Terms 91-114

Question 1

Interest Rate Options

Answer 1

Based on changes in interest rates for government issues such as T-bills

Question 2

Long term Interest Options

Answer 2

Based on longer term government issues such as T notes

Question 3

Fiduciary Account

Answer 3

Investment account managed by another for a person who is unable to do so.

Question 4

Regulation T

Answer 4

FRB requirement amount that an investor can risk when buying stock on margin; currently 50%

Question 5

Debit Balance

Answer 5

Amount customer owes in a margin account

Question 6

Equity

Answer 6

Amount customers owns in a margin account after paying off her borrowed amount

Question 7

Broker Loan Rate

Answer 7

Rate that a broker can borrow from a bank to extend to a customer in a margin account.

Question 8

Minimum Maintenance

Answer 8

Cash and/or other securities deposited in a brokerage account to fulfill the margin requirements of the brokerage and NASD.

Question 9

Restricted account

Answer 9

Margin account that has fallen below the 50% requirement

Question 10

SMA

Answer 10

Special Memorandum Account or Special Miscellaneous Account; amount in a margin account above the original 50% Regulation T Rate

Question 11

Long Margin Account

Answer 11

Securities that are purchased on credit in a margin account

Question 12

Short Margin

Answer 12

Selling securities not owned, anticipating a future decline in market value

Question 13

Stock Loan

Answer 13

Lending securities between brokers

Question 14

Unit Investment Trust

Answer 14

Fixed portfolio of income producing securities

Question 15

Nonqualified plan

Answer 15

Grows tax-deferred but cannot be deducted from the investor’s income

Question 16

Qualified Loan

Answer 16

Allows an investor to invest pretax dollars in a IRA, Keogh, 401K, or 403B

Question 17

Open Ended Fund

Answer 17

Mutual Fund that continually issues and redeems shares in the marketplace

Question 18

Close Ended Fund

Answer 18

Mutual Fund that offers a one-time offering of shares in the market

Question 19

Public Offering Price

Answer 19

Current offering price of a mutual fund (POP=net asset value + sales fee)

Question 20

Net Asset Value

Answer 20

Value of mutual fund shares divided by the number of outstanding shares in the market

Question 21

Load Fund

Answer 21

Mutual fund that charges a sales fee to investors when buying or selling

Question 22

No-Load Fund

Answer 22

Mutual fund with no charges or sales fee on fund transactions

Question 23

Diversified funds

Answer 23

Mutual funds with at least 75% of assets invested in securities and no more than 5% of total assets invested in any one security

Question 24

Breakpoints

Answer 24

Discounted sales fee when an investor purchases a certain number of shares