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Series 66 > Series 66 Terms to Know > Flashcards

Series 66 Terms to Know Flashcards

1
Q

Where must a BD register?

A

Anywhere they ahve an office, or direct communication to a retain client

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2
Q

Where must an agent of a BD register?

A

Accept/Place orders for securities

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3
Q

Where must a Federally Covered RIA register?

A

Must register with the SEC, but file a notice filing with the state Admins.

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4
Q

Where must a Federally Covered IAR register?

A

Anywhere they have an office

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5
Q

Where must a state IAR register?

A

Any state they have an office and/or >5 retail clients

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6
Q

Where must a state RIA register?

A

Any state they have an office and/or >5 retail clients

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7
Q

What is Whole Life Insurance?

A
  • Fixed Premium
  • General Account Only
  • Garunteed Cash Value and Death Benefit
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8
Q

What is Varible Life Insurance?

A
  • Fixed Premium
  • General and Seperate Accounts
  • Guaranteed Minimum Death Benefit
  • No gauranteed Cash Value
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9
Q

What is Variable Universal Life Insurance?

A
  • Flexible Premiums (May be skipped)
  • Seperate Account
  • No gauranteed cash value or death benefit
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10
Q

What is Term Life Insurance?

A
  • Fixed period of time
  • Appropiate for younger investors with kids
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11
Q

What happens when all the premium is payed on term life insurance?

A

There is no value

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12
Q

What is Strategic Asset Allocation?

A

Asset allocation w/ rebalancing

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13
Q

What is Tactical Asset Allocation?

A

Market Timing

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14
Q

What is Buy and Hold Strategy?

A

Passive strategy, inappropriate for wrap accounts

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15
Q

What is indexing?

A

A low cost, passive strategy, which has no concern for valuation and can not beat the market

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16
Q

What is a 529 Plan?

A

used for qualified educational expenses for primary and secondary education. more benefitial then coverdall for financial aid purposes

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17
Q

What is a QRDO?

A
  • Qualified Domestic Relations Order
  • Allowed distributon of qualified retirement plans without penalty
  • Rolled into an IRA in your name
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18
Q

What is an HSA?

A

Health savings account for high deductable health insurance plans

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19
Q

What are Alimony payments and how are they taxed?

A
  • Financial payment after divorce
  • Not tax deductable, not taxible income for person receiving
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20
Q

The Secure Act and 529

A

529 Plan holders can use 10K annually to pay for pricate school tuition and books, and 10k lifetime to repay student loans

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21
Q

What is a deffered compensation plan?

A

Non-qualified plan, may choose only sectain employees, IRS does not need to approve.

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22
Q

What is a reason for denial of registration?

A

Last 10 years. must be a felony CONVICTION

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23
Q

When is an audited balance sheet required by an advisor?

A
  • Has custody of client funds or securities
  • Has full discretionary authority over a client’s account
  • Solicits prepayment of advisory fees
    − For federal-registered advisers: more than $1,200 in fees per client, six months or more in advance
    − For state-registered advisers: more than $500 in fees per client, six months or more in advance
24
Q

What is an ELN / Stuctured Product?

A

Debt insturment in which the principle at maturity is tied to an equity market
May not be suitible for fixed income investors

25
What are class C mutual Funds and who are they suitible for?
They are a level load fund, suitible for large investors with short time horizons
26
What does behavioral focus on?
- Investors are not always rational - Investors have limits to their self control - Investors are influenced by thie rown biases
27
What is IRR?
- Neccisary return that make an investment worth the future goal - Time value of money - Rate that makes NPV = 0
28
What is NPV?
Profitability of an Investment difference between PV and cost
29
What is current ratio?
- CA/CL - Compares companies of different sizes in the same industry
30
What is Quick Asset Ratio / Acid Test?
- TCA - Inv. / TCL
31
What is dividend discount model?
Div/Expected rate of return =PV of stock
32
What is the Debt-to-Equity Ratio?
- Financial Leverage - Bonds+PS / Common Stock+Cap Sur+RE (SE)
33
What is earnings per share?
Company profits for each shareholder - NI - Preffered Dicidend / #of Common shares outstanding
34
What do Growth Investors look for?
- High P/E ratio - High P/B ratios - High Retained Earnings - Low Div Payout
35
What is the price to earning ratio?
- Market price / EPS
36
What is value investing?
- High EPS - Low P/E ratio - HIgh Div Yield Low P/B Ratio
37
What is an equity index annuity?
- Can not loose principle - Cap on your retunr - No negative reset
38
What is price-to-book ratio?
- How much tangible asset is actually worth - We want a low ratio to invest - Book Value = Assets - liabilities
39
What is duration?
- Measure of bond volitility - Long and Low
40
What are TIPS?
Sei annual Adjustmetns based on CPI (Principle) - Coupon rate does not change
41
What are SPACS?
Blind pools that offer shares of a shell company, go out and acquire companies - $10/unit
42
What is discounted cash flow?
- How much income a bond will pay over the life - Fair Market (PV) price of a bond based on future cash flows
43
Open end vs closed end fund pricing?
Prived once per day at 4pm Can trade above or below NAV
44
S Corp v. C Sorp ?
S Corp - Pass Through of Income & Losses, Avoid Corp Tax. LL, Shareholders taxed at thier income rates C Corp - Pays corporate taxes, Double taxation for Shareholders
45
What is a 403B?
Tax sheltered for Teachers, saints, and agents. Qualified
46
What is a 457?
Gov't and Non profits Qualified Not Subject to ERISA
47
What type of accoutns avoid probate?
JTWOS TOD One w Beneficiary
48
Tiem Weighted v Dollar Weighted?
Time - Evaluated Managers Dollar - investmetn choices
49
What is the Sharpe Ratio?
Meaure of risk adjusted return
50
What is the modern portfolio theory?
Different asset classes to maimize return based on amount of risk willing to take Efficietn frotier, optimial portfolio returns based on risk
51
What is CAPM?
Expected return (beta) based on volitility of the market (risk v return)
52
What is a 401(a)
Savings acct for gov't employees
53
Qualification V Coordination?
IPO = Qualification IPO & SEC registration = Coordination
54
What is Form ADV
Registration document for the IA
55
What is Form ADV pt. 2
Used as disclosure document for IA. not Req.
56
brochure delivery requirments?
At or prior to contract date If not 48 hours prior, have 5 day window material changes each year. Fed = 120 Reg Authortity = 90

Series 66 (14 decks)

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