Is it a security? Flashcards
certificate of interest in a mining lease
Yes
fixed annuity
No, but variable contracts (e.g., variable annuities or variable life insurance) are considered securities
Which of the following is not a security: an equity-indexed annuity, variable life policy, bank stock, or swap contract?
Equity-indexed annuities are a type of fixed annuity and are therefore not securities
The USA considers preorganization certificates, prime bank notes, and voting trust certificates to be __________
securities
a 401(k) plan
No
a Keogh plan
No, but Keogh plan participation is considered a security
The annuity with growth dependent on the performance of securities in a separate account is called a __________ annuity
variable annuity
a preemptive right
Yes
an option on a commodity futures contract
Yes. Options are securities, but futures contracts alone are not. Options may be tied to an equity, index, or currency
a variable life insurance policy
Yes, but a term or universal life insurance policy is not considered a security
Options on commodities
Options are always considered securities (e.g., options on futures, a currency, an index, or equities)
True or False: Variable annuities are not securities and are, therefore, not subject to registration
False. Any variable products are considered securities. However, fixed insurance products are not securities
a limited partnership
Yes
an investment interest in livestock
Yes
treasury stock
Yes. Treasury stock is stock that was issued and subsequently repurchased by the company
True or False: Two friends, anticipating a rise in value, purchase property. The property is considered a security
False
True or False: Precious metals are not considered securities
True
What four elements are required for an investment contract to be considered a security?
1) An investment of money, 2) A common enterprise, 3) Efforts made by a third party, 4) An expectation of profits
a whiskey warehouse receipt
Yes
a warrant
Yes. Warrants are financial instruments that allow investors to acquire stock at a preset price
True or False: An American Depositary Receipt (ADR) is a security
True
an endowment life insurance policy
No
IRAs and Keogh plans
False. The participation in these plans (what goes in the plan) is considered a security, but the plan itself is NOT
True or False: Exchange-listed futures contracts are securities
False. Futures and forward contracts are not securities
