Random #10 Flashcards
When a donor makes a gift of securities, the cost basis to the recipient is known by which of the following terms?
Carry over basis
When a company repurchases its own stock, it results in which of the following for net assets and stockholders’ equity?
Decrease
What is a wash sale
an IRS rule that prevents a loss being taken on the sale of a security if that same security or a substantially identical one is then bought within the same 30 day period.
When an account is held as tenants in common, if one party dies, what happens to the assets of that deceased party?
they go to the deceased’s party estate
The ratio that is concerned with the firm’s capital structure is
The leverage ratio (or solvency ratio) is concerned with the firm’s capital structure. It is used to show the extent to which debt is used to finance the firm’s assets.
What is a buy stop order?
an order to buy a security which is entered at a price above the current offering price
What is a fill or kill order?
order to buy or sell a stock that must be executed immediately in its entirety; otherwise, the entire order will be cancelled (i.e., no partial execution of the order is allowed
What is the bond ratio?
used to measure the financial leverage of a firm based on its level of long-term debt it has issued.
Reverse churning
the practice of placing inactive accounts (or accounts that do not trade frequently) into fee-based programs that charge an annual fee based on the assets in the account. This fee covers all advice and execution charges.
How many different exp dates for optionable stocks?
At any given time, a minimum of four different expiration months are available for every optionable stock.
FINRA Rule 3310
Rule 3310 is associated with reporting a fallacious purchase or sale price.
SEC 10-B10
Written confirmation of a trade
Reg T
Limits the just how much an investor can borrow from their broker to purchase securities on margin. By setting a limit of 50% borrowed funds, the Federal Reserve minimized the amount of trouble investors can get into if there’s a margin call.
Lagging indicator
Shows up after, or “lags behind,” the changes which caused it.
Downfall of IRR
RR does not measure the absolute size of the investment or the return. So, IRR can favor investments with high rates of return even if the dollar amount of the return is very small.
