Part 4 Flashcards
JTWROS
equal ownerships, pass to survior
Tennis in common
can be unequal, passes to estate
Tenancy by the entirety
limited to spouses, permission needed for sale or gift, primarily for real estate
unlimited number of members
LLC
taxed like a partnership
LLC
easy to dissolve
LLC
S Corp
Limited liability
100 shareholder
S Corp
Risk limited to investment
C corp
corp is a taxable entity
C corp
raising large amounts of capital
c corp
Transfer on death
avoids probate on first to die
Strategic asset allocation
long term
tactical asset allocation
short term
buys when others selling
contrarian
runs hundreds of thousands of trails based on varying factors: rate of return, inflation rates and interest rates
Monte Carlo Simulation
borrow or lend money at the risk free rate of return
Capital market theory components
expected return and variability
capital market theory components
diversify by using securities with a low or negative correlation
Modern Portfolio theory
used to determine the required rate of return & systematic risk
Capital Asset Pricing Model
Captial asset pricing Model
Risk Free rate + B(market Return - RF)
All investor have equal access to the same market information, Cant beat the market
Efficient market hypo
Weak form
information everyone knows: technical analysis
Semi-strong form
the information available with some effort, company financials, fundamental analysis
Strong form
the information available to insiders, no benefit
Stock position plus option position
hedging
using leverage
margin
High-Frequency Trading
Proprietary trading using high-speed systems to monitor and submit large numbers of orders to the market
Dark pools of liquidity
institutional traders in large blocks of trades without impact to public quotes or prices
Measures risk adjusted return
sharp ratio
Standard and Poors 400
400 Mid-cap stocks
Russell 2000 indec
2000 small cap stocks
EAFE
europe, australasia, and far east
Wilshire 5000
broadest
3500
529
No age limit for contribution or withdrawls
no earning limitations
10% penalty
may roll over to anther state plan once per 12m onths
states set max limits
assets under the control of account owner
UGMA/UTMA
one child per owner
irrevocable
no limit to gift size
coverdell ESA
after tax
2000 max a year
contributions may be made untill 18th birthday
earning limits
use before 30 otherwise taxed
