Random #4 Flashcards
In the event of a bankruptcy who is paid first, fixed income investors or common stock holders?
Fixed income investors
When are coupon payments made?
Monthly, Qtrly and Semi-annually
When do T-Notes mature?
Between 2-10 years
Does the Uniform Securities Act address law at state or federal level?
State
What are each states security laws called?
Blue Sky Laws
What is the Sarbanes Oxley Act?
Prevent fraudulent financial reporting by corporations
How many people can a private placement be offered to?
Up to 10 for a 12 month period
Are futures contracts considered securitites?
No
when are testimonials in advertising allowed and not allowed?
B/D= allowed
IA- no allowed
Rule 4370?
Each member must create and maintain a written business continuity plan identifying procedures relating to an emergency or significant business disruption.
Debt to Equity Ration?
Assets - Liabilities = Equity. Liabilities / Equity = Debt-to-equity Ratio.
Standard Deviation?
Standard deviation risk measure determines the average rate of return and how this average rate varies.
Discounted payback period for a business:
4 + (34,902 / 37,452). where 4 is the last negative year and 34902 is the negative cash flow in that year divided by the projected positive cash flow. In this example the # is 4.93 years to breakeven and recoup investment.
What 3 things are used to calculate the Dividend Growth Model to determine a stocks value (only used for cos that pay dividends):
The three main inputs include the expected annual dividend per share, the required rate of return, and the dividend’s expected growth rate.
What is used to measure benchmark correlation or how closely a change in price of one asset correlates to a benchmark (how closely a mutual fund correlates to it’s benchmark of say the S&P 500) or
R-Squared
What is used to measure volatility or sensitivity of a fund or stock to the benchmark (like the S&P 500)?
Beta (Above one is more sensitive, below one is less sensitive, one is exactly as sensitive)
What measures the money manager or investors ability to profit when the benchmark is profiting?
Alpha (Greater than one is better performance than the benchmark) Must compare same asset classes
What is a private placement?
private private companies wishing to acquire a few select investors or by publicly traded companies as a secondary stock offering. Private placement is also referred to as an unregistered offering.
Does a private placement require a prospectus?
No