Vocab

Question 1

Enjoin

Answer 1

Prohibit, ban

Question 2

Subpoena

Answer 2

Legal, written order to compel an individual to give testimony or provide documents or other tangible objects

Question 3

Pecuniary

Answer 3

Relating to or consisting of money

Question 4

Contumacy

Answer 4

stubborn refusal to obey or comply with authority, especially a court order or summons.

Question 5

Soft dollar

Answer 5

Products or services other than execution of securities transactions are obtained by an IA firm or through a BD in exchange for the direction by the IA of client brokerage transactions to the BD frequently referred to as directed transactions.

Question 6

Bespoke

Answer 6

Something is specially made or done for a particular person or purpose, rather than being mass-produced or generic.

Question 7

Intestate

Answer 7

Without a will

Question 8

Administrator in intestacy

Answer 8

Appointed by the courts to liquidate the state of a person who died intestate (without a will)

Question 9

Remainderman

Answer 9

When a trust has run its course and all expenses and distributions have been made, this is the person who receives the remaining balance.

Example: the husband dies and arranges for his wife to have full use of their home until she passes away. At that time, any surviving children inherit the home. They are the remaindermen

Question 10

Beta

Question 11

Alpha

Question 12

VIX

Question 13

Market Risk

Answer 13

Securities losing value based on the market losing value

Question 14

Interest Rate Risk

Answer 14

“Market risk” for bonds
Higher interest rates lead to
lower market prices

Question 15

Duration

Answer 15

A measure of a bonds price sensitivity with respect to a change in interest rates
Longer duration = greater change in price

Question 17

Stochastic modeling

Answer 17

A method of financial analysis that attempts to forecast how investment returns on different asset classes vary over time by using thousands of simulations to produce probability distributions for various outcomes. The term stochastic comes from the Greek word meaning “to aim or guess.”
Associated with Monte Carlo Simulation which uses computer programming to generate thousands of probabilities

Question 18

Efficient Set/Efficient Frontier

Answer 18

Collection of efficient portfolios, plotted on a risk-return parabola known as the efficient frontier. This curve represents maximum rate of return for every given level of risk. The objective is for the portfolio to lie ON THE CURVE.
Below the curve = too much risk for too little return.
Above the efficient frontier = impossible.