Random #8 Flashcards
stock bashing
Stock bashing occurs when false information is used in ads in order to cause stock prices to decrease
bear raiding
Dumping shares on the market to lower price then buying back to manipulate the market
Interest rate swap
an agreement between two parties to exchange one stream of interest payments for another, over a set period of time. Swaps are derivative contracts and trade over-the-counter. No cash changes hands
private fund advisors are exempt from registering with the SEC unless their assets =
Over 150M; Small advisor exemption is under 25M
FINRA 3240
prohibits FINRA member firms or individuals from loaning or accepting loans from clients unless they are their parents, siblings, in-laws, or any other immediate family. Co-workers can loan each other money only if advisory business and/or investing are conducted.
4 elements of technical analysis
price and volume, indicators, identification, and charts
Emerging affluent category
$75,001-$150,000 and does not factor in net worth.
Arbitrage
when investors buy mutual fund assets at cheap prices and then sell them elsewhere at higher rates. This can occur when an investor has an exchange traded fund.
The Securities Act of 1933
first federal law to establish regulations for securities. The Securities Act of 1933 was created by legislators with the intent of assisting investors in making more educated investment decisions.
current ratio
liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year.
Systematic Risk
Natural disaster, pandemic, etc.
Un-systematic Risk
Something within the company, litigation, regulatory changes, etc.
Calculate sustainable growth rate
taking the company’s return on equity times the result of 1 minus the dividend payout ratio.
Rule 4370
Firms that are members of FINRA must sustain a written business continuity program that outlines how the firm will fulfill its existing commitments to its clients.
Diffreniate between strong-form, semi-strong form and weak form efficient market hypothesis
Strong form EMH is the theory that all information, including private information, is already factored into market prices of securities. Semi-strong form EMH is similar, but states that private information may be used to predict future price movements (although insider trading is still illegal). Weak form states that some publicly available information related to fundamental analysis may be used to predict future price movements.
