Random #13 Flashcards
The total cost (the price) of an option is called
it’s premium
Under the guidelines of Subchapter M of the Internal Revenue Code, a REIT can avoid being taxed as a corporation by receiving what % of income from RE?
75%
The lowest potential yield that can be received on a bond without the issuer actually defaulting is which of the following?
Yield to Worst
Short-term securities, especially treasury bills, held by banks to increase their liquidity are known as which of the following?
Secondary reserves are high-quality, short-term marketable securities- more liquid!
DNR
A “Do Not Reduce” (DNR) order is a trade type used on a buy or sell order. It tells the broker not to decrease the limit price on buy-limit and sell-stop orders on the record date of a cash dividend. When a stock goes ex-dividend the price is usually reduced by the amount of the dividend.
Uniform Prudent Investors Act of 1994
sets the basic standards by which all investment professionals acting in a fiduciary capacity must abide.
market on open, market on close orders
On a market-on-open or market-on-close order, the investor wants the order executed on the opening or closing of the market or as reasonably close to the opening or closing as practical. Partial executions are allowed.
The Uniform Gift to Minors Act requires how many persons to be on the account
One custodian and one minor
Coincident indicator
an economic measurement that changes directly and simultaneously with the business cycle.
Because of the time value of money, a dollar earned in the future…
Won’t be worth as much as a dollar today
Reverse Churning
Putting inactive accounts into a fee based plan and charging an annual fee
What is a hypothecation agreement
pledges the customer’s securities for the loan
When a customer signs a loan consent agreement for a margin account he does which of the following
Allows the brokerage to lend out securities
Which entity is not one of the types of investment companies set forth by the Investment Company Act of 1940.
Commercial Bank is not an investment co.
FINRA 3310
reporting a fallacious purchase or sale price.
The SEC rule that requires broker-dealers to send written confirmation for any transaction in a customer’s account is which of the following?
SEC Rule 10B-10
A private placement is also know as
A reg D offering
QDRO
Distribution by court order to a third party
457 comp plans are municipal plans and are not covered under ERISA. T or F
True
Dividend Growth Model
About taking the dist of the dividends to present value
Div Growth Model
Dividend income stream expected to grow
Capital Asset Pricing Model
Describes the relationship between Systematic risk and expect return for assets
