green light 2 Flashcards
COP
They represent an interest in a lease agreement used by a municipality.
they usually have maturities of two to ten years.
A dealer buys $10,000 face amount of bonds at 90 less 3/8 and marks up the bonds an additional 1/2. What is its profit?
THE 3/8 IS A DISCOUNT SO ADD IT TO THE 1/2
WHEN asking the $ amount of points between bonds
calculate the actual cost of both and just do the math.
When accepting an order for a retail client during the retail order period, the dealer that accepts the order is required to forward the following information to the syndicate manager:
Whether the client meets the requirements set by the issuer
Whether the order is for one which the customer is already conditionally committed
Whether the dealer has received another order for the same client
Any identifying information that is required by the issuer or the manager, with the exception of the customer’s name or Social Security number
The par amount of the order
name and ssn are not required
The senior syndicate manager is required, within two business days following the date of sale, to provide a summary of
all allocations of securities accorded priority over member orders
The summary must show for each category the aggregate par value, maturity date, and price (including any price different than the original list price)
confirmations
credit ratings
not on the confirm
If a particular yield curve denotes that short-term yields are rising,
There is a direct correlation in yield levels along the entire yield curve. This means that trends in short-term yields are felt throughout the yield curve and usually will move in the same direction. Thus, a rise in short-term yields will usually result in a corresponding rise in long-term yields and lower prices
alternative trading system that is limited to other dealers and sophisticated municipal market professionals (SMMPs) that will execute nonrecommended transactions,
he dealer is not required to evaluate each transaction. These systems allow participants to communicate anonymously, match buy and sell orders, and clear executed transactions.
pricing meeting
legal opinion
The legal opinion is actually prepared much earlier in the underwriting process.
municipal go bond ratios for analysis
debt to future value
debt to population
annual debt service to tax receipts and other revenue
Net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) is used to analyze
corporate bonds
When underwriting a municipal bond issue on a negotiated basis, disclosure to clients includes
underwriting spread
any fee received for distribution
initial offering prices for each maturity
liquidity
equal except for face
if all is the same the larger cd is more liquide
n a municipal bond underwriting, the difference between what the issuer receives and the production is known as the:
spread
Takedown
discount given tot he syndicate by managers of the syndicate
concession
sales group
Ad valorem taxes refer to property tax.
bond type is
GO bonds
exception to two principal rule
According to the MSRB rules, if a municipal broker-dealer has fewer than 11 full-time associated persons, only one municipal securities principal is required.
Dealer-to-dealer confirmations must be sent:
On the same day as the trade
A retransmittal of a close-out notice increases the execution date for the close-out by:
One business day
What would be the effect if the money supply was increasing more rapidly than the Federal Reserve Board’s target during a time when the budget deficit is increasing?
Treasury financing will increase
Treasury financing will increase
The Federal Reserve Board may tighten the money supply
If a municipal securities dealer is asked to evaluate the climate for a new issue of school district general obligation bonds they would analyze
Secondary market yields for the same security or similar
direction of interest rates
Local economic conditions (not country wide)
Placement ratio
What member of the distribution group isn’t bound to a selling percentage
members of the selling group
Short-term rates for municipalities would be higher than long-term rates when
There is a decline in bank reserves
When a bond is in default on interest payments, it will trade
flat, no interest accrues.
unpaid coupons are included in delivery
present holder gets interest if issuer resumes payment.
Although there can be no guarantee that interest payments will be resumed, all aspects of the trade are handled normally except for the computation of accrued interest
Treasury securities that are placed in escrow in connection with an advance refunding are referred to as:
State and local government securities
529 share classes
A is usually the longest
and have lower 12-b1 fees than b an c just like a mutual fund.
