Investment Company Flashcards
Investment company act 1940
Difference between UIT and open-end
The UIT is unmanaged
Types of REItS
Equity REITS
Hybrid REITS
Mortgage REITS
Nvr nvr prefrred( there is no such thing)
Bankruptcy order of payment
Secured debt
General creditors
Subordinated debentures
Preferred stockholders
Purchase or redemption order for investment company
Shares price based on
NAV next computed after the fund receives the order
What method for mutual funds is not available for determine cost basis of stock ?
Average cost basis
IRS allows using the average cost basis to determine the cost basis of redeemed mutual fund shares
DPP(Direct Participation Program)
Which kind of risk is associated with this program
Legislative risk
Liquidity risk (tough to get out)
Quality of mgmt
The price paid for a listed REIT most similar pricing to
A Closed-end investment mgmt company
What is NOT associated with an existing real estate direct partnership program
Appreciation potential
Because it’s existing and not new
Raw land partnerships seek
Appreciation
Existing property and new-construction partnerships seek
Passive income and tax deductions
Historic rehabilitation partnerships allow not just deductions
But also actual tax credits
An investor purchasing a NON traded mortgage REIT is exposed to which risk not found w others
Liquidity
Because when a REIT is nontraded liquidity is limited
What is not an advantage of a REIT ?
Tax deferral
IRS does not permit tax deferrals
The general partner and limited partner pick up which drilling cots
The GP picks up Tangible
The LP picks up Intangible
