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1
Q

ETN (Exchange Traded Notes)

A

-adversely impacted if issuers credit rating is downgraded
-debt Secuity
-issued by banks or financial institutions and typically track an index or benchmark
-can go long or short
-does NOT pay dividends or interest
-debt instrument

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2
Q

Treasury Notes

A
  • interest is paid semiannually
    -quoted by whole and fractional bond points
    -1/32
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3
Q

Treasury Stock

A
  • issued stock subsequently reacquired by a corporation
    -par value
    -it is authorized, issued, and owned but NOT outstanding
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4
Q

Credit risk=Default Risk
Market Risk is the highest for variable life
Market risk=liquidity risk
marketability ricst=liquidity risk
currency risk=non-systematic risk
Purchasing Power risk= inflation risk

A

risk

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5
Q

Securities Act of 1933

A

-All gov. agency issues are exempt
-Registration is required for ADRs
-registration is not required for securities by gov. muni bons, Eurodollar
-Registration is required for new issues
-registration Is listed it of non-expect new issues
-prohibit fraud and deceit in the marketing of securities
-financial statements certified by independent accountants
-registration not required for small business investment companies

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6
Q

Ginnie Mae (GNMA)

A

-interest payments on pass through are made monthly
- mortgage
-conservative investments that may be suitable for senior investor
-payment due T+1
-pass through certificate has no credit risk as it is backed by us gov

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7
Q

Hypothecation

A

-pledging of securities as collateral
-margin account
-make loans to banks

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8
Q

Treasury Bonds

A

-exposed to inflationary risk
-issued by US. gov. in book entry

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9
Q

Debenture

A

-unsecured bond
-promised by issuers promise to pay
-seeking income

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10
Q

DDP (Direct Participation Programs)

A

-provide exposure to non-correlated assets
-offers professional management
-high risk, high reward
-illiquid
-passive income

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11
Q

12b-1 Fee

A

-Sales and Advertising
-includes cost of marketing and distributing a mutual fund is collected
-expenses of selling, marketing, distributing fund
-salaries of fund salespeople
-Highest can be 1%
-No-load fund cannot be greater than .25%
-if fund has 12b-1 fee the max sales charge is 7.25%

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12
Q

Preferred Stock

A

-Cumulated, participating, convertible, callable, straight
-can be converted to common stock not bonds

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13
Q

HSA (Health Savings Account)

A

-funded w/ tax-deductible contribution
-established by corporate employees as part of their health insurance plans
-sponsored by employer so qualified
-plans w/ high deductibles
-$4,150 for 1, $8,300 for family
-tax deferred
-withdrawals for medical is tax-free

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14
Q

ODD (Options Disclosure Document)

A

-customer must be sent options agreement for signature and returned within 15 days of first options transaction
bust be sent at or prior to account opening

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15
Q

(REIT) Real Estate Investment Trusts

A

-non-exempt under Securities act 1933
-traded on stock exchange or OTC

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16
Q

GNP (Gross National Product)

A
  • includes American companies doing business in other countries
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17
Q

GDP (Gross Domestic Product)

A
  • business conducted between American boarders
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18
Q

Qualified Institutional Buyers (QIB)

A
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19
Q

UTMA (Uniform Transfers to Minors Act)

A

-opened under Tax ID of the minor
-owned by minor

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20
Q

FDIC (Federal Deposit Insurance Corporation)

A
  • savings account at a bank is guaranteed by FDIC
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21
Q

Regulation D

A

-504, 506(b), 506(c)
-regulation dont need to be registered under 1933 if these rules are followed
-Private Offering
-no limit for accredited investors
-no more than 35 non accredited investors
-refers to private placements
-how restricted shares are normally acquired

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22
Q

Regulation T

A

-a 90-day restriction occurs when a customer opens and closes the same stock in a cash account without paying in full
-applies to corporate bonds OTC, common stock, and preferred stock OTC but NOT municipal bonds OTC
-max time peripd to collect monies owned by customer prior to extension request is 3 buisness days
-rules cover both cash accounts and margin accounts
-payment for trade must be made 3 business days after trade
-set by Fed
-broker to customer
-does NOT apply to us gov bonds
-exntension for payment is S+2
payments must be made in 3 days
apples to listed and unlisted securities
applies to non expempt securities

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23
Q

Regulation A-offering circular

A
  • up to $75 Million
    -can still be public offering
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24
Q

529

A

-potential deductibility of contributions from state taxes
-changes state to state
-must inform contribution must be deductible at state level
-tax-free Distrubutions
-amount contributed won’t be deductible from federal income tax but possibly state income tax
-donor and beneficiary can be the same person
-donor maintains control over assets

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25
Rule 147
-interstate offering -offers cannot be sold out of state for +6 months after initial sale date -subject to blue sky laws
26
DTC (Depository Trust Company)
27
SIPC (Securities Investor Protection Corp)
-must be made available at account opening only and annually after -must be provided with phone number and website address prior to accounts open -insures customer accounts against B/D fail -backed financially by B/D that are members -protects against bankruptcy
28
MSRB (Municipal Securities Rulemaking Board)
-
29
FinCEN
-mission is to safeguard financial system from abuses of financial crime, terrorist financing, and money laundering -enforces Bank Secrecy Act
30
Rule 144a
-issuers of restricted stock must sell to QIBs -allows QIBs to buy and trade between each other in large blocks of privatly placed issues
31
Regulation S-P
- a firm must include the policies to protect security of nonpublic info in its customers privacy and opt-out notices -covers notification to customers of a member firms privacy policies and practices
32
Rule 145
-merger w/ another publicly held company requires registration statement filing w/ SEC -exempts corp. action
33
Form Registration
What Requires -stock split -reverse stock split -stock dividend -mergers where shareholders are part
34
Regulation S
-
35
Rule 144
-unregistered Restricted Securities (6 months)
36
TIPS (Treasury Inflation Protection Securitues)
-principal amount if adjusted upwards with the rate of inflation -interest rate *is fixed -no purchasing power risk -deflation does NOT make maturity price drop below par
37
STRIPS (Separate Trading of Registered Interest and Principal of Securities)
-discount to par -0 coupon bond -separates interest and principal components -pay interest at maturity -insuated investor of reinvestment risk
38
504
39
506(b)
40
506(c)
41
Trust Indenture Act of 1939
42
Form 1099-DIV
-cash dividends
43
Ad Valorem
-real estate taxes backed by debt Secuities issuers by town, cities, or counties (never states) local municipalities
44
Municipalities
45
Basis Points
100 Basis Points= 1% 1%=.01 10%=.1 100%=1
46
403(b) Plan
-schools and non-profit -not corps.
47
457(b)
48
412
49
T-Bills
-10U -Conservative Short Term -B/D would get them from a primary dealer -max maturity of 1 year -sold at discount to par -can be purchased directly at weekly option -most actively traded money market instrument -zero coupon security -quoted in terms of a discount yield or basis quote
50
C-Ds
51
Corp. Resolution
-needed when corp. opens account with B/D
52
Open-End
- the NAV is the min price at which a share can be purchased
53
Close-End
-can sell at a discount or premium to its NAV depending on investor perception of the fund -they are negotiable because the are traded in secondary market and their ownership can be transfered across individuals
54
Warrants
55
Rights
56
Oh
Dow-30 NYSE-250 Index-1700 Wilshire-3500
57
ADR (American Depositary Receipts)
-common shares -securities you buy in American with US dollars that represents stock in foreign countries -if US goes down it is good -non-exempt -subject to currency/exchange risk -when us dollar goes up, price of receipt will fall -money market fund wont invest in this -equity security that is the vehicle for foreign stocks to trade
58
UIT (Unit Investment Trust)
-not actively management -passively managed -lower fees
59
ERISA
-rules regarding retirement plans stress that investments should be safe --safety of principle
60
CRD (Central Registration Depositary)
61
Buyer
Holder, Owner, Long
62
Seller
Short, Writer
63
Monetary Theory
-control money supply -FED
64
Supply-Side
-Individual/tax rate reductions
65
Keynesian Theory
Fiscal Policy-the use of government spending and tax policies to influence economic conditions
66
Commercial Paper
-Short term -matures in 270 days -exempt security under 1933 -smooths out cash flow used by corps
67
LGIP (Local Gov. Investment Pool)
-municipal entity -trust established by local gov. that allow Municiple entities to invest their money in a variety of securities -managed by gov. employees or investment management firms -purchase interest in trust, and assets are investment to trust stated objectives to benefit from economies of scale, diversification, professional portfolio management, and liquidity -regulated by MSRB
68
Custodian
Type of cash account
69
Unlimited Loss for call not put
What loss does Short/Short have?
70
AML (Anti Money Laundering)
records held for 5 years
71
Form CRS
72
USA (Uniform Securities Act)
- legal framework for registration of securities at stae level
73
6 years
How Many Years? -customer account statements -new account forms
74
3 years
How Many Years? -ads -correspondence -customer orders -registration statement w SEC that uses a method only available for seasoned issuers -U4 must be kept after termination -U5 record kept for
75
4 years
How Many Years? -written customer complaints -approval in advance of use by principal
76
5 years
How Many Years? -Anti- money laundering records customer identification records -distributions are subject to penalty taxed in a Roth Ira if taken out within... -RR outside of industry out for 5 years then have to retake exam
77
Lifetime Records of firm
How Many Years? -articles of incorporation -partnership articles -minutes of partners or directors' meetings -stock certificate books -Form BD
78
Clearing Agent
-middle man
79
Regulation M
80
RMD (Required Min. Distribution)
-amount of money needed to be taken out in ira after 73
81
Coverdell Account
-$2k max a year -Cant contribute if rich
82
Treasury/ US Gov
actual/actual
83
Corp/Muni
30/360
84
Systematic
all investors market risk
85
Unsystematic
credit/politcial/liquid risk not all investors
86
MFP (Municipal Finance Professional)
any person who is primarily engaged in or supervises the activities of underwriting, trading, or selling municipal securities
87
Solicited
-valid trade -non-exempt ruling -RR believes its fair -initiated by RR
88
Unsolicited
-not recommended by B/D -must go through if customer says and is sure-client specifically specifies the bonds/stocks he wants purchased
89
CRD (Centeral Registration Depository)
90
ABLE Account
-beneficiary is always accounts owner --individual disability must begin before 26 -tax deferred -can have up to $100k -can still qualify for federal supplemental security income benefits -regulated by MSRB
91
Street name
-stock shares having a nominal owner and a beneficial owner
92
Bond Identure
contract between bond issuer and a trustee for the benefit of the bondholders
93
Shelf Offering
-issuer files one registration statement for a large number of securities and does not sell than immediately
94
Follow-on
-when a company decides to sell additional shares to public after IPO
95
96
Current Yield
Annual Coupon Rate/Current Market Price of Bond
97
Real Interest Rate
Nominal Yield-Inflation Rate
98
Interbank market
where foreign Exchange rates are set
99
Variable Annuity Contract
-non-exempt for 1933 -basically, buying a mutual fund in an insurance company wrapper -number of annuity units is fixed -does NOT need to delect period certain payout option
100
Fixed Annuity
-not a secuity and does not need to register w 1933 -grows at a guaranteed rate
101
OFAC
-office of foreign assets control -maintains a list of known and suspected terrorists called Specially Designated Nationals lists
102
Certificate of Deposit (CDs)
-a "step down" cd means the interest payment may be reduced
103
Securities Exchange Act of 1934
-Stabilization of new issues -registration of exchanges -registration of broker/dealers -front running
104
Form CRS (Customer Relationship Summary)
-must be provided at or prior to the making of a recommendation or account opening only for retail clients -if firm is acting as broker-dealer -fees and cost customer will pay -conflicts on interest
105
BAN-bond anticipation Note RAN-revenue anticipation note Tan-Tax anticipation Note TRAN- tax revenue anticipation note
106
Series Bond Offering
-bond issue where the bonds have the same maturity but different dates of issuance
107
Form D
-must be filed with SEC to claim private placement within 15 days of the offering to claim the exemption
108
Regulation U
-credit from bank to broker

SIE (3 decks)

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