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Investments CFP > Pooled investments > Flashcards

Pooled investments Flashcards

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CFP® flashcards
1
Q

Pooled investment

A

Multiple investors contribute assets to be held and invested as a single group

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2
Q

Index securities actively or passively managed?

A

Passively

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3
Q

Pooled investments are pass through for tax purposes meaning

A

interest, dividends, gains and losses are passed to the individual investor

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4
Q

Pooled investment interest and dividends taxed how

A

ordinary income

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5
Q

Pooled investment capital gains taxed how

A

as capital gains

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6
Q

Open ended fund has what capital structure

A

variable

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7
Q

closed end funds have what capital structure

A

Fixed

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8
Q

How would shareholders of a closed end fund liquidate their shares?

A

Secondary market

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9
Q

What happens when you add or withdraw money from an open end fund

A

creates or eliminates shares

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10
Q

ETFS and open ended funds trade at what value?

A

NAV

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11
Q

Closed end funds trade at what value?

A

discount or premium to NAV depending on supply/demand of secondary market

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12
Q

ETFS open end or closed end

A

Closed end

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13
Q

Do ETFs sell at a discount or premium?

A

No bc institutions are able to exchange etf shares for individual securities and vice versa which keeps an etf on track with the index its tracking

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14
Q

ETFs are open to who and closed to who

A

Open to institutions but closed to individual investors

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15
Q

Advantage of ETF over open end mutual funds

A
  • trade during day
    -capital gains may be managed, not incurred by activity of other investors
    -low cost due to operating cost
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16
Q

Disadvantages to etf over open end mutual fund

A

commission to buy or sell shares

17
Q

UITs publicly traded?

A

No

18
Q

UIT open or closed end

A

Closed but not publicly traded

19
Q

Bond UIT would liquidate when vs stock UIT

A

Bond liquidates as securities mature, stock would liquidate at predetermined date

20
Q

How does investor use UIT

A

hold basket of securities and collect income and principal through time until all principal has been returned

21
Q

UITS active or passive?

A

Passive

22
Q

Drawbacks to mutual funds

A

Charge fees
often have minimum investment

23
Q

Index securities cost is what vs actively managed fund?

A

Lower

24
Q

Hedge funds use what strategies

A

leverage, long, short, derivatives, domestic and international

25
Q

Hedge funds are set up as what structure?

A

private investment partnership

26
Q

Hedge funds open to what type of investor?

A

Accredited, high initial investment amount

27
Q

Hedge funds are unregulated why

A

Because they only cater to sophisticated investors

28
Q

Hedge fund liquid or illiquid?

A

Illiquid

29
Q

Hedge funds got their name how

A

because they could hedge against market downturn with ability to short the market, now they use many different strategies

30
Q

Limited partnership

A

two or more partners united to conduct business jointly to the extent of the amount of $ the partnership has invested

31
Q

Limited partners liability limited to what

A

Only what they invested

32
Q

General partner liability is what

A

NOT limited, can be sued personally

33
Q

Do limited partner receive dividends?

A

No they have direct access to to flow of income and expenses

34
Q

Managed account

A

held by private investor and managed by a professional specifically tailored to that investor

35
Q

Difference between mutual fund and managed account

A

managed acct is tailored for you vs mutual fund is managed on behalf of many investors

36
Q

Separately managed accounts

A

privately managed investment account opened thru brokerage or advisor that uses pooled money to buy individual assets. Investor directly owns the securities instead of shares of a mutual fund. Usually 100k or more

Investments CFP (14 decks)

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