta of 1.2, market 10%
Expected return = 12%
Actual return = 14%
Alpha = +2

Alpha is actual return

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10
Q

GROWTH

A

Equity funds like common stocks

*young investor concerned with impact of inflation, capital appreciation

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11
Q

INCOME

A

Bond funds

Fixed income investments

*retired

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12
Q

PRESERVATION of capital

A

MM instruments, CD’s, treasuries

*want to store $ ST

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13
Q

LIQUIDITY

A

MM instruments, treasuries, listed stocks- Nasdaq, NYSE

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14
Q

TAX RELIEF

A

Municipal bonds, DPP’s

  • high tax bracket wanting to generate more income or tax credits for historic rehabs or government housing
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15
Q

GROWTH & INCOME

A

Preferred stocks

  • Want high dividend paying stock
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16
Q

= 100 basis points

A

= 1 point = 1%

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17
Q

1 basis point

A

=$0.10

0.01%

1/100 of 1%

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18
Q

1 point

A

= $10

1% of $1,000

19
Q

FED FUNDS RATE

A

Bank to bank, $1MM+, most volatile

20
Q

DISCOUNT RATE

A

FRB to banks, base rate for country

21
Q

BROKER CALL LOAN RATE

A

Banks to BD

22
Q

PRIME RATE

A

Banks to Corporations (Citi to PG&E)

23
Q

Unqualified

A

Good to go. No qualifiers.

Municipal bonds

24
Q

Qualified

A

Questionable qualifier. Not good to go.

Municipal bonds

25
Q

Ex-legal

A

Without legal opinion

26
Q

Eastern divide

A

Unsold gets divided amongst members pro rata

27
Q

Western divide

A

Only responsible for own shares

“Divide is in the West”

28
Q

Combined Equity

A

= (LMV-DR) + (CR-SMV)

29
Q

CR

A

= SMV + Reg T

30
Q

Equity (short)

A

= CR-SMV

31
Q

Equity (long)

A

= LMV-DR

32
Q

Maintenance Call LMV

A

25%

= DR / .75

33
Q

Maintenance Call SMV

A

30%

= CR / 1.3

34
Q

NAV

A

= assets-liabilities/# of shares outstanding

= POP-SC

35
Q

POP

A

= NAV + SC

= NAV / (1-SC%)

36
Q

SC %

A

= SC / POP

37
Q

SC $

A

= SC% x POP

38
Q

MMS

A

T-bills, TANS/RANS/BANS, CD’s, commercial paper, bankers acceptance, Fed fund loan, repo agreement

39
Q

Bond = $1,000

A

100 = 100%

40
Q

Bond = $1,000

A

100 = 100%

41
Q

Vertical spread

A

Price spread/$ spread

Different XP

42
Q

Horizontal spread

A

Calendar spread/time spread

Different expiration

43
Q

Diagonal spread

A

Different XP and expiration

Series 7 (1 decks)

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