Random #12 Flashcards

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1
Q

Customer made check out inadvertently to wrong co.

A

Sent back to customer 3 business days

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2
Q

Can I borrow $ for a customer

A

No unless customer is my mortgage banker- no personal loans

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3
Q

Blanket recommendations

A

No unless it’s your specialty

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4
Q

Change in control of IA firm

A

Customer must consent

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5
Q

Customer statements have to be provided how often (at a minimum)

A

Quarterly

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6
Q

Form ADV part 2 is

A

The brochure

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7
Q

Form ADV 2A vs 2B

A

ADV Part 1 is also the vehicle to upload your Firm’s Form ADV Part 2A (Firm Brochure) and Form ADV Part 2Bs (Brochure Supplements).

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8
Q

ADV part 1A

A

Info about the firm- Part 1A is required whether you’re registering with the state or the SEC.

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9
Q

ADV 1B

A

Part 1B is only required if you are registering with state authorities- Additional disclosures about your business

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10
Q

ADV 2B

A

contains required information about the individuals providing financial advice at your firm

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11
Q

ADV 2A

A

Part 2A requires you to write a narrative brochure where you’ll lay out information about your firm’s services, fees, conflicts, and personnel. The instructions require 18 disclosure items

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12
Q

Cyber security and data protection for IA firms

A

Written supervisory procedures- must address; How are we protecting customers?

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13
Q

Equity investments- ADRs are?

A

Foreign security with a domestic wrapper- can diversify a customer with a foreign security- subjects to currency risk

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14
Q

Preferred stock preferential treatment in 2 areas:

A

1-Can’t pay dividend to common if in arrears

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15
Q

Features of preferred stock

A

Income stream- stated as a max not a min- so we can use discounted cash flow

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16
Q

2 versions of discounted cash flow

A

Common stock- Dividend growth model )can’t be used with preferred. This results in a higher growth model
Preferred stock- dividend discount model = dividend stays the same

17
Q

Current yield

A
18
Q

Yield to call

A
19
Q

Bonds most volatile

A

Long maturity, lowest coupon is most volatile

20
Q

Eurodollar bond

A

Issued outside US- but in $$ - no currency risk

21
Q

Eurobond

A

does have currency risk

22
Q

Commercial paper

A

Does not have to be registered

23
Q

Mutual funds- open end vs closed end

A

Open end continually offering new shares- federally secured and registeredclosed end trading

24
Q

Break point sale

A

BAD- trying to max commission by avoiding

25
Q

REIT vs open end

A