Introduction to Investment companies Flashcards
municipal fund securites
funds or trusts offered by individual states or local governments
Plans regulated by the MSRB
municipal fund securites
Program disclosure document is required to sell
municipal funds
Inverse ETF
strategy to hedge against market declines
“short” funds
Inverse ETF
Investment company act of 1940
defines an investment company to hold and manage a portfolio of securities for its investors
Asset requirements of an investment company
40% of total assets in investment securities
529 prepaid tuition plans
lock in tuition prices for the future
To receive full benefits of these plans students need to attend in state public college
529 prepaid tuition plans
NAV ( Net Asset Value)
price investors receive when they redeem mutual fund shares
Calculated at the end of each business day
NAV and POP
Diversified company rule
75 - 5 - 10 rule
The 75- 5 - 10 rule
- 75% of assets invested
- no more than 5% of fund assets invested in 1 issue
- no more than 10% of any corporation’s voting stock
Diversification
reduces nonsystematic risk
business risk
the decline of value for an individual security