General Principles Flashcards

1
Q

Mental Accounting

A

viewing money from different sources in different ways. Attached to something so view it in a different way than something else.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What to do when client has unrealistic return assumptions

A

use conventionally accepted return assumptions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Qualitative Data

A

no numbers, information, subjective

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Disclosure of material conflicts of interest

A

written OR orally given

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Fee based

A

fees AND commissions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Net worth increases

A

investment growth and investments in accounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Insured investments

A

securities in brokerage accounts, cash accounts up to $250k

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

FDIC insurance stipulations

A

$250k per depositor, per INSURED, for each category.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Regulatory body of brokerage companies

A

SEC through FINRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

QTPs vs. UTMAs

A

BOTH present interest gifts.
QTP owner controls when money used.
UTMA custodian loses control @ age of majority.
QTP CAN change bene
UTMA CANNOT change bene

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Am. Opp Credit

A

100% of first $2k + 25% of next $2k.
NO FELONIES
only covers first 4 years.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Lifetime Learning Credit

A

PER PERIOD
$2k max
undergrad AND grad school

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Recession

A

2 consecutive Qs of down markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Depression

A

6 Qs of negative GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Punitive Damage taxability

A

taxable EXCPET with wrongful death claims

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Compensatory Damage taxability

A

physical injuries: tax free
non physical: taxable
medical expenses: tax free

17
Q

Ways to access home equity

A

reverse mortgage
home equity loan
sell home
refinance mortgage

18
Q

Registration process to sell equity based products

A
  1. Associate with B/D
  2. Register with FINRA on U4 form
  3. Pass exams
  4. CRD makes registration with FINRA uniform across states
19
Q

registration with FINRA/as inv. advisor

A

no commissions: only Inv. advisor
commissions: FINRA

20
Q

liability for credit cards

A

$50 per credit card

21
Q

Tort law

A

when agreement creates contract exposure

22
Q

Home equity interest deductibility

A

ONLY for improvements on home
$750k MFJ & Single
$375k MFS

23
Q

Commingled funds

A

CANNOT comingle in a firm’s general accounts.

24
Q

Attorney registration as inv. advisors: exceptions

A

ONLY if incidental to practice

25
Q

Trough to recovery industry that performs well

A

auto manufacturing

26
Q

Negative to positive yield curve

A

conservative investor: invest in Treas. bonds (longer term securities)

27
Q

Fee ONLY

A

% of AUM, no commissions