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SIE Exam > Unit 5: Other Investment Vehicles > Flashcards

Unit 5: Other Investment Vehicles Flashcards

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SIE Exam flashcards
1
Q

Options contracts are a type of _____ investment

A

derivative

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2
Q

A ____ is a contract that derives its value from an underlying asset. There are two parties to the contract: a buyer and a seller. The buyer has the right to take an action: to buy the underlying asset from or sell the asset to the seller.

A

derivative

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3
Q

Options contracts offer investors a means to _____ an investment’s value or speculate on the price movement of individual securities, markets, foreign currencies, and other instruments.

A

hedge, or protect,

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4
Q

An option is a _____ contract.

A

two-party

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5
Q

The amount paid for the contract when purchased, or received for the contract when it is sold, is called the _____.

A

contract premium

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6
Q

The buyer, who pays the premium for the contract, is often called the owner, the holder, or
the party who is _____ the contract.

A

long

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7
Q

The _____has the right to exercise the contract. _____ risk losing the premium paid for the contract if the option expires as worthless.

A

buyer, Buyers

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8
Q

Opening purchase&raquo_space;» closing sale

A

Buyer

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9
Q

Opening sale ›»> closing purchase

A

Seller

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10
Q

The seller (writer of the contract) who receives the premium for the contract is called the writer or party who is _____ the contract.

A

short

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11
Q

____ can potentially profit by the amount of premium received for the contract if the option expires as worthless.

A

Seller

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12
Q

Buyer:

A

Purchaser or holder
Long
Pays premium Owns the right Is in control

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13
Q

Seller:

A

Writer
Short
Receives premium
Takes on obligation

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14
Q

There are two types of option contracts:

A

calls and puts.

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15
Q

there are four basic transactions available to an option investor:

A

Buy calls
Sell calls
Buy puts
Sell puts

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16
Q

An investor may ____ calls (go long) or ____ calls (go short).

A

buy or sell

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17
Q

_______ is when a call buyer owns the right to buy 100 shares of a specific stock at the strike price before the expiration if she chooses to exercise the contract. Therefore, a call buyer is a bullish investor (one who anticipates that the price of the underlying security will rise).

A

Long call (purchase)

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18
Q

___ is when a call writer (seller) has the obligation to sell 100 shares of a specific stock at the strike price fi the buyer exercises the contract. Therefore, a call writer is a bearish investor (one who anticipates that the price of the underlying security will fall).

A

Short call (sale).

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19
Q

An investor may ___ puts (go long) or ____ puts (go short).

A

buy or sell

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20
Q

____ is when A put buyer owns the right to sell 100 shares of a specific stock at the strike price before the expiration if she chooses to exercise the contract. Therefore, a put buyer is a bearish investor because she expects the price of the underlying security to fall.

A

Longput (purchase).

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21
Q

a put buyer is a _____ investor because she expects the price of the underlying security to fall while a a call buyer is a ____ investor (one who anticipates that the price of the underlying security will rise).

A

bearish
bullish

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22
Q

_____ is when a put writer (seller) has the obligation to buy 100 shares of a specific stock at the strike price if the buyer exercises the contract.

A

Short put (sale).

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23
Q

a put seller is a _____ investor because he wants the price of the underlying security to rise or remain unchanged while a a call writer is a ____ investor (one who anticipates that the price of the underlying security will fall)

A

bullish
bearish

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23
Q

A call _____ is a bullish investor because he wants the market to rise. The call is exercised only if the market price rises above the strike price.

A

call buyer

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24
Q

A call ____ is a bearish investor because he wants the market to fall (or remain unchanged). The contract is not exercised if the market price is below the strike price.

A

writer / seller

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25
Q

A put _____is a bearish investor because he wants the market to fall. The put is exercised only if the market price falls below the strike price.

A

buyer

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26
Q

A put ____ is a bullish investor because he wants the market to rise or remain unchanged. The contract is not exercised if the market price is above the strike price.

A

writer/seller

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27
Q

A call is _____ when the price of the stock exceeds the strike price of the call. A buyer will exercise calls that are in the money at expiration. Buyers want options to be in the money; sellers do not.

A

in the money

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28
Q

A call is ____ when the price of the stock equals the strike price of the call. A buyer will not exercise contracts that are at the money at expiration. Sellers
want at-the-money contracts at expiration; buyers do not. Sellers then keep the premium without obligations to perform.

A

at the money

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29
Q

A call is _____ when the price of the stock is lower than
the strike price of the call. A buver will not exercise calls that are out of the money at expiration. Sellers want contracts to be out of the money; buyersdo not. Sellers then keep the premium without obligations to perform.

A

out of the money

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30
Q

A call has intrinsic value when the market price of the stock is _____ the strike price of the call.

A

above

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31
Q

During the lifetime of an options contract, buyers want the contract to move ______; sellers want the contract to_____.

A

in the money
move out of the money.

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32
Q

A call or put option is at _____ when the premium equals the intrinsic value

A

parity

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33
Q

A put is ______ when the price of the stock is lower than the strike price of the put. A buyer will exercise puts that are in the money at expiration. Buyers want in-the-money contracts; sellers do not.

A

in the money

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34
Q

A put is _____ when the price of the stock is higher than the strike price of the put. A buyer will not exercise puts that are out of the money at expiration. Sellers want out-of-the-money contracts; buyers do not.

A

out of the money

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35
Q

. A put has intrinsic value when the market price of the stock is _____ the strike price ofthe put.

A

below

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36
Q

The basic formula for a premium is:

A

intrinsic value plus time value equals premium

(IV + TV = Pr).

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37
Q

There are two factors that affect time value: the amount of time to ______ and ______.

A

expiration and volatility

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38
Q

Breakeven=

A

Strike Price + the Premium

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39
Q

the potential market gains available to call buyers are _____ because there is no limit on how far a stock’s price can rise. In theory, it can rise to infinity; thus, the potential gain is unlimited.

A

unlimited

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40
Q

The most the call buyer can lose in market loss is the ____ paid. This will happen if the stock price is at or below the strike price of the option at expiration

A

premium

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41
Q

for calls, the BE is found by adding the strike price to the premium, but for the call _____, the contract is profitable below the BE.

A

seller

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42
Q

Breakeven Put Buyer:
Market gains Put Buyer:
Market losses Put Buyer:

A

BE Put Buyer: Strikeprice- premium
MG Put Buyer: Strike price- premium
ML Put Buyer: Premium

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43
Q

Break even Put Seller:
Market gains Put Seller:
Market losses Put Seller:

A

BE Put Seller: Strike price- premium
MG Put Seller: Premium
ML Put Seller: Strike price- premium

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44
Q

Breakeven Call Buyer:
Market gains Call Buyer:
Market losses Call Buyer:

A

BE Call Buyer: Strikeprice- premium
MG Call Buyer: Unlimited
ML Call Buyer: Premium

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45
Q

Break even Call Seller:
Market gains Call Seller:
Market losses Call Seller:

A

BE Call Seller: Strike price- premium
MG Call Seller: Premium
ML Call Seller: Unlimted

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46
Q

_______ function nearly the same as equity options. However, because the underlying instruments are not shares of stock, nonequity options have different contract sizes and delivery and exercise standards.

A

Nonequity (currency and index options)

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47
Q

Options on ______ allow investors to profit from the movements of markets or market segments and hedge against these market swings. They may be based on broad-based, narrow-based, or other indexes with a particular focus.

A

indexes

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48
Q

____ indexes reflect movement of the entire market and include the S&P 100 (OEX), S&P 500 (SPX), and the AMEX MajorMarket Index (XMI).

A

Broad-based

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49
Q

______ indexes track the movement of market segments in aspecific industry, such as technology or pharmaceuticals.

A

Narrow-based

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50
Q

When ______ options are exercised, their settlement price is based on the closing value of the index on the day of exercise, not the value at the time of exercise.

A

index

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51
Q

The exercise of an ____ option settles the next business day, whereas the exercise of an _____ option settles in two business days. With regard to trading
(i.e., buying or selling the contract), settlement is the next business day for both.

A

index
equity

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52
Q

Hedging a portfolio is an important use of index options. If a portfolio manager holds a diverse portfolio of equity, he can buy a put on the index to offset loss if the market value of the stocks falls. This use of index puts is known as _____

A

portfolio insurance.

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53
Q

Interest rate options are _____ based (i.e., they have a direct relationship to movements
in interest rates).

A

yield

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54
Q

All yield-based options are ____ style exercise. That is, they may be exercised only on expiration day.

A

European

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55
Q

If you are an exporter, you are concerned with the value of the foreign currency dropping, so buy ____.
If you are an importer, you are concerned with the value of the foreign currency rising, so buy ____.

A

puts
calls

EPIC!!!

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56
Q

An ______ option allows the owner of a contract to exercise any time before expiration.

A

American-style

Nearly al equity and equity index options are American style.

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57
Q

_____ options can be exercised only on expiration day.

A

European-style. Foreign currency and yield-based options are normally European style.

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57
Q

The option (insurance policy) _____ in value if the core stock moves in the wrong direction.

A

increases

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58
Q

Protective Puts: In order for the customer to break even on the position, the value of the stock the customer owns must rise above what he paid for the stock by enough to cover the cost of the option position.
The formula is as follows:

A

BE= stock price +premium

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59
Q

In order for the customer to break even on the position, the value of the stock the customer shorted must fall below what she paid for the stock by enough to cover thecost of the option position.
The formula is as follows:

A

BE = stock price - premium

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60
Q

______ may be used to protect against moves in a single stock, and ______options can provide protection against a drop in the market overall

A

options
index

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60
Q

There are two parts to protective puts and calls:

A

Core Position Hedge
Long stock -> Put option
Short stock ->Call optio

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61
Q

______ contracts entail much more risk due to the uncertain price at which
the security must be purchased if the contract is exercised. Writers of naked calls
are willing to accept that risk in return for taking in the premium when selling short (writing) the call.

A

Uncovered (naked)

62
Q

If the contract is _____, the writer already owns the underlying security. This ensures the writer’s ability to perform (deliver), should the owner exercise the contract.

A

covered

63
Q

If the contract is _____, the writer does not own the
underlying security. If the contract is exercised by the owner, the writer will need
to purchase the underlying security at the current market price to deliver it.

A

uncovered (naked)

64
Q

______ call is the most common. It is a proven and relatively conservative way to generate income against a stock position.

A

the covered

65
Q

If the contract is ______, the writer already has sufficient cash available to buy the stock. This ensures the writer’s ability to perform (purchase), should the owner exercise the contract.

A

covered

66
Q

If the contract is ______, the writer does not have the cash on hand to purchase the stock at the strike price. If the contract is exercised by the owner, the writer will need to come up with the cash from somewhere.

A

uncovered (naked)

67
Q

The primary regulators for options are:

A

the Options Clearing Corporation (OCC and the Chicago Board of Options Exchange (CBOE).

68
Q

The OCC provides an options (_____), which must be provided at
or before the time of the account approval. This document explains options strategies, risks, and rewards and is designed to provide full and fair disclosure to customers before they begin options trading.

A

disclosure document(ODD)

69
Q

Before any trading can take place, an options account must be approved by a ____ of the firm.

A

Registered Options Principal (ROP)

70
Q

Steps for Setting Up an Account to Trade Options

A

A representative must believe that options are a suitable investment for a client based on the client’s circumstances and objectives.
2. The representative provides the customer with a copyof the ODD.
3. The account is approved for options trading by a ROP.
.4 Option trades may be entered.
.5 Then, not later than 15 days after the account approval, the customer must return the
signed options agreement.

71
Q

The _____ states that the customer has read the ODD, understands the risks of options trading, and will honor al rules and regulations regarding options trading. By
signing, the customer also agrees to advise the firm ifany changes occur in his financial situation, investment objectives, and so forth that would impact whether or not the account should still be approved for options trading.

A

options agreement

72
Q

Options trading can occur in that ____ days even though a signed options agreement has not been received.

A

15

73
Q

Opening an Options Account:

A

Options Account Diagram Customer wishes to trade options.
Registered representative determines suitability of options trading.
OCC Options Disclosure Document is provided at or before account approval.
Option account is approved by ROP.
First trade may take place immediately following account approval.
Option contracts are bought or sold T +1(payments of premiums).
Signed option agreement returned within 15 days of account approval.
Closing transactions only fi option agreement si not returned or is late.

74
Q

The _____ is the clearing agent for listed options contracts–that is, those listed for trading on U.S. options exchanges. Its primary functions are to standardize, guarantee the performance of, and issue options contract

A

he Role of the Options Clearing Corporation (OCC)

75
Q

Options contracts are traded without a certificate. An investor’s proof of ownership is the _____

A

trade confirmation.

76
Q

Trading times:
Settlement. Listed options settle on the next business day after trade date (T+ 1).
Expiration. Listed options expire on the third Friday of the expiration month at 11:59 pm ET.

A

Listed options trade from 9:30 am to 4:00 pm ET.

77
Q

Listed options settle on the next business day after _____.

A

trade date (T+ 1)

78
Q

Listed options can be ______ by the owner from the time of purchase until they expire. The ______ process is guaranteed by the OCC. If aholder of an option wishes to exercise his contract, his broker-dealer (BD) notifies the OCC.

A

exercised
exercise

79
Q

Any contract that is in the money by at least $0.01 will be exercised _____ at expiration for the holder unless the holder gives “do not exercise” instructions.

A

automatically

80
Q

The owner of a _____ (party long the contract) has the right to buy the stock at the strike
price. To do so, the owner must exercise the cal. The writer of the call will then be assigned, meaning that the writer must now fulfill her obligation to sell the stock at the strike price.

A

call

81
Q

Only owners of options contracts (those who are long the contracts) have the right to ____ them. Writers of contracts (those who are short the contracts) will be assigned to fulfill their obligation to perform if the owner chooses to ____.

A

exercise
exercise

82
Q

Municipal Securities like section 529 plans, local government investment pools (IGIPs), and Achieving a Better Life Experience (ABLE) accounts are three very different types of investments that have one point in common:

A

all are sponsored by state or local governments

83
Q

All municipal securities, they come under the jurisdiction of the _____ .

A

Municipal Securities Rulemaking Board (MSRB

84
Q

A _________ plan is a specific type of education savings account available to investors. The plans allow saved money to be used for qualified expenses for K-12 and post-secondary (college) education. Qualified expenses include tuition at an elementary or secondary public, private, or religious school for up to $10,000 per year.

A

Section 529

85
Q

There are two basic types of 529 plans:

A

prepaid tuition plans for state residents and savings plans for residents and nonresidents.

86
Q

Key Points of 529 Plans

A

Overall maximum contribution levels can vary from state to state and may be substantial.
Assets in the account remain under the donor’s control, even after the student becomes of legal age.
There are no income limitations on making contributions to a 529 plan.
Plans allow for monthly contributions if desired by the account owner.
Account balances left unused may be transferred to a related beneficiarv.
Rollovers are permitted from one state’s plan to another state’s plan, but no more than once every 12 months.

87
Q

______ provide other government entities-such as cities, counties, school districts, or other state agencies–with a short-term investment vehicle to invest funds. The _____ are generally formed as a trust in which municipalities can purchase shares or units in the _____ investment portfolio.

A

Local Government Investment Pools (LGIPs)

88
Q

______ accounts are tax-advantaged savings accounts for individuals with disabilities and their families. The beneficiary of the account is the account owner, and income earned by the account is not taxed.

A

Achieving a Better Life Experience (ABLE) Accounts

ABLE

89
Q

A _____ is an unincorporated association of two or more individuals. _____ frequently open accounts necessary for business purposes.

A

partnership

90
Q

Types of business Partnerships:

A

General Partnerships, Limited Partnerships,

91
Q

General Partnership:

A

Ownership of a general partnership may be unequal, and specific responsibilities may be assigned to specific partners.
All owners may be held liable for actions of the partnership; there is no liability protection.
The business results of the partnership flow through to the partners for tax purposes proportional to their ownership interest.

92
Q

____ may be referred to as direct participation programs (DPPs). The ____ is the most common type of DPP.

A

Limited Partnerships (LPs)

93
Q

Limited Partnerships (LPs):

A

-An LP involves two types of partners: the general partner ( G ) and the limited partner. An LP must have at least one of each.
-LPs are not taxed directly as a corporation would be; instead, the income or losses are passed directly through to the owners of the partnership–the investors.
-GPs have unlimited liability, meaning that they can be held personally liable for business losses and debts. Their role is to manage all aspects of the partnership and they have a fiduciary responsibility to use the invested capital in the best interest of the investors.
-limited partners have limited liability, meaning that they can’t lose more than they invested. They have no business management responsibilities; in fact, should they participate in any day-to-day management of the business, they can lose their limited liability status

94
Q

The structure of the allows for the investor to receive income that si sheltered from taxes. DPPs use ____ and ____ to reduce taxable income.

A

depreciation and depletion

95
Q

There are several deductions that reduce the taxable income that are not actual costs. The following is a partial list of these deductions:

A

Depreciation
Depletion
Accelerated depreciation
Intangible drilling costs

96
Q

Income produced by LPs is called _______, and losses are called passive losses. _____ income is part of a customer’s ordinary income. ______ losses may be used to reduce a taxpayer’s passive income but are not applied to ordinary income.

A

passive income
passive losses

97
Q

Risks of Limited Partnerships:

A

Liquidity- Any transfer of an interest in an LP requires the permission of the GP. An investor in an LP should assume she will own the program until it ends.
Audit/Recapture of Tax Benefit:f the IRS disallows a prior tax benefit, the consequences flow through to the limited partners.

98
Q

A private, unregulated investment company organized in such a way so as to invest and achieve high returns utilizing debt leverage and derivative products such as options and margin is best described as

A

Hedge Funds

99
Q

The following are five important points to remember about real estate investment trust (REIT):

A

An owner of REITs holds an undivided interest in a pool of real estate investments.
2. REITs may or may not be registered (public or private) with the SEC.
3. REITs may or may not be listed (trade) on exchanges.
4. REITs are not investment companies (open end or closed end).
5. REITs ofer dividends and gains ot investors but do not pass through losses like
LPs and, therefore, are not considered DPPs. Taxation si under the conduit theory, similar tomutual funds.

100
Q

An ________, considered an equity security, invests in a specific group of stocks and generally does so to mimic a particular index, such as the S&P 500.

A

exchange-traded fund (ETF)

101
Q

The following are some advantages of ETFs when compared with open-end mutual funds:

A

Pricing and ease of trading- Because individual ETF shares are traded on exchanges, they can be bought or sold anytime during the trading day at the price they are currently trading at, as opposed to mutual funds, which use forward pricing and are generally priced once at the end of the trading day.
Margin- ETFs can be bought and sold short on margin like other exchange-traded products (ETPs). Mutual funds cannot be bought on margin, nor can they be sold short.
Operating costs. ETFs traditionally have operating costs and expenses that are lower than most mutual funds.
Tax efficiency. ETFs can and sometimes do distribute capital gains to shareholders like mutual funds do, but this is rare. Because these capital gains distributions are not likely, there are likely no further tax consequences with ETF shares until investors sell their shares

102
Q

The following are some disadvantages of ETFs when compared to open-end mutual funds:

A

Commissions- The purchase or sale of ETF shares is a commissionable transaction. The commissions paid can erode the low-expense advantage of ETFs. This would have the
greatest impact when trading in and out of ETF shares frequently or when investing smaller sums of money.
Overtrading- Given the ability to trade in and out of ETFs easily, the temptation to do so is possible. Excessive trading can eliminate the advantages associated with investing in a diversified portfolio and add to overall commissions being paid by the investor, further eroding any of the other expense and operating-cost advantages associated with ETFs.
Market influences on price- Because ETFs trade on exchanges, share prices can be influenced by market forces such as supply and demand, like any other ETP. In this light, investors need to recognize that just as they might receive less than book value per share when selling corporate shares of stock, they might also receive less than NAV per share when selling ETF shares.

103
Q

The primary risk associated with ETNs is _____.

A

default risk

103
Q

Exchange-traded notes (ETNs) are ________ issued by a bank or financial institution. Therefore, they are backed only by the good faith and credit of the issuer.

A

unsecured debt securities

104
Q

ETNs are bond-like instruments with a stated ____, but they do not pay interest and they offer no principal protection.

A

maturity date

105
Q

Time Value=

A

Premium- Intrinsic Value

106
Q

Intrinsic Value=

A

Stock Price-Strike Price

> 0 is in the money
=0 out or in the money

107
Q

When the Contract Expires the time value is __

A

0

108
Q

Time Value is constantly

A

decreasing

109
Q

Premium=

A

Time Value + Intrinsic Value

110
Q

_____ is a measure of what an asset is worth

A

Intrinsic Value

111
Q

Call Short wants Price to be ___ BE

A

below

112
Q

Call long want price to be ____ BE

A

above

113
Q

Long Put wants Price to be ___ BE

A

below

114
Q

short put wants Price to be ___ BE

A

above

115
Q

A put option is when a buyer___ and a seller ____

A

sells
buys

116
Q

In an option, the buyer controls the ____

A

contract

117
Q

long call or long put is the best because

A

you can exercise which means you are in control

118
Q

Hedging allows _____ or _____

A

protection or income

119
Q

If you are bullish and your risk is that the stock declines go ____ call or _____ put

A

long call or short put

120
Q

If you are bearish and your risk is that the stock increased go ____ call or _____ put

A

short call or long put

121
Q

headging is when you ….

A

add a stock position to an option position

122
Q

Types of Real Estate Investment Trusts

A

Equity
Mortgage
Regulation D

123
Q

REITs are not ____

A

Direct Participation program

124
Q

A customer writes (sells) a call. This customer will realize the maximum gain if…

A

the option contract expires without being exercised.

125
Q

Investors in hedge funds should know that the funds are ______ but must abide by laws that investors be accredited.

A

unregulated (no Securities and Exchange Commission (SEC) registration is required)

126
Q

Real estate investment trusts (REITs) pay _____ and pass gains through to investors but ______

A

dividends
not losses

127
Q

A ________ style exercise option may only be exercised on the final trading day. ______ style may be exercised at any time prior to expiration.

A

European style

American style

128
Q

The option _______ must be provided prior to account approval.

A

option disclosure document (typically referred to as the ODD)

129
Q

which is considered most risky in a strong bull market?

A

Writing Calls because Short (writing) calls are bearish and have an unlimited maximum loss potential

130
Q

A long customer notifies its broker-dealer (long broker-deal). The long broker-dealer notifies the _____ then assigns the ______ , who will then in turn assign its short customer.

A

OCC
short broker-dealer

130
Q

The maximum loss on a short put is

A

strike price – premium.

131
Q

Costs for items that will have some salvage value at the end of the program are considered ______. These items, such as equipment, can be depreciated and written off over the life of the program.

A

tangible drilling costs

131
Q

Unless specific instructions are given by the customer not to do so, options contracts will be automatically exercised at expiration if they are in the money by at least _____.

A

0.01

132
Q

limited partnerships are scheduled to _____

A

end on a predetermined date

133
Q

While the OCC can assign exercise notices using only the random-selection basis, a member firm may use any method that is fair and reasonable. The two most common methods are ____ or _____.

A

first in, first out (FIFO) and random selection.

134
Q

The OCC assigns exercise notices to short broker-dealers (those with customers who are short) using a _____ basis only

A

random-selection

134
Q

There is no underlying stock to deliver in an ______, nor does the writer deliver a basket of stock. The writer delivers cash equal to the intrinsic value of the contract.

A

index option

135
Q

Agency issues, U.S. government issues, and municipal securities are _____ from registration under the Securities Act of 1933

A

excepmt

136
Q

The allowable deduction for equipment used in an oil and gas direct participation program is taken as

A

The allowable deduction for equipment used in an oil and gas direct participation program is taken as

137
Q

A hedge fund portfolio has been characterized as being ______ This means that there is substantial borrowing or purchasing on margin

A

highly leveraged.

138
Q

The maximum gain on any short option position is the ______

A

premium

138
Q

Uncovered call writers have a maximum profit potential of the ______ received if the option expires worthless. The loss potential is _____ since the writer does not have the stock required to make delivery and would be forced to buy the shares in the open market.

A

premium
unlimited

139
Q

what are potential benefits associated with a real estate direct participation program?

A

Tax deductions and credits

140
Q

An investor who buys and sells options on stock is

A

neither an owner of nor a debtor of the company because it is a derivative security

141
Q

Direct participation programs (DPPs) are set up having the _____ of the business liable for any taxes due.

A

owners

142
Q

______ REITs typically hold commercial property rather than residential property. _____ REITs hold mortgages on commercial property, and hybrid REITs do both.

A

Equity
Mortgage

143
Q

The potential risks of a REIT are:

A

transparency.
reliability of valuations.
liquidity.

143
Q

Who are the typical investors in a local government investment pool?

A

Municipal governments

144
Q

One person can be both the beneficiary and owner if a 529 Plan T/F

A

True

145
Q

trading strategies are employed by hedge funds:

A

The use of borrowed money to purchase portfolio securities
The act of taking short positions in NYSE listed stocks

146
Q

REITS, organized as trusts, are not _____

A

investment companies

146
Q

A feature of direct participation programs is:

A

flow through of profits and losses of the partnership to the individual limited partners

Only DPPs allow flow through of losses

147
Q

What type of disclosure document is used for a 529 college savings plan?

A

Official statement

148
Q

____ provide the best protection against a short stock position.

A

Long calls

SIE Exam (13 decks)

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