Series 7 terms Kaplan Flashcards
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Acceptance, Waiver and Consent
A process for settling a change or complaint that is quicker and less formal than the regular complaint procedure. Related Item(s) Code of Procedure
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Acceptance Ratio
A ratio compiled by “The Bond Buyer” indicating the number of new municipal issues that have sold within the last week. Syn. Acceptance Ratio
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Account Executive (AE)
An associated person engaged in the investment banking or securities business. This includes any individual who supervises, solicits, or conducts business in securities or who trains people to supervise, solicit, or conduct business in securities. syn. Registered Representative (RR)
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Accredited Investor
As defined in Rule 502 of Regulation D, any institution of individual meeting minimum net worth requirements for the purchase or securities qualifying under the Regulation D registration exemption. An accredited investor is generally accepted to be one who:
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Accretion of Bond Discount
An accounting process whereby the initial cost of a bond purchased at a discount is increased annually to reflect the basis of the bond as it approaches maturity.
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Accrual Interest
The interest that has accumulated since the last interest payment up to, but not including, the settlement date and is added to a bond transaction’s contract price.
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Accumulation Account
An Account established to hold securities pending their deposit into a municipal securities investment trust.
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Accumulation Stage
The period during which contributions are made to an annuity account. Related item(s): Accumulation Unit; Distribution stage.
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Accumulation Unit
An accounting measure used to determine an annuitant’s proportionate interest in the insurer’s separate account during an annuity’s accumulation (deposit) stage. Related Item(s) accumulation stage; annuity unit; separate account.
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Acid-Test Ratio
A measure of a corporation’s liquidity, calculated by adding cash, cash equivalents, and accounts and notes receivable, and dividing the result by total current liabilities. It is a more stringent test of liquidity than current ratio. Syn. quick ratio Related Item(s) cash assets ratio, current ratio.
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ACT
Automated Confirmation Transaction (Service).
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Act of 1933
-Securities Act of 1933
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Act of 1934
-Securities Exchange Act of 1934.
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Adjacent Acreage
Producing or nonproducing oil or gas leases located within the area of an existing well site. Adjacent acreage may prove valuable for continued development of the original oil or gas product.
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Adjusted Basis
The value attributed to an asset or securities that reflects any deduction taken on, or capital improvements to, the asset or security. Adjusted basis is used to compute the gain or loss on the sale or other disposition of the asset or security.
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Adjusted Gross Income (AGI)
Earned income plus net passive income, portfolio income, and capital gains. Related item(s): tax liability.
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Administrator
(1) A person authorized by a court of law to liquidate an intestate decedent’s estate. (2) An official or agency that administers a state’s securities laws.
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ADR
NAME?
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Ad Volorem Tax
A tax based on the value of real or personal property. Property taxes are the major source of revenues for local governing units. Related item(s): Assessed Value
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Advance /Decline Line
A technical analysis tool representing the total of differences between advances and declines of security prices. The advantage/decline line is considered the best indicator of market movement as a whole. Related Item(s) breadth-of-market theory.
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Advance Refunding
Refinancing an existing municipal bond issue before its maturity or call date by using money from the sale of a new bond issue. The proceeds of the new bond issue are used to purchase government securities, and the municipality puts the principal and interest received from these securities into an escrow account; it then uses these funds to pay off the original bond issue at the first call date. Syn. Prerefunding. Related Item(s) Defeasance; refunding.
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Advertisement
Any promotional material designed for use by newspapers, magazines, billboards, radio, television, telephone, recording, or other public media where the firm has little control over the type of individuals exposed to the material. Related item(s) sales literature.
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Advisory Board
Under the Investment Company Act of 1940, a board that advises an investment company on matters, concerning its investments in securities, but does not have the power to make investment deceisions or take action itself. An advisory board must be composed of persons who have no other connection with, and serve no other function for, the investment company
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AE
See. Registered Representative
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Affiliate
(1) A person who directly or indirectly owns, controls of holds with power to vote 10% or more of the outstanding voting securities of a company.(2)With respect to a direct participation program, any person who controls, is controlled by, or is conrolled by, or is under common control with the program’s sponsor and includes any person who beneficially owns 50% or more of the equity interest in the sponsor. (3) Under the investment Company Act of 1940, a person who has any type of control over an investment company’s operations, which includes anyone with 5% or more of the outstanding voting securities of the investment company or any corporation of which the investment company holds 5% or more of outstanding securities. Related item(s) control person, insider
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Agency Basis
A transaction in which the broker/dealer acts for the accounts of others by buying and selling securities on behalf of customers. Syn. Agency Basis Related Item(s) Agent, Broker, Principal Transaction.
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Agency Issue
A debt security issued by an authorized agency of the federal government. Such an issue is backed by the issuing agency itself, not by the full faith and credit of the US Government (except GNMA and Federal Import Export Bank Issues). Related Item government security
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Agency Tranaction
A transaction in which the broker/dealer acts for the accounts of others by buying and selling securities on behalf of customers. Syn. Agency Basis Related Item(s) Agent, Broker, Principal Transaction.
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Agent
(1) An individual of a firm that effects securities transactions for the accounts of others. (2) A person licensed by a state as a life insurance agent. (3) A securities salesperson who represents a broker/dealer or an 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. Related Item(s) broker; broker/dealer, dealer, principal.
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Aggresive Investment Strategy
A method of portfolio allocation and management aimed at achieving maximum return. Aggresive investors place a high percentage of their investable assets in equity securities and a far lower percentage in safer debt securities and cash equivalents, and they pursue aggresive policies, including margin trading, arbitrage, and option trading. Related item(s): balanced investment strategy; defensive investment strategy
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AGI
Earned income plus net passive income, portfolio income, and capital gains. Related item(s): tax liability.
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Agreement Among Underwriters
The Agreement that sets forth the terms under which each member of an underwriting syndicate will participant in a new issue offering and states the duties and responsibilities of the underwriting manager.
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Agreement of Limited Partnership
The contract that establishes guidelines for the operation of a direct participation program, including the roles of the general and limited partners.
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AIR
Assumed Interest Rate
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Allied Member
A general partner of an NYSE member firm who is not an NYSE member, an owner of 5% or more of the outstanding voting of an NYSE member corporation, or a principal executive director or officer of a member corporation. Allied members do not own seats on the NYSE.
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All or None Order (AON)
An order that instructs the firm to execute the entire order. Firm does not have to execute immediately.
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All or None Underwriting (AON)
A form of best efforts underwriting in which the underwriter agrees that if it is unable to sell all the shares (or a prescribed minimum), the issuer will cancel the offering. This type of agreement may be used when the issuer requires a minimum amount of capital to be raised; if the minimum is not reached, the securities sold and the money raised are returned. Commissions are not paid unless the offering is completed. Related item(s): underwriting
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Alternative Minimum Tax (AMT)
An alternative tax computation that adds certain tax preference items back into adjusted gross income. If the AMT is higher than the regular tax liability for the year, the regular tax and the amount by which the AMT exceeds the regular tax are paid. Related Item(s) tax preference item.
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Alternative Order
An order to execute either of two transactions -for example, placing a sell limit (above the market) and a sell stop (below the market) on the same stock. Syn.either/or order, one cancels other order.
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AMBAC Indemnity Corporation (AMBAC)
A corporation that offers insurance on the timely payment of interest and principal obligations of municipal securities. Bonds insured by AMBAC usually receive a AAA rating from rating services.
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American Depositary Receipt (ADR)
A negotiable certificate representing a given number of shares of stock in a foreign corporation. It is bought and sold in the American Securities Markets, just as stock is traded. Syn. American Depositary Share.
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Amortization
(1) The paying off of debt in regular installments over a period of time. (2) The Ratable deduction of certain capitalized expenditures over a specified period of time.
