Term
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Definition
| first business day after record date |
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Term
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Definition
| redeems shares, handle name changes, maintain records, paid from the fund |
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Definition
| generally a bank, safekeeper of assets o the fund, paid from the fund |
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Term
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Definition
| trades the portfolio to meet objectives, on two year contract by the BOD, adviser fee the largest expense, informs shareholders of tax status, must be registered with SEC under the 1940 Act. |
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Term
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Definition
| called sponsors or distributors, must be FINRA member firsm, may not inventory MFs shares, compensated only from sales charges, not an expense of the fund |
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Term
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Definition
| show performance one, five, eight years if in existence for eight years, if four years, then show one and four |
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Definition
| Statement of additional information, contains balance sheet, statement of operations, income statement, |
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Term
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Definition
| redeemable securities, invstmnt adviser manages portfolio, provides diversification, price determined by forward pricing - next price calculated, no secondary trading, full or fractional shares purchased, only security issued by a MF, carries voting rights, does not carry preemptive rights, ex-deividen: typically the day after record date as set by the BOD |
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Term
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Definition
| dividends from corp profits, price determined by supply and demand, traded on the exchange or the OTC market, sold in full shares only, first security issued by a public corp, carries voting rights, ex-dividend - 2 biz days before record date and set by SRO |
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Term
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Definition
| total assets - liabilities = Net assets (NA), the divides the NA by outstanding shares which = NAV. NA/shares outstnding = NAV |
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Term
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Definition
| difference between POP and NAV, Class A shares |
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Term
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Definition
| Contingent deferred sales charge(CDSC), Class B Shares |
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Term
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Definition
| deducted from the funds assets (avg total NAV) to cover marketing and distributing the fund to investors, compensate registered representatives, charge not to exceed .75% of the fund's assets per year, |
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Definition
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Term
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Definition
| No sales charge, investor purchases shares from fund itself at the next computed NAV. |
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Term
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Definition
| found in a MF portfolio that has growth as a primary or secondary objective. |
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Term
| Blue-chips, Bonds, preferred stock |
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Definition
| provide income to MF with income objectives |
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Term
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Definition
| invest in stocks of companies whose businesses are grwoing rapidly |
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Term
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Definition
| invest in stocks of companies whose businesses are grwoing rapidly, focus on generating capital gains rather than income |
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Term
| Blue chip or conservative growth |
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Definition
| invest in established and more recognized companies to achieve growth with less risk, LARGE CAP funds |
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Term
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Definition
| 15 billion of stock - mkt cap of 10 billion |
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Term
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Definition
| performance funds, greater risk to maximize capital appreciation, invest in newer companies - SMALL CAP funds |
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Term
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Definition
| stresses current growth over growth, investing in stocks of companies with long history of dividend payments |
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Term
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Definition
| invest in securities on which options can be written and earn premium income from wrting options, may earn capital gains |
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Term
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Definition
| Combo fund, combines objectives of growth and current yield by diversifying its stock portfolio among companies showing long-term growth potential and companies paying high dividends |
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Term
| Specialized (sector) funds |
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Definition
| 25% of assets in specialties, high appreciation potential, but may have higher risk to the investor. Precious Metals is a sector fund |
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Term
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Definition
| stock funds - different classes of stock. May find blue-chip stocks, high-risk/high potential return growth stocks or both growth and value |
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Term
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Definition
| Invest in securities to mirror the market index such as S&P 500. Index fund buys and sells securities |
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Term
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Definition
| invest in securities of companies that have their principal activities outside of the US. Long-term appreciation is their primary objective. |
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Term
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Definition
| invest in securities of foreign countries, while global or worldwide funds invest in securities of both US and Foreign countries. Currency risk may be a factor |
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Term
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Definition
| Hybrid funds, invest in stocks for appreciation and bonds for income |
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Term
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Definition
| split investments between stocks for growth, bonds for income, and money mkt instruments or cash for stability. |
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Term
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Definition
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Term
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Definition
| investors seeking high current income, credit risk, provide higher yields to investors than the gov't /muni bond funds |
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Term
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Definition
| purchase securities by the US Treasury or an agency of the US government such as Ginnie Mae. |
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Term
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Definition
| MF invest solely in other MFs |
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Term
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Definition
| available to ordinary investors that invest in hedge funds |
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Term
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Definition
| measuring the volatility of a security. |
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Term
| Preservation of capital; safety |
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Definition
| Gov't securities, Ginnie Mae |
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Term
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Definition
| Common stock or common stock MFs |
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Term
| wants balanced or moderate growth |
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Definition
| blue-chip (large cap) stocks |
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Term
| they are aggressive growth/speculation |
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Definition
| TEchnology stocks or sector funds |
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Term
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Definition
| Bonds - but no zero coupons |
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Term
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Definition
| Municipal bonds or muni bond funds |
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Term
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Definition
| corp bonds or corp bond funds |
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Term
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Definition
| Preferred stock and utility stocks |
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Term
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Definition
| Money markets( CD, real estate, annuities are not considered liquid) |
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Term
| want to keep pace with inflation |
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Definition
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Term
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Definition
| related the management fees and operating expenses to the fund's assets, formula for computation of a MF expense ratio - fund expenses/Avg Net assets = expense ratio |
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Term
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Definition
| allows investor to purchase more shares when prices are low and fewer share when prices are high. The avg cost per share is lower than the avg price of the shares. Does not guarantee profits in a declining mkt because prices may continue to decline. |
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Term
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Definition
| allows investor to purchase more shares when prices are low and fewer share when prices are high. The avg cost per share is lower than the avg price of the shares. Does not guarantee profits in a declining mkt because prices may continue to decline. |
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Term
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Definition
| investors pays premiums to the ins company that are invested in the company's general acct. Ins co is obligated to pay a guaranteed amount of payout to the annuitant based on how much was paid in. |
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Term
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Definition
| significant risk associated with fixed annuities. |
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Term
| EIAs - Equity Index Annuity |
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Definition
| investors seeking market participation, but with guarantees against loss. If index does well, then the annuitant is credited with a specified percentage of the growth of the index. |
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Term
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Definition
| Introduced to keep pace with inflation, premiums are invested in the separate acct of the insurer, because it is invested differently from the general acct, investments include stocks, bonds, MFs with objective of achieving growth that will match or exceed the rate of inflation. |
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Term
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Definition
| received the advantages of both fixed and variable annuities, investor contributes to both general and separate accts, which provids guarantee payments and protection against inflation |
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Term
| Single premium deferred annuity |
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Definition
| purchased with lump sum, but payment of benefits is delayed until a later date selected by the annuitant |
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Term
| periodic payment deferred annuity |
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Definition
| allows investments over time. Benefit payments are deferred until later date selected by the annuitant |
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Term
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Definition
| purchased with a lump sum, and the payout of benefits usually commences within 60 days |
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Term
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Definition
| differ from whole life, premiums are invested in the separate acct, cash value fluctuates with the performance of the separate acct and is not guaranteed. provide minimum guaranteed death benefit |
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Term
| Universal variable life insurance |
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Definition
| flexible premiums, invested in the separate acct and there is only a variable death benefit |
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Term
| Charges deducted from the separate acct |
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Definition
| Mortality risk fee(cost of ins), expense risk and investment mgmt fee (MEI) |
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Term
| Charges deducted from the gross premium |
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Definition
| SAS - sales load, admin fee and state prem taxes |
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Term
| death benefits are calculated |
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Definition
| ANNUALLY in a variable life insurance policy |
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Term
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Definition
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Term
| Unit Values are calculated |
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Definition
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Term
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Definition
| Must be available for loan after three years |
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Term
| central registration depository |
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Definition
| maintains information on all persons registered with FINRA including customer complaints |
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Term
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Definition
| securities broker/dealer that specializes in underwriting new issues |
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Term
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Definition
| type of underwriting - buy securities from issuer and resell to the public |
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Term
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Definition
| type of firm commitment - corp issues and they negogiate the conditions |
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Term
| competitive bid arrangement |
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Definition
| standard for new issue offering in the municipal securities market |
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Term
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Definition
| not required to register with the SEC |
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Term
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Definition
| must register with the SEC under 1933 act |
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Term
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Definition
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Term
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Definition
| issuer files with the state, independent of fed registration |
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Term
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Definition
| issuer registers simultaneously with the state and SEC. Both become effective on the same date |
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Term
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Definition
| Securities listed on the major exchange registered under 1940 Act are known as federal covered securities. State registration not required, state fee may be assessed |
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Term
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Definition
| preliminary prospectus used to guage investor reactions |
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Term
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Definition
| offer information to investors and not offer securities for sale |
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Term
| Issuers exemp from federal registration |
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Definition
| US gov't, US municipalities and territories, public utilities |
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Term
| securities exempt from the Securities Act of 1933 |
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Definition
| Commercial paper, bankers' acceptances, and securities acquired in private placements |
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Term
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Definition
| =listed securities=prices determined by auction |
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Term
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Definition
| =unlisted securities=prices determined by negotiation |
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Term
| Gov't and municipal bonds and unlisted corporate stocks and bonds |
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Definition
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Term
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Definition
| Third busines day following the trade date (T+3) |
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Term
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Definition
| date customers are required to pay for puchase transactions. Payment due two business days after settlement, regulates extension of credit |
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Term
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Definition
| When the BOD approves a dividend payment, it also designates the payment date and dividend record date |
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Term
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Definition
| two business days before the record date |
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Term
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Definition
| receive the dividend distribution |
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Term
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Definition
| two or three weeks after the record date, dividend disbursing agent sends dividend checks to all stockholders |
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Term
| DERP - order of dividend distributions |
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Definition
| Declaration takes place first, Payment of dividend is actually last, owners paid on date of Record and Ex-date is determined by the SRO |
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Term
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Definition
| People Act - Formed the SEC |
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Term
| Federal Reserve Board (FRB) |
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Definition
| regulate margin accts, credit extended for the purchase of securities |
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Term
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Definition
| which regulates the extension of credit to customers for purpose of purchasing securities by banks and other lenders |
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Term
| Investment Advisers Act of 1940 |
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Definition
| protect the public against fraud and misrepresetation by investment advisers |
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Term
| Investment Adviser does not include |
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Definition
| bank and bank holding, publishers of newspaper and magazines, broker/dealers, persons who advise solely on US govt securities, persons giving investment advice is incidental to their profession (lawyers, accountants, teachers and engerineers) |
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Term
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Definition
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Term
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Definition
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Term
| To avoid Taxation under Subchapter M, |
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Definition
| fund must be at least 90% of its net investment income to shareholders. |
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Term
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Definition
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Term
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Definition
| amount of money invested on which taxes or paid. |
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Term
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Definition
| investor who decides to liquidate shares determine the cost base by electing one of three accounting measures |
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Term
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Definition
| sell security at a loss and repurchase the same security with 30 days or after trade dae. |
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Term
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Definition
| relationship between the two(cost base - not taxable) and (part growth and accumulation - taxable) |
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Term
| exclusion ratio calculation |
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Definition
| annuity owner's cost basis divided by life expentancy |
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Term
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Definition
| allow pretax contributions to be made |
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Term
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Definition
| contributions only with after tax dollars, but allow earnings to grow tax deferred until retirement |
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Term
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Definition
| nonqualified retirement plans set up by the state and local gov't |
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Term
| deferred compensation plan |
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Definition
| contractual agreement with company and employee, employee to defer receipt of current income in favor of payout at retirement |
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Term
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Definition
| 5k contribution in one year |
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Term
| investments not permitted to fund IRAs |
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Definition
| collectibles, life insurance and municipal bonds |
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Term
| Ineligible investment practices |
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Definition
| short sales of stock, speculative options, margin account trading |
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Term
| Coverdell Education Savings Accounts |
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Definition
| allow after tax contributions up to 2k per year per student until their 18th birthday |
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Term
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Definition
| contributions made with after tax dollars, may be set up in more than one state, no income limitations |
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Term
| Simplified employee pension (SEP) |
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Definition
| qualified plan that offers a ease of admin for small business owners. Employer is allowed to contribute up to 25% of the employee's salary, 21years of age, has worked for employee for three years, recvd min level of compensation in the current year. |
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Term
| KEOGH plans (HR-10 plans) |
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Definition
| qualified plans intended for self employed persons and owner-employees of unincorporated businesses or professional practices. |
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Term
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Definition
| tax-sheltered annuity (TSA) - available to public educational institutions, private schools, tax-exempt organizations, and religious organizations |
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Term
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Definition
| promises a specific benefit at retirement |
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Term
| ERISA - Employee Retirement Income Security Act |
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Definition
| prevent abuse and misuse of pension funds |
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Term
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Definition
| eligibility rules for employees |
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Term
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Definition
| funds contributed to the fund must be separated from other corp funds |
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Term
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Definition
| certain number of years of service - entitle to the retirement benefit |
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Term
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Definition
| Plan doc must be in writing and employee given annual statements |
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Term
| Nondiscrimination (ERISA) |
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Definition
| eligible employees must be treated impartially through a uniformly applied formula |
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Term
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Definition
| all broker/dealers registered with SEC, must be SIPC members. This is insurance for broker/dealers in case they go bankrupt, it protects the customers. 500k coverage, 100k cash claims, |
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Term
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Definition
| Buyer of a call has right to buy, seller of a call has obligation to sell |
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Term
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Definition
| Buyer of a Put has the right to Sell, the seller of Put has the obligation to Buy |
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Term
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Definition
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Term
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Definition
| facilitate the trading of foreign stocks in US markets..typically issued by a bank that has bought the foreign stock |
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Term
| Dividend Yield calculation |
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Definition
| Annual dividend/current mkt value of stock = dividend yield or current yield |
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Term
| Straight (preferred stock) |
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Definition
| no special features...beyond the stated dividend payment |
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Term
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Definition
| dividends in arrers are made up |
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Term
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Definition
| issued with lower stated dividend, investors has the ability to convert to common shares and enjoy capital gains |
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Term
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Definition
| offers share of corporate profits |
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Term
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Definition
| Corporations often issue callable or redeemable, company can buy back from investors at a stated price after a specified date. Issuers are likely to call securities when interest rates are falling. |
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Term
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Definition
| fixed percentage of the bond's par value |
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Term
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Definition
measures bond's annual interest
annual int/ mkt price = CY |
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Term
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Definition
| annualized return of the bond if held to maturity |
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Term
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Definition
| short term obligations, issued at a discount from PAR |
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Term
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Definition
| pay interest every 6 months, maturity 2-10 years |
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Term
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Definition
| long-term security, pay interest every 6 months and maturity 10+ years, quoted like T-Notes |
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Term
| Non marketable gov't securities |
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Definition
| Series EE Bonds, HH bonds, I bonds, |
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Term
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Definition
| are backed in full by the gov't - receipts are not both zero coupon instruments. |
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