Investments Flashcards
Standard deviation characteristics
Nondiversified, unsystematic, variability, total risk
Beta characteristics
Systematic, PRIME, volatility
Which bonds produce phantom income?
STRIPS, zeros, OID
t-bill vs t-note vs t-bond maturity
3-12 mo, 1-10 yr, 10-30yr
t-bill vs t-note vs t-bond amounts
$100-1M, $1k-100k, $1k-1M
Where does OID phantom income come from, how is basis affected
From discount, increases basis
Does GIC have interest rate risk
NO
EE/I bonds shared characteristics
issued @ face value, fed tax on interest @ redemption
I bond payments
guaranteed fixed rate + CPI variable rate 2x/yr
UIT characteristics
passive, self-liquidating, redeemed @ NAV, 1st sale: S6, 2nd sale: S7
ADR declared in what country
foreign
Marketable vs liquid
stocks, bonds, MF, ETFs vs cash, checking, CDs, MM funds, T-bills
Open end MF
new shares, purch/redeemed w/issuer
Does Fed control fed funds rate
NO - overnight bank to bank loan rates
normal vs lognormal
% vs $
Dividends/gains & basis
cash: doesn’t increase basis / reinvested: increases basis, don’t add to CF
Coefficient of variation
SD/average return
Risk adjusted return
Average return/b
When is barbell strategy good?
rising interest rates
What to buy when inverted –> normal yield curve
long term bonds
Return on equity
EPS/price
Black sholes
^exercise price - lower call value
QBI for REITS not allowed in
c-corp,retirement accounts
% investments in REITS
75% real estate, 15% securities
ETF characteristics
margin, sold all day, short sell, stoploss/limit
Who controls margin
Fed (Reg T)
Annualized return
(1+Rp)^n - 1
1933 Sec Act
primary market, transparent statements
1934 Sec Exch Act
SEC, secondary market
1940 Inv Co Act
mutual funds, hedge funds
1940 Inv ADV Act
IAs, SEC $100M
R2
Coefficient of determination
Increase coupon rate or YTM does what to duration
DECREASES
What does immunization protect from
interest rate fluctuations, reinvestment rate risk
How are dividends taxed
ordinary income
Recovered depreiation taxed at?
0.25
Value expressed in?
$$
Is preferred stock dividend fixed?
YES
AMT for bonds?
private activity bond interest
If stock is married to option
exercise & write LTCG
Why trade options rather than selling
avoid resetting CG clock
When do EE/I bonds produce phantom income
If owner elects to pay annually
alpha/treynor or sharp for diversified?
alpha/treynor
prime rate set by
banks
