Shared Flashcard Set

Details

investment companies
n/a
41
Business
Not Applicable
03/03/2013

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Cards

Term
Established as a trust Operates as holding co Supervised not managed Lower fees than mutual fund Fixed portfolio held for life of trust No substitutions made without written notice to SEC All unitholders must be notified of substation w/in 5 days. SEC can request liquidation.At maturity proceeds distributed to investors on a per unit basis
Definition
UNIT INVESTMENT TRUST
Term
Issue debt certificates that offer predetermined interest rates.
Definition
Face amount certificates
Term
Operate as a holding company for the portfolio
Definition
Each fund has its own inUnit investment trust
Term
Can be purchased with either periodic installments or lump sum payments.
Definition
Face amount certificates
Term
Supervised not managed
Definition
Unit investment trust
Term
Lower fees than mutual fund
Definition
Unit investment trust
Term
Fixed portfolio held for life of trust
Definition
Unit investment trust
Term
No substitutions made without written notice to The SEC.
Definition
Unit investment trust
Term
All unitholders must be notified of a substitution w/in 5 days.
Definition
Unit investment trust
Term
SEC can request liquidation if it deems it is ineffective
Definition
Unit investment trust
Term
Ag maturity the proceeds are distributed to investors on a per unit basis
Definition
Unit investment trust
Term
Have a maturity of at least 24 months
Definition
Face amount certificates
Term
Can be redeemed for a fixed amount on a specific date.
Definition
Face amount certificates
Term
Can be redeemed prior to maturity for their stated surrender value.
Definition
Face amount certificates
Term
Can be redeemed prior to maturity for their stated surrender value.
Definition
Face amount certificates
Term
Each fund has its own specific investment policies
Definition
Mutual fund
Term
Generally accepted definition of a mutual fund
Definition
Open ended
Term
Main difference between an open and closed mutual fund
Definition
How the shares are purchased and sold
Term
Do closed end or open end funds behave like shares of common stock
Definition
Closed end
Term
Sell full shares only
Definition
Closed end
Term
Sell fractional or full shares
Definition
Open end
Term
No secondary market, redeemed by the fund
Definition
Open end
Term
Common shared securities only
Definition
Open end
Term
Common shared only
Definition
Open end
Term
Priced....NAV+SC=POP
Definition
Open end
Term
Priced according to supply and demand
Definition
Closed end
Term
Shareholder rights:
Both open/closed end funds have voting and dividend rights, but only who has preemptive rights
Definition
Closed end
Term
Can either open or closed end funds be diversified or non-diversified?
Definition
Yes
Term
Investment co act of 1940 defines diversified as 75-5-10 rule
Definition
For 75% of assets, no more than 5%can be invested in any one company. And with this portion, the investment company can't own more than 10% of the voting stock of any target company. There are no restrictions on the other 25% of the assets of the management company.
Term
Non-diversified companies do not have to follow the 75-5-10 rule
Definition
Find it more expedient to pursue their stated goals
Term
Fundamental to long term investing is
Definition
Diversification
Term
Effect of funds diversified in industries
Definition
Industries: funds with holdings in wide range of industries tend to reduce the effect of periodic downturns in a particular area of industry
Term
Effect of funds diversified in different types of investments
Definition
Can offer stability in volatile markets
Term
What fund might provide stability in a volatile market
Definition
A portfolio containing different types of securities like:
A well diversified income-oriented fund might hold common stocks with a history of high dividends as well as preferred stock, corporate and treasury bonds and money market instruments
Term
What fund would contain a large number of companies including large and small cap users for a long term strategy
Definition
Growth orientated equity fund
Term
Usually capitalized through a one-time offering of shares.
Definition
Closed-end companies
Term
After initial offering, values fluctuates with the market
Definition
Closed end companies
Term
Trading may take place on exchange or in the OTC market
Definition
Closed end companies
Term
The investment company does not continuously redeem shares held by investors
Definition
Closed investment company
Term
What,ind of investment company may trade at a premium above or below their NAV
Definition
Closed-ended investment companies
Term
When investors want to liquidate their shares, they must liquidate them at the then-current market value
Definition
Closed end investment companies
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