Term
| IN ACCUMULATION PHASE, VALUE OF CONTRACT IS DETERMINED BY: |
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Definition
| Multiplying value of accumulation unit by total # of accumulation units. (# of Units x Value of Unit) |
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Term
| WHEN ASKED FOR THE CLOSED-END COMPANY |
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Definition
| They're looking for NAV (NAV>ASK) higher than ASK (Which one CANNOT be a mutual fund) |
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Term
BROKER-DEALER HIRE (--->) AGENT
INVESTMENT ADVISER HIRE (--->) INVESTMENT ADVISER REP (IAR) |
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Definition
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Term
| TRUE ABOUT YIELD ON BONDS |
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Definition
Current yield and yield-to-maturity usually move in the same direction.
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Nominal yield does NOT move |
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Term
| TAXATION OF MUTUAL FUND DISTRIBUTIONS |
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Definition
1. All capital gains and dividends reinvested are taxable for the year paid.
2. ALL CAPITAL GAINS AND DIVIDENDS REINVESTED AT NAV!!!
(NO SALES CHARGE) |
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Term
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Definition
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Term
| SAFETY LEVELS OF INVESTMENTS |
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Definition
1. Government issued securities
2. Mortgage backed bonds
3. Corporate bonds
4. Preferred stocks
5. Common stocks (get paid last) |
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Term
| REQUIRES SALES BY PROSPECTUS |
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Definition
Everything BUT Stocks
(i.e.: Mutual Funds, Unit Investment Trust, Variable Contracts, Contractual Plans, and Face Amount Certificate) |
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Term
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Definition
1. A surety bond (if has custody)
2. Passing an exam |
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Term
| PORTION OF VA PAYMENT THAT COVERS PAYMENTS TO BENEFICIARIES IF ANNUITANT DIES DURING ACCUMULATION PERIOD |
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Definition
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Term
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Definition
1. Omitting non-material information
2. Including non-material information
3. Intentionally NOT guaranteeing profits |
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Term
| NON-TAX QUALIFIED ANNUITY |
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Definition
1. Payments are subject to special taxation
2. Contract holder does not pay tax during the accumulation period
3. All withdrawals are taxed as ordinary income |
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Term
| NON-EXEMPT SECURITY (--->) MUST BE REGISTERED |
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Definition
1. If Unregistered (--->) Could be sold UNSOLICITED
2. Registered (--->) Could be sold SOLICITED AND UNSOLICITED |
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Term
| MUST BE ACCOMPANIED BY A PROSPECTUS |
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Definition
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Term
| MUNICIPAL SECURITIES EXEMPTIONS |
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Definition
Can NEVER be revoked
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The exemption of a TRANSACTION (such as a sale made to a bank) CAN be REVOKED |
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Term
| MORE EXAMPLES OF "THE NEGATIVES" |
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Definition
1. All are NOT included from registering EXCEPT: Who must register
2. All are NOT EXCLUDED from swimming EXCEPT: Who doesn't swim |
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Term
| THE NEGATIVES IN QUESTIONS |
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Definition
1. (-4) x (-3) = +12
2. (-2) x (+4) = -8
3. Odd # of negatives = negative
4. Even # of negatives = positive
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Which of the following is NOT EXCLUDED from NOT being EXEMPT from being a NO blue sky day? |
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Term
| INVESTMENT CLUBS (CLUB OF INVESTORS) NOT ALLOWED TO GET |
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Definition
Breakpoints
(Only Husband and wife and Dependent children) |
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Term
| HOW IS AN INVESTMENT ADVISOR COMPENSATED BY THE FUND |
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Definition
Percentage of assets (NAV)
(12b-1 fee)
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Advisors for individuals are paid a Fee |
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Term
| EXEMPT SECURITY (--->) DOES NOT NEED TO BE REGISTERED |
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Definition
| Could be Sold (SOLICITED & UNSOLICITED) |
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Term
DIVIDENDS ARE PAID:
CAPITAL GAINS PAID: |
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Definition
1. Dividends are paid QUARTERLY or MONTHLY
2. Capital gains ALWAYS paid ANNUALLY |
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Term
| DISTRIBUTION OF ASSETS IN CASE OF LIQUIDATION |
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Definition
1. Taxes
2. Debt (such as banks)
3. Bonds (Start Here if No Liquidation is mentioned)
4. Debentures
5. Preferred stocks
6. Common stocks (least senior or most junior) |
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Term
| CONTRACTUAL PLANS ARE STRUCTURED AS A |
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Definition
Unit Investment Trust (SAME THING AS CONTRACTUAL)
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Need 2 Prospectuses (ONE for the plan & ONE for the fund) |
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Term
| CAN SOMEONE TRADE BASED ON INSIDE INFORMATION LEGALLY? |
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Definition
| YES!! As soon as it becomes public |
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Term
| CAN SOMEONE BUY MORE STOCKS IF HIS ACCOUNT IS FROZEN? |
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Definition
| YES!! Payment must be made entirely in CASH. |
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Term
| CAN A MEMBER SELL A HOT ISSUE TO HIS BROTHER? |
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Definition
| YES!! If the brother has a history of buying that stock (or similar stock) |
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Term
| AN APPLICATION FOR A MUTUAL FUND IS FOUND IN THE |
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Definition
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Term
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Definition
1. Life Annuity (Highest payment)
2. Period Certain
3. Life Annuity with Period Certain
4. Joint and Survivor (Lowest payment) |
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Term
| ANOTHER NAME FOR THE STATE SECURITIES LAWS |
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Definition
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Term
| AGENTS MUST BE LICENSED IN STATES WHERE: |
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Definition
1. They live (home State)
2. The prospective client lives
3. Any state they do business
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SNOWBIRD: An agent can do business with someone who has TWO residences as long as the agent is licensed in ONE of the states. |
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Term
| AGENTS CAN SHARE AN ACCOUNT WITH A CUSTOMER IF: |
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Definition
Gains and losses are in proportion to agent's contribution
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ADVISORS CANNOT share accounts with customers |
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Term
| IF AGENT BECOMES FINANCIALLY UNSOUND, ADMINISTRATOR CAN: |
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Definition
1. Revoke the agent's license
2. Disallow renewal of license
3. Deny license |
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Term
| AFFECTS OF DIVIDENDS AND OFFERING PRICE CHANGES |
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Definition
1. Dividend increases = Positive
2. Offering Price increases = Negative |
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Term
| DEBT NOT BACKED BY THE FULL FAITH AND CREDIT |
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Definition
Equipment trust certificate
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Backed by full faith and credit:
a. Debenture
b. General Obligation (GO) |
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Term
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Definition
| Right for COMMON stockholders to maintain PROPORTIONATE share when new shares are issued. |
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Term
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Definition
1. Retirement plans
2. FIXED annuities
3. Commodity or FUTURE contracts (OPTION CONTRACTS)
4. Precious metals
5. Primary residence (condo or house)
6. Currency
7. Collectibles (ART, STAMPS) |
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Term
| Closed-End (Stocks).........EVERYTHING ELSE!!! |
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Definition
1. Unlimited # of shares/units
2. Price: In Prospectus
3. Cannot issue Senior Securities
4. Must be redeemable
5. Always need prospectus
6. Always newly issued |
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Term
| CLOSED-END (STOCKS)......vs. Everything Else |
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Definition
1. Fixed number of shares
2. Price: Supply & demand
3. CAN issue Senior Securities
4. Non-redeemable
5. Prospectus only as IPO
6. After IPO, sold on exchange or OTC as secondary issues |
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