Unit 10, 11, 12

Question 1

RELP

Answer 1

Real estate limited partnership

Question 2

Tax basis

Answer 2

The upper limit on deductibility of losses. Consists of:
Investment in partnership (cash contributions and non-cash property contributions)
Recourse debt
Non-recourse debt for GPs in real estate partnerships only, p296
Less cash/distributions

Question 3

Economic viability/soundness

Answer 3

A potential for returns from cash distributions and capital gains.
Measured by:
Cash flow analysis (net income or loss plus non-cash changes, such as depreciation)
Internal rate of return, IRR (takes into consideration the time value of money and is a favorite method of evaluation)

Question 4

DPP rollup

Answer 4

A transaction involving the combination or reorganization of one or more limited partnerships into the securities of a successor corporation

Question 5

KYC

Answer 5

Know your customer rule

Question 6

AP

Answer 6

Associated person
of a member from

Question 7

UPIA

Answer 7

Uniform prudent investor act
Fiduciaries are obligated to follow the UPIA

Question 8

UGMA

Answer 8

Uniform gift to minors account
No documentation is required for an individual to open a UGMA

Question 9

UTMA

Answer 9

Uniform transfers to minors account
No documentation is required for an individual to open a UTMA
Must be a cash account

Question 10

IG

Answer 10

Investment grade credit
vs. Private credit

Question 11

SPAC

Answer 11

Special purpose acquisition companies
Blank check hedge fund company

Question 12

Blind-pool company

Answer 12

Raise Capital by selling securities to the public without telling investors what a specific use of the proceeds will be

Question 13

ABS

Answer 13

Asset-backed securities

Question 14

Amortizing loan

Answer 14

One in which regular payments are made against the principal
At the end of the term the principal has been repaid

Question 15

PSA

Answer 15

Public securities association
Provides historical data of projections of mortgage prepayments for CMOs

Question 16

Amortizing

Answer 16

An amortizing loan is one in which regular payments are made against the principal

Question 17

Classes of CMOS

Answer 17

Principal only, POs
Interest only, IOs
Planned amortization class, PACs, targeted maturity dates, protection from prepayment and extension risk
Targeted amortization class, TACs, protection from prepayment risk only
Zero tranche, Z-Tranche, most volatile, paid after all preceding tranches are retired

Question 18

Master limited partnership

Answer 18

This is the style of limited partnership that can trade on an exchange. Because they are exchange traded, they are more suitable for a wider range of investors compared to other limited partnerships.

Question 19

Reg BI

Answer 19

Reasonable diligence
Reasonable care
Reasonable skill