Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Series 7 > Securities 4 > Flashcards

Securities 4 Flashcards

You may prefer our related Brainscape-certified flashcards:
Series 7 Top-off Exam flashcards
1
Q

Management company

A

Portfolio managed by specific objective

Ex.) growth, income, specialized (banking, technology, geographic area)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Open-end company

A

Continuous primary offering: every share is an IPO
Can issue common shares only
Company must redeem shares
No secondary market trading
Priced by formula, forward pricing, net asset value + $ sales charge = public offering price (NAV + $SC = POP)
8.5% maximum sales charge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Closed- end company

A 
Number of shares fixed
No prospectus required after IPO
Can issue common and preferred shares
Can issue debt instruments
Shares are not redeemable
After IPO shares trade in the secondary markets (exchange and OTC)
Priced by supply and demand
Commissions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Net asset value (NAV)

A

Fund Assets - Fund liabilities/ number of outstanding shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Public Offering Price (POP)

A

NAV + SC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

SC

A

$ Public offering price - net asset value

% public offering price - net asset value/public offering price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Variable Annuity (VA)

A 
Insurance company product
Priced like mutual fund (NAV + SC = POP)
No maximum sales charge
Early redemption fees
Must reinvest all dividends and gains
Earnings grow tax deferred
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Payout options: Lump sum

A

All earnings above cost basis taxed

Cost basis returned tax free

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Payout options: Random

A

LIFO
All earnings withdrawn first and are taxable
After all earnings are withdrawn cost basis is returned tax free

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Payout options: Annuitize

A

Lifetime monthly income
Each payment represents part earnings and part cost basis being returned
Only taxed on earnings portion, cost basis returned tax free

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Life only annuitization

A

Monthly payment

Payments end with life of annuitant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Period certain annuitization

A

Protect heirs
Period certain length specified in contract
Payments continue for length of period certain even if annuitant dies
If annuitant outlives period certain length, payments continue until annuitant dies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Joint and last survivor annuitization

A

Annuity on more than one life

Payments continue until last annuitant dies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Assumed interest rate (AIR)

A

Conservative estimate of return on investments in the separate account
Each period, the actual earnings of the separate account are compared with AIR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Direct Participation Programs (DPPs)

A

Business structure that reports to the IRS but is not taxed as a business entity
All tax consequences flow through to partners
Income is reportable
Expenses are deductible
Interests in partnerships considered illiquid
Partnership dissolves on predetermined date, assets liquidated, and proceeds distributed to partners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

General partners

A

Manages the partnership
May appoint others to manage the assets
Unlimited liability, can lose more than invested
Fiduciary responsibility to partners, can be sued
May not compete with the partnership

17
Q

Limited partners

A

No management responsibility
Passive investors only
Limited liability, cannot lose more than invested
No fiduciary responsibility
No limitations applied to other investments

18
Q

Real estate: raw land

A

Appreciation potential only objective
Very speculative
No depreciation deductions for raw land

19
Q

Real estate: New construction

A

No immediate cash flow
Rental income potential can only be estimated
Tends to appreciate faster than older properties
Depreciation deductions allowed

20
Q

Real estate: Existing properties

A

Immediate cash flow
Tends to be safer than new construction because cash flow is known
Depreciation deductions allowed

21
Q

Real estate: Government assisted housing

A

Tax credits for investing in public housing
Cash flow via rental income can be suspect
Appreciation is minimal

22
Q

Equipment leasing

A

Typically airline and railroad equipment or computers

High depreciation potential of equipment due to obsolescence

23
Q

Oil and Gas drilling: exploratory

A

Drilling in new areas

High risk and reward

24
Q

Oil and gas drilling: developmental

A

Drilling in areas where resource has been previously found

25
Q

Oil and gas drilling: balanced

A

Both exploratory and developmental drilling

26
Q

Oil and gas income

A

Buying existing producing wells
Immediate production and income
safest of all oil and gas partnerships

Series 7 (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions