Terms 91-114 Flashcards
Interest Rate Options
Based on changes in interest rates for government issues such as T-bills
Long term Interest Options
Based on longer term government issues such as T notes
Fiduciary Account
Investment account managed by another for a person who is unable to do so.
Regulation T
FRB requirement amount that an investor can risk when buying stock on margin; currently 50%
Debit Balance
Amount customer owes in a margin account
Equity
Amount customers owns in a margin account after paying off her borrowed amount
Broker Loan Rate
Rate that a broker can borrow from a bank to extend to a customer in a margin account.
Minimum Maintenance
Cash and/or other securities deposited in a brokerage account to fulfill the margin requirements of the brokerage and NASD.
Restricted account
Margin account that has fallen below the 50% requirement
SMA
Special Memorandum Account or Special Miscellaneous Account; amount in a margin account above the original 50% Regulation T Rate
Long Margin Account
Securities that are purchased on credit in a margin account
Short Margin
Selling securities not owned, anticipating a future decline in market value
Stock Loan
Lending securities between brokers
Unit Investment Trust
Fixed portfolio of income producing securities
Nonqualified plan
Grows tax-deferred but cannot be deducted from the investor’s income
Qualified Loan
Allows an investor to invest pretax dollars in a IRA, Keogh, 401K, or 403B
Open Ended Fund
Mutual Fund that continually issues and redeems shares in the marketplace
Close Ended Fund
Mutual Fund that offers a one-time offering of shares in the market
Public Offering Price
Current offering price of a mutual fund (POP=net asset value + sales fee)
Net Asset Value
Value of mutual fund shares divided by the number of outstanding shares in the market
Load Fund
Mutual fund that charges a sales fee to investors when buying or selling
No-Load Fund
Mutual fund with no charges or sales fee on fund transactions
Diversified funds
Mutual funds with at least 75% of assets invested in securities and no more than 5% of total assets invested in any one security
Breakpoints
Discounted sales fee when an investor purchases a certain number of shares
