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Details Title: Series 6 Description: Glossary Total Flash Cards: 372 Created: 12/05/2004 05:20:48	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term Accredited investor Definition a financial institution, a private business development company, directors or officers of the issuer, or an individual with a net worth of $1,000,000 for the past two years Term Accretion Definition the increase of the cost basis on a bond Term Accrued interest Definition interest realized between interest payments Term Accumulation unit Definition the deposited money in an annuity is expressed in these units Term Act (the) Definition The Uniform Securities Act of 1933 Term Ad valorem tax Definition a property tax based on the assessed value of real estate Term Administrator Definition the State securities commission, its commissioner, or secretary Term Advertisement Definition any notification material used in the media Term Agency capacity Definition when a firm effects trades for the account of others Term Agent Definition any individual who represents a broker-dealer or issuer in effecting securities transactions Term Aggressive growth fund Definition potentially volatile funds that invest in cutting-edge industries or start-up companies with unproven earnings Term All-or-nothing underwriting Definition if a corporation cannot sell an entire issue, the sale is cancelled Term American Depository Receipts (ADRs) Definition a foreign security on deposit at an overseas American bank branch Term Annuitant Definition the person receiving the payments from an annuity Term Annuity Definition a contract that provides for payments over the life of the contract Term Annuity period Definition the payout period of an annuity Term Annuity units Definition the payments from an annuity are expressed in these units Term Articles of incorporation Definition the charter granted by the state where the corporation exists Term Asked price Definition the lowest price a seller is willing to accept for a security Term Assessable security Definition a security whereby the issuer can assess the owner for additional money Term Assumed interest rate (AIR) Definition an assumption of a reasonable rate of return on a security Term Authorized share Definition the number of shares to be issued according to the articles of incorporation Term Backing away Definition offering a quotation that is not qualified then failing to transact an order on that basis Term Banker’s acceptance Definition checks payable at a specified future date drawn on and accepted by a bank Term Bearer bond Definition a bond in which the owner's name is not recorded on either the bond or in a book of the issuer Term Best efforts underwriting Definition unsold issues of an underwriter offering may be returned unsold to the issuing corporation Term Bid price Definition the highest price that a buyer is willing to pay for a security Term Blue chip stock Definition highly rated issues of large, mature companies Term Board of directors Definition elected by shareholders who become the governing body of the corporation (or mutual fund) Term Bond Definition a corporate or government debt security Term Bond anticipation note (BAN) Definition used for temporary project financing that eventually will receive revenues from a bond issue Term Bond fund Definition mutual fund that invest all of their assets in debt securities Term Bondholder Definition the possessors of debt instruments Term Book Definition an exchange floor supervisor's ledger for trade entries Term Book entry Definition ownership of a bond evidenced by an accounting entry with no physical certificate Term Broker Definition a person engaged in transacting securities business for the account of others Term Broker-dealer Definition a person who effects securities transactions for their own account or the account of others Term Call feature Definition the issuer has the flexibility to retire debt prior to maturity Term Call option Definition gives the buyer of the contract the right to purchase the underlying security at the strike price Term Callable Definition the right to call or repurchase a stock Term Capital gains Definition appreciation of the market value of a security Term Capital loss Definition an investment sold for less than its cost basis Term Capital structure Definition the sum of all issued securities of a corporation Term Cash value Definition the accumulated value of an insurance policy that will be returned to the policyowner upon surrender of the policy Term Cashing out Definition to sell a security in a conclusive way for money Term Cease and desist order Definition an order preventing the continuation of an action Term Certificate of deposit Definition short term instruments issued by commercial banks Term Certificate of interest Definition received for signing a subscription agreement within a limited partnership Term Churning Definition engaging in transactions solely to generate commissions Term Civil liability Definition a liability created without willful intent by a violation of the Uniform Securities Act Term Civil penalty Definition non-criminal penalties usually resulting in a fine Term Closed-end investment company Definition an investment company whose issues are not redeemable Term Code of Arbitration Definition concerned with settling disputes between dealers or brokers and the public Term Code of Procedure Definition outlines procedural process in the event of securities violations Term Collateral trust bond Definition bond issued by a corporation that own subsidiaries or portions of other companies and use these stocks as collateral for a bond issue Term Collateral trust certificate Definition marketable securities are used as collateral to back the certificate collateralized mortgage obligation (CMO) Term Commercial paper Definition promissory note issued by a corporation Term Commission house broker Definition executes securities orders for clients of his firm or the firm's own account Term Common stock Definition company stock that does not pay a specified dividend Term Conduit theory Definition a consideration to alleviate extra tax burdens on shareholders Term Consent to service of process Definition a statement of eligibility for the filing of a security Term Conservator Definition a person appointed by the Administrator to maintain decedent or the decedent's assets Term Contingent deferred sales charge (CDSC) Definition a fund offered at NAV that will include a sales charge if the fund is redeemed within a specified period of time Term Contractual plan Definition where sales are held by a trust for employees of a Term Company control stock Definition stock acquired by an affiliated person such as officer or director Term Controlling person Definition supervisory personnel of registered representatives or agents Term Conversion parity Definition the market value of a bond is equal to the market value of the common stock for which it is exchanged Term Conversion price Definition the price that would be feasible for the preferred shareholder or bondholder to convert to common stock Term Conversion privilege Definition allows a bondholder to convert the bonds for shares of common stock Term Conversion ratio Definition the number of shares that will be received for each share of preferred stock or corporate bond Term Cooling-off period Definition the 20 days after the filing date of a registration statement Term Corporation Definition a legal business entity whose existence is legally distinct from the people who own or control it Term Cost basis Definition the original purchase price of a security, inclusive of sales charges Term Coupon rate Definition the interest rate paid on a bond Term Criminal liability Definition a liability created by the willful violation of an order or provision of the Uniform Securities Act Term Cumulative dividend Definition a provision that allows no dividend to be paid to common stockholders if preferred dividends are in arrears Term Cumulative voting Definition number of shares times number of vacancies equals number of votes Term Current yield Definition annual interest paid on a bond divided by its current market value Term Custodian Definition a national bank or trust company that safeguards a mutual fund's physical assets. Also, the fiduciary of a minor's account (UGMA) Term Cyclical stock Definition stock whose earnings tend to fluctuate within the business cycle of their industry Term Date of annuitization Definition the date that accumulation units are converted to annuity units Term De minimis rule Definition an agent may effect securities transactions prior to registering with the State Term Dealer Definition any person who performs securities transactions for their own account as a part of regular business Term Death benefit Definition the amount the beneficiary receives from the decedent owner of an annuity or life insurance policy Term Debenture Definition a bond issue that is not secured by a pledged asset Term Declaration date Definition the date the board of directors authorizes a dividend Term Defensive stock Definition stocks in companies that have a resistance to recession Term Deferred annuity Definition payments from the annuity are delayed for a specified period of time after the deposit Term Deferred sales charge Definition the sales charge is determined by the length of time the security is held Term Defined benefit plan Definition the employee is assured a specified annual benefit payment at retirement Term Defined contribution plan Definition a retirement plan where the employer is required to fund a specified contribution on behalf of each employee Term Deflation Definition the persistent and appreciable decline in general price levels Term Discount Definition a bond that is sold at less than par value Term Discount security Definition security that is purchased below the face value and redeemed at full value Term Discount yield basis Definition the yield denotes the percentage discount from the face value of the issue Term Discovery Definition the initial notice of an act or violation Term Discretion Definition the controlling influence effecting securities transactions Term Distributor Definition the principal underwriter of a mutual fund Term Diversification Definition the spreading out of investment assets to reduce volatility Term Diversified portfolio Definition a portfolio that contains various investment vehicles and/or asset classes Term Dividend Definition a payment of earnings of a corporation per share of stock Term Dollar cost averaging Definition systematic investments at fixed intervals, usually monthly or quarterly due diligence proper investigating and researching of a security prior to transaction Term Effective date Definition the date in which a registration statement becomes effective Term Equipment trust certificate Definition equipment owned by the issuing corporation is used as collateral to back a debt issue Term Equity option Definition represents 100 shares of a specific common stock Term ERISA Definition the Employee Retirement and Income Security Act of 1974 establishing IRS standards for qualified retirement plans Term ESOP Definition Employee Stock Ownership Plan, a profit sharing plan whereby the employer contributions are invested in the stock of the company Term Ex-dividend Definition the date in which a stock trades without the right to receive a dividend Term Exempt security Definition a security that is not required to be registered Term Exempt transaction Definition trades that do not normally include the general public Term Exempted offering Definition certain securities that are exempt from registration requirements of the Act Term Expense guarantee Definition establishes the maximum amount of administrative expenses for annuity or variable life contracts Term Expense ratio Definition total expenses of a mutual fund divided by the fund's total net assets Term 5% policy Definition a guide to member firms in establishing fair pricing policies Term Face amount certificate Definition debt certificates that offer pre-determined interest rates Term Fannie Mae Definition the Federal National Mortgage Association Term Federal registration Definition registration made effective by the SEC Term Federal Reserve System Definition the body that implements US monetary policy Term Federally covered advisor Definition an advisor directly registered with the SEC Term Federally registered adviser Definition advisers of assets in excess of $25,000,000 Term Fiscal policy Definition the government's usage of taxation and expenditure programs to maintain a stable economy Term Fixed annuity Definition fixed dollar payments that remain constant Term Floor broker Definition executes orders for clients of his firm or for the firm's own account Term Foreign currency option Definition specified amounts of foreign currency trading as an option to buy or sell at a specific price Term Forward pricing Definition pricing method used by mutual funds based on the next price to be computed Term Forward stock split Definition a stock split that increases the number of shares and reduces the prices per share proportionately Term Fourth market Definition transactions between institutional investors that deal directly with each other without utilizing a broker-dealer Term Fraud Definition the deliberate misleading of a person to effect a transaction Term Freddie Mac Definition the Federal Home Loan Mortgage Corporation Term Freeriding and withholding Definition a member firm withholds securities from hot issues for their own account when they have unfilled public orders Term Front-end load Definition sales charge of a variable contract whereby as much as 50% of the first year's premium may be charged against the account Term Fully registered bond Definition same as a registered bond with the addition of semi-annual interest payments sent from the issuer. No physical bond is issued Term General obligation bond (GO) Definition bond issued by a political subdivision that has the authority to levy and collect taxes Term Ginnie Mae Definition the Government National Mortgage Association Term Good delivery Definition delivery of stocks in certain, acceptable units Term Growth fund Definition funds invested in blue chip companies with a solid earnings history; minimum dividend payments as Term Growth stock Definition stock in a company that is expanding faster than the general economy and industry standards Term Growth income fund Definition a fund with a combination of both growth companies and companies that pay consistent dividends Term Guaranteed security Definition a security which has its payment of principle, interest, or dividend assured Term Hot issue Definition a stock that is in high demand and is over-subscribed Term Hypothecation Definition the usage of a client's filly-paid securities by an NASD member firm as collateral for a loan Term Immediate annuity Definition payments from the annuity begin one payment period following a lump-sum deposit into the contract Term Income fund Definition a fund that invests in companies that pay a high dividend in relation to their market value Term Income stock Definition a stock that pays a high dividend in relation to its market price Term Indenture Definition a contract for a corporate debt Term Industrial revenue bond Definition issued by municipalities but are supported by a tease agreement with a corporation Term Inflation Definition demand for goods and services exceeds supply causing prices to rise Term Initial public offering ([P0) Definition a new issue that represents a corporation's first stock distribution to the public Term Insider Definition anyone owning 10% or more of the issuer's shares of a security; also includes anyone possessing information not available to the public Term Insolvent Definition unable to meet financial obligations when due Term Insurable interest Definition a person purchasing life insurance on another individual has an insurable interest in that individual Term Insured Definition the person on whose life an insurance policy is written Term Interest rate option Definition grants the buyer the right to buy or sell a particular debt security at a designated price Term Interest-bearing security Definition security that pays a specified periodic interest rate Term Intrinsic value Definition when the market price of a stock is greater than the subscription price Term Investment adviser Definition a person who, for compensation, engages in the business of advising others in the purchase or sale of securities Term Investment adviser representative Definition employee of an investment adviser that may be a partner, officer, director, or other associated individual Term Investment advisory brochure Definition literature providing certain information that an investment adviser may submit to customers Term Investment company Definition corporations or trusts in which investors are able to pool their resources for increased diversification and professional management Term Issued shares Definition that amount of shares that have actually been sold Term Issuer Definition any person who issues or proposes to issue a security Term Joint and last survivor life annuity Definition payments from the annuity are made to two people; when one dies the payments continue to the joint annuitant Term Keogh plan Definition a retirement plan available only to self-employed individuals Term Letter of intent Definition allows an investor to qualify' for sales discounts without initially investing the entire required amount Term Letter of rescission Definition the document offering to buy back a security to mitigate a situation between an agent and a customer Term Level load Definition a level sales charge deducted from each installment into the contract Term Leveraged Definition any company that issues bonds and/or borrows money has leveraged their assets Term Life annuity with period certain Definition periodic payments will be made to the annuitant for a specified number of years Term Liquidity Definition the availability to turn an investment into cash Term Long-term gain Definition a capital gain on an asset held longer than one year Term Maloney Act Definition allows for self-regulation of the over-the-counter market Term Management company Definition the most prominent type of investment company; they may be diversified or non-diversified Term Margin requirements Definition the required money in an account necessary to purchase a security on margin Term Marginable security Definition securities that are approved to be purchased on margin Term Market maker Definition a dealer capable of making a continuous offering to buy and sell stocks Term Market value Definition the current price of a security Term Marketable security Definition a security that can be transferred to another party in a negotiated market Term Matched order Definition security trades that essentially cancel each other Term Material fact Definition an essential fact needed to make an informed investment decision Term Material inside information Definition any non-public fact that would have an effect on the value of a security in the marketplace Term Merchandising marketing scheme Definition multi-tiered marketing programs that primarily rely on recruitment of other sales personnel Term Mini-maxi agreement Definition a corporation may specify in the underwriting that a minimum amount of securities need be sold or the sale is cancelled Term Minimum required distribution Definition mandatory distributions from an IRA at 70½' Term Misleading statement Definition statements that infer something that is not truthful Term Monetary policy Definition an attempt to control the supply of money and credit in the economy Term Money market fund Definition a fund that invests in short4erm debt instruments Term Money market instrument Definition debt instruments that trade in the money market Term Mortality guarantee Definition an annuity guarantees payments for the life of the annuitant Term Mortgage bond Definition are collateralized by a lien or mortgage against real property Term Multi-level distributorship program Definition multi-tiered marketing program where residual sales are garnered by sponsors of the salesperson Term Multiple registration Definition an agent is affiliated with more than one broker-dealer Term Muni Definition a municipal bond Term Municipal bond Definition bonds issues by political subdivisions Term Mutual fund Definition an open-end investment company that continually issues redeemable shares Term NASD Definition the National Association of Securities Dealers Term NASDAQ System Definition National Association of Securities Dealers Automated Quotation System Term NASDAQ National Market System Definition combines features of the NASDAQ system with reports of transactions, displaying data on the last trade and volume Term National exchange Definition a stock exchange accessible to the entire country Term National Securities Market Act of 1996 Definition passed to minimize the dual registration of investment advisers both federal and state levels Term Net asset value (NAV) Definition the current market, or bid price, of a mutual fund Term Net investment income Definition the investment income from securities held in a mutual fund portfolio Term Net worth Definition the value of an individual measured by their total assets less total liabilities Term Net yield Definition the yield on a bond after taxes Term New York Stock Exchange (NYSE) Definition the oldest and largest exchange market in the US Term No-load fund Definition a fund with no sales charge and offered at NAV Term Nominal yield Definition the coupon rate of a bond Term Non-accredited investor Definition