Missed Topics Flashcards
What theory says that economic growth results from lower taxes and reduced government spending?
Supply side theory
In a general partnership, what must occur with any changes to the partnership?
Clients must be informed in a reasonable amount of time
Of a broker dealer and investment advisor, how are they each registered with the SEC?
BD is under the securities exchange act of 1934
IA is under the IA act of 1940
What is not allowed in terms of compensation for an IA?
Performance-based
What is the maximum number of bitcoin?
21 million coins
In options, who has right and who has obligations?
Sellers (long, own) have rights.
Buyers (short, need) have obligations
(T/F) An investment advisor must register with the SEC if he acts as an IA to a company register under the investment advisors act if 1934.
False. Investment advisors act of 1940
Who does the ADV brochure cover?
Anyone that determines general investment advice to clients
Where can derivatives be sold?
Listed exchanges (not OTC)
What does SPAC stand for?
Special purpose acquisition company
What does a leveraged inverse ETF do?
It multiplies the effect of an inverse EFT by 2-3x (goes up when the market goes down, at a greater pace)
What kind of minimum net worth must a IAR have?
None. The net worth minimums are on the IA
If a client orders the purchase of shares before 4pm, what is the price basis used?
It is the forward price rule. 4pm is the cutoff. Shares are based off the public offering price (POP)
Beta is a representation of which kind of risk?
Systematic
What kind of P/E ratio and dividend would you expect from growth and value stocks
Growth: High P/E low div
Value: low P/E high div
What is form ADV-E, who fills it out and who submits it?
ADV-E is the surprise inspection form for those who hold custody over client funds. The IA fills out the form, but the independent accountant submits the form.
What type of risk is common to all fixed income securities?
Interest rate
What are exchange traded notes?
Unsecured debt issued by banks, not insured by FDIC.
What is commercial paper?
Unsecured debt obligations of corporations needing short-term financing. Not registered, negotiated terms, backed by money-market deposits.
T/F A key component of hiring a solicitor is to ensure that they are not statutorily disqualified from registration
True - ensure against bad actors
What, in distributed net income (DNI), is not included as part of the calculation?
Reinvested capital gains
What does the Financial Crimes Enforcement Network (FinCEN) do?
Responsible for the bank secrecy act administration
T/F Investment Advisor Representatives are not excluded from the USA definition of investment advisor.
False
How is the bond conversion ratio determined?
Divide bond par by the price per share to convert
