Packaged Products Quizzes Flashcards
Primary Function of a custodian bank
Safekeep the assets of the fund
A variable Annuity is what type of vehicle?
Participating Unit Investment Trust
Sales Charge Percentage Calculation?
Ask-Bid/ Ask
Mutual Funds with auto reinvest will invest in?
Dividends at NAV and Capital gains at NAV
Who most Likely invests in BDC
High Net worth Investor Seeking Dividends
Max sales charge imposed on a mutual fund purcahse?
81/2% of POP
Mutual fund shares are
Managed, Redeemable, open end funds
Closed end funds are
Securities traded on Stock market, negotiable, managed
Mutual fund offering price calculation
NAV / 100 - sales charge %
What are defined as “investment companies” under act of 1940?
Face Amount Certificate company, UIT, Management Company
What is the benefit of buying Raw Land?
It is not depreciable or depletable, no tax credits are allowed and the ONLY reason to buy is for the appreciation potential
What does a letter of intent do?
Can cover a period of 13 months, inclusive of a 90 day backdate. The extra shares can be purchased at the lower sales charge and are held in escrow until the letter is complete.
What are ETF’s?
Exchange Traded Funds: index funds such a SPDR’s (S&P 500 index fund), DIAmonds (Dow industrial Average), and Qubes( NAsdaq 100 index Fund shares)
ETF’s are compared to index mutual fund and traded throughout the day and can be purchased on margin. They are less expensive to purchase compared to mutual funds.
The main difference between a closed end fund and an open end fund?
Capitalization.
What is true of mutual fund offerings?
Fund shares can only be sold to the public at the Public Offering Price as stated in the Prospectus
What type of REIT offers an immediate depreciation benefit
Existing Housing
REIT’s may be organized as what?
Trusts. reiTrust
A well drilled on leases adjacent to proven reserves in known as?
A step out well
Which investments are suitable for a retiree?
Government Bond fund, Money Market Fund or Insured
Coporate bond fund.
NOT Special situations funds - these are only for wealthy investors.
An oil and gas program designed to take advantage of the depletion allowance would be?
An Income program
Exploratory Program
Limited partnership that drills for oil and gas far away from existing fields- known as “wildcat” wells. These programs provide high initial deductions and low mineral rights costs. This is a high risk, high return program.
Developmental Program
An oil and gas partnership that drills adjacent to existing fields.
Cost of drilling is 100% deductible
Income Program
Buys exiting older wells intended to strip out remaining oil with the oil revenue partly sheltered by a depletion deduction
Combination Program
Oil and gas program that combines exploratory, developmental, and income programs into one overall combined program.