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Series 7 > Stocks > Flashcards

Stocks Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Ex Dividend

A

Regular way - 1 business day before record date.

Need to buy shares T+2 from record date

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2
Q

Rights Agent

A

Hired to handle mechanics of a rights offering

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3
Q

Convertible preferred shareholders

A

Benefit when market price of common stock rises above conversion price.

They would then have an opportunity to buy under market value

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4
Q

Performance preferred

A

Issued by growth company.

Also called participating preferred

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5
Q

Participating preferred

A

Receives fixed dividend

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6
Q

Cumulative preferred stock

A

If company misses its dividends, holder accumulates all dividends and get payment before any common shareholders

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7
Q

Right

A

Allows common stockholder to maintain their same percentage of ownership of company that is issuing new stock.

Right lets existing shareholder subscribe to the new shares before they’re offered to the public.

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8
Q

Exercise price of warrant

A

Set at a premium to market price of common stock

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9
Q

Treasury stock

A

Issued shares minus outstanding shares

Issued stock that’s been repurchased

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10
Q

Wrap Accounts

A

All customer services wrapped into one

Annual fee based on total assets

Advisory product, so person selling must be registered as both sales representatives and investment advisors in most states

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11
Q

Coincident economic indicator

A

Indicates economy’s current position in business cycle

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12
Q

Leading indicator

A

Measures consumer confidence levels and likely future consumer spending levels

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13
Q

Lagging economic indicator

A

Shows where economy was in the business cycle during the past 12 months

Corporate profit levels, ratio of consumer credit to incomr

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14
Q

Flow of funds

A

Found in trust indenture

Order in which revenue bond is to be collected and disbursed

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15
Q

Open interest

A

Opening purchases/sales increase open interest; closing purchases/sales decrease

Greater open interest, greater the likely trading volume in the issue

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16
Q

Good faith checks

A

Specified in official notice of sale

Submitted with bid to municipality

Amount determined by the issuer

Typically 1% or 2% of par value of the bonds

17
Q

Variable annuities

A

Tax deferred; unattractive to low tax bracket

Professionally managed

Have investment risk

17
Q

Variable annuities

A

Tax deferred; unattractive to low tax bracket

Professionally managed

Have investment risk

18
Q

Fixed annuities

A

No prospectus or registration

19
Q

Debt service coverage ratio

A

Net revenues / debt service

20
Q

Not held order

A

Investor gives floor broker discretion on time and price at which order should be executed

Cannot be completed by Specialists

21
Q

Pure interest rate

A

Free of investment risk

T Bills

22
Q

Accrued interest

A

Not included in cost basis

23
Q

Cost basis

A

Price paid for bond plus any mark-up or commission

24
Q

Quick ratio

A

Acid test

Current assets - inventories and prepaid expenses

Most stringent liquidity measure

25
Q

VIX option

A

Measure of market volatility

Higher index value, higher volatility

Volatile price movements (high VIX) are bearish

26
Q

Trust Indenture Act of 1939

A

Only applies to Corporate Bonds of more than $50,000,000

Protect bond holders from harmful actions of issuer

27
Q

Variable rate demand note

A

Provides investors with stated maturity date, floating interest rate, and option to put back to financial intermediary on daily/weekly basis

28
Q

Currency Transaction Report

A

Filed when a firm receives more than $10k in cash in a day

29
Q

Bank Secrecy Act

A

Safeguard financial system from abuses of financial crime, including terrorist financing and money laundering

30
Q

Warrant

A

Attached to new bond or preferred stock issue

Right to buy stated amount of common stock at specified price

31
Q

Letter of Intent

A

Valid for maximum of 13 months

32
Q

Recession

A

Decline in GDP for 2 quarters

33
Q

No-load fund

A

Not permitted to charge a 12b-1 fee greater than 25 basis points

34
Q

Redemption value of open-ended investment company

A

Based on NAV computed after the order is received

35
Q

Preemptive Right

A

Right to maintain proportionate ownership if issuer offers new shares

36
Q

ADR

A

American Depository Receipts

Redeemable shares of stock of foreign company

37
Q

Value Investing

A

Selection of quality investments based on finding securities that are fundamentally undervalued in the market

38
Q

Interval Fund

A

Continuously offers shares to investors. They don’t trade on an exchange, and can be sold monthly, quarterly, or semiannually. They are illiquid investments. They have very high fees

Series 7 (6 decks)

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