Series 65 Glossary Terms

Question 1

A tax-free exchange between like contracts. This provision applies to transfers from annuity to annuity, life to life, and life to annuity. It cannot be used for transfers from an annuity to a life insurance policy.

Answer 1

1035 Exchange

Question 2

A section of the Investment Company Act of 1940 that permits an open-ended investment company (mutual fund) to levy an ongoing charge for advertising and sales promotional expenses. This fee may not exceed .75% and, if above .25%, the fund may not describe itself as no-load.

Answer 2

12b-1 fee

Question 3

A tax-deferred defined contribution retirement plan offered by a private-sector employer.

Answer 3

401(k) plan

Question 4

A tax-deferred retirement plan available to employees of public schools and certain non-profit organizations.

Answer 4

403(b) plan

Question 5

Plans designed by states to provide tax-advantaged means of saving for eligible education expenses.

Answer 5

529 savings plan

Question 6

Those persons required under an investment adviser’s code of ethics to report their personal securities transactions and holdings on a quarterly basis.

Answer 6

access person

Question 7

Any institution or individual meeting minimum requirements for the purchase of securities qualifying under the Regulation D registration exemption.

Answer 7

accredited investor

Question 8

The period during which contributions are made to an annuity contract.

Answer 8

accumulation stage

Question 9

An accounting measure used to determine an annuitant’s proportionate interest in the insurer’s separate account during a variable annuity’s accumulation (deposit) stage.

Answer 9

accumulation unit

Question 10

A measure of a corporation’s liquidity, calculated by adding cash, cash equivalents, and accounts and notes receivable, but not inventory, and dividing the result by total current liabilities. It is a more stringent test of liquidity than current ratio.

Answer 10

acid-test ratio

Question 11

Active managers believe they can identify industries that are undervalued or overvalued in order to weight them appropriately and achieve returns in excess of the market.

Answer 11

active management style

Question 12

_____ _____ is used to compute the gain or loss on the sale or other disposition of the asset or security.

Answer 12

adjusted (cost) basis

Question 13

Gross income from all sources minus certain adjustments to income, such as deductible contributions to an IRA and net capital losses. It is the amount of income that will be subject to tax.

Answer 13

adjusted gross income (AGI)

Question 14

(1) The official or agency administering the securities laws of a state. (2) A person authorized by a court of law to liquidate an intestate decedent’s estate.

Answer 14

administrator

Question 15

A firm’s endorsement or approval of the social media content of a third-party site.

Answer 15

adoption

Question 16

A technical analysis tool representing the total of the differences between advances and declines or security prices. The ____/____ ___ is considered the best indicator or market movement as a whole.

Answer 16

advance/decline line

Question 17

Any promotional material where the firm has little control over the type of individuals being exposed to the material.

Answer 17

advertisement

Question 18

An account through which a registered investment adviser (RIA) or investment adviser representative (IAR) of the RIA provides investment advice to her clients for a fee.

Answer 18

advisory account

Question 19

Anyone in a position to influence decisions made in a corporation, including officers, directors, principal stockholders, and members of their immediate families. Their shares are often referred to as control stock.

Answer 19

affiliate / affiliated person

Question 20

For an advisory client, a transaction in which a person acts as an investment adviser in relation to a transaction in which that investment advisor acts as a broker for both an advisory client and for another person on the other side of the transaction.

Answer 20

agency cross transaction

Question 21

A debt security issued by an authorized agency of the federal government. Such issues are backed by the issuing agencies themselves, not by the full faith and credit of the U.S. government (except GNMA and Federal Import Export Bank issues).

Answer 21

agency issue

Question 22

allow individuals to invest in large-scale, income-producing real estate

Answer 22

real estate investment trusts (REITs)

Question 23

A transaction in which a broker-dealer acts for the accounts of others by buying or selling securities on behalf of customers.

Answer 23

agency transactions

Question 24

(1) An individual or firm that effects securities transactions for the accounts of others. (2) A securities salesperson who represents a broker-dealer or issuer when selling or trying to sell securities to the investing public; this individual is considered an agent whether he actually receives or simply solicits orders.

Answer 24

agent