Ask; Redemption Price. The minimum price at which a share can be purchased is: A. exercise price I Investment in U.S. minted gold coins is permitted The ratio of the current stock price to last year's earnings per share is known as the ______ If the securities in the fund portfolio pay dividends, these are received by the Fund. D Members of an investment clubC. The best answer is C. Interest payments on loans, intangible drilling costs (the cost of drilling for oil and gas), and depletion allowances (the recovery of monies paid to buy the oil or gas reserve) are all tax deductible items under the Internal Revenue Code since they are "ordinary and necessary business expenses." This makes sense because REITs cannot pass losses to their shareholders. Fund dividends are taxable, whether or not they are automatically reinvested in additional fund shares. that day's opening Net Asset Value If the disclosure is not made, the registered representative has committed a violation known as a breakpoint sale. A backing away violation is where a firm quote is given to a customer and then not honored - the representative has backed away from that quote. Label each article definite or indefinite. A. StockB. The maximum annual 12b-1 fee is .75% of net assets per year under FINRA rules. open end management company A Explain. When a fund pays either a dividend distribution or capital gains distribution, the NAV per share is reduced on the ex date to reflect the lower per share value. II and III The formula for the expense ratio of a mutual fund is: A. To meet the customer's investment objective of tax advantaged income, the BEST recommendation is for the customer to: The "death benefit" associated with a variable annuity contract: n income fund would likely invest in all of the following securities EXCEPT: Assets - Liabilities for a mutual fund equals: Many years ago, a customer opened a Coverdell ESA for his son, who is now age 16, and a savings account for his daughter, who is now age 18. II the price of the stock fluctuates Require payment of premium sector fundC. III If the mutual fund makes dividend distributions to shareholders, the Net Asset Value per share will decrease The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n): I and IVD. Open-end funds continuously issue and redeem shares. Friday, June 16C. $1,918D. B. I, III, IV. A closed end funds Net Asset Value is $8.50. III and IV onlyC. At a predetermined time, the interest rate is decreased to a rate that is at, or below, the market C. At a predetermined time, the maturity is decreased or "stepped down" D. ETFs permit individual investors to buy creation unit. Which of the following statements are true about public corporations? C. III only A. A Which statement is TRUE regarding this situation? II Mutual funds cannot be purchased on margin; exchange traded funds can be purchased on margin D $1,025C. The next day, the index declines by 5%. News media quotes for mutual fund shares show the Bid Price at Net Asset Value. II and III dividends at Net Asset Value and capital gains at the Net Asset Value. Similarly, undistributed income retained by the fund would not be taxed, since it consists solely of tax free municipal interest income. Which of the following statements about real estate investment trusts is true? The sales charge is reduced by 1% for every full year that the fund is held. A. After the LOI is completed, the additional NAV from the asset appreciation is added to the account balance, and establishes a new higher base level ($25,000 deposited plus $5,000 asset appreciation = $30,000) from which the sales charge will be calculated on any future purchases. ), I-Shares allow investors to invest in stock indexes based on all of the following EXCEPT: Both Treasury bonds and Treasury notes are Issued with maturities ranging from 10 to 30 years. III onlyC. In order to be regulated under Subchapter M of the IRS Code, at least how much of the Net Investment Income must be distributed to the mutual fund shareholders? A customer has $300,000 to invest in the fund. III. Investment Companies (Ch 7): Overview (Sec 1): Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Rhetoric Catechism Questions feature (wk1-6). A An inverse ETF based on the price movements of 20+ year Treasuries would have the largest profit when interest rates rise. $1,025 Depreciating securities in the Fund portfolio will also decrease NAV per share. Correct Answer C. Fixed percentage They can be bought on margin or sold short. How many shares of the fund can the customer purchase? The customer pays the offering price of $9.59 per share x 200 shares = $1,918.00. 1) Which of the following statements about the money markets are true? Acme $9.90 10.25 +.10 He is risk-tolerant and understands the use of leverage and shorting as ways of enhancing returns. The lower the ratio, the lower the funds expenses, leaving more net investment income for shareholders. exchange-traded income (adjustment) bond, Which of the following statements concerning comparison of mutual funds are TRUE? >$20,000 - $45,000 6 % It appears that the representative has violated the insider trading rules because he divulged the mutual funds red flag threshold to the hedge fund customerD. The formula to find the offering price is: III and IV onlyC. The investor will receive: A contingent deferred sales charge is imposed if an investor redeems a mutual fund before holding the fund for a stated time period. for distributing income and capital gains III and IV only In this case, a 5% sales charge is imposed if the fund is redeemed within the first year. A customer redeems a mutual fund. At the end of the current year, Accounts Receivable has a balance of $3,460,000, Allowance for Doubtful Accounts has a debit balance of$12,500, and sales for the year total $46,300,000. yesterdays closing Net Asset ValueC. A. closed end management companyC. What are the terms used for the price specified in an options contract at which the underlying asset can be bought or sold? Offering Price, Contributions to Keogh Plans must be made by: The investor would like to diversify the portfolio and enhance returns without adding much additional risk. A. This will not work if the market moves straight up or straight down. 3 business daysC. They are directly accessible to individual investors. I, II, III asset appreciationC. And the fees charged are more similar to hedge funds than a traditional closed-end fund as well - with annual ongoing fees averaging 3%, and another average 2% fee when shares are redeemed (and this ignores the up-front sales charge that is imposed when the shares are purchased!). annual management fee against net assets of 20% plus a performance fee based on exceeding a benchmark index by 2%D. He or she should elect which type of withdrawal plan? Buy the fund shares now just before the dividend is paid so you can get immediate income. a violation known as interpositioning. Complete each sentence by writing the form of the verb indicated in parentheses. a. ETFs (Exchange Traded Funds) have an NAV that is based on the value of the physical underlying securities. Note that in the real world, competition among funds has forced sales charges well below this maximum permitted level. Acme is the sponsor for a variety of funds within the Acme family. The ACME family has an exchange feature at NAV. The normal ex-date of 2 business days prior to record date does not apply because there is no trading of mutual fund shares. III and IV only These funds have a one time issuance of a fixed number of shares and then trade like other negotiable securities. They have come to you to obtain information about the basic elements of a partnership agreement. Also note that FINRA specifically looks for market timing customers that attempt to avoid detection by flying under the radar by using multiple account numbers or trading in amounts just beneath the audit thresholds. Which statement is TRUE? C A. setting maximum sales charges on mutual fund purchasesB. D I Distributions to mutual fund shareholders are taxable to the holder in the year the distribution is made However, it will only redeem shares at stated intervals - usually quarterly - and it will not redeem the investors entire holding at these redemption dates. D. Fixed dollar, ERISA regulations cover: Since the customer has deposited $44,000 of the $50,000 required by the LOI already, the remaining $6,000 must be deposited to retain the reduced sales charge. This nurse is not wealthy enough for a hedge fund investment. If market prices remain constant, the plan will produce a lower average per share costB. $10B. Then the shares are listed on an exchange and trade like any other stock. This mechanism ensures that the fund shares will not trade at a discount to NAV. An ETN is an Exchange Traded Note. B A. I and III. Correct A. I and III C All of the following statements are true about Health Savings Accounts EXCEPT: A. HSAs are only appropriate for those individuals covered by high-deductible health insurance plans, Which of the following statements are TRUE regarding mutual funds and variable annuities that are in the accumulation phase? C I, II, III, IV. A If market prices are fluctuating, the plan will produce a lower average per share costC. II and III. The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000; that no more than 60% of the Board of Directors be interested parties - that is, they are affiliated with the sponsor, custodian, transfer agent, or firms in the selling group; and that the fund have a stated investment objective that can only be changed by majority vote of the shareholders. Inverse (Short) S&P 500 Index ETFC. I Open end fund / Mutual fundII Closed end fund / Mutual fundIII Open end fund / Publicly traded fundIV Closed end fund / Publicly traded fund, A. I and IIB. Some mutual fund companies accepted redemption orders past the 4:00 PM cut-off, allowing sophisticated traders to take advantage of after-4:00 PM ET market close news announcements - an advantage that the regular fund shareholders did not have. ETNs have market riskD. All of the above. Bid; Public Offering PriceC. The receipt of these monies into the Fund increases NAV per share. The provisions of the Investment Company Act of 1940 include which of the following? III based on the Standard and Poor's 100 Index Need help? It appears that the representative has violated industry firewall requirements, because registered representatives are prohibited from talking to the administrative personnel of mutual fund companies, A customer, age 51, has a 20 year investment time horizon, a moderate risk tolerance, and is looking for investments that provide both income and growth. IV Typical maturities of securities held in the portfolio are 30 days or less II and III onlyD. (If market interest rates rise, both stock and bond prices are negatively impacted. $750 The customer wants to sell the stock and asks his broker what will happen if there is no ready buyer for the stock. The venture must have a legitimate business purpose other than tax avoidance The partnership must have at least 1 general partner and 1 limited partner Only general partners can assume a management role Any asset can be held in the partnership If market interest rates fall, both stock and bond prices are positively impacted. I and IV onlyC. Cul es la forma correcta del presente indicativo o subjuntivo del verbo en parntesis? There is no sales charge, but they impose annual 12b-1 fees and service fees. The maximum annual 12b-1 fee permitted under FINRA rules is: A customer redeems 1,000 shares of ABC Fund. Which of the following statements are TRUE regarding money market funds? D. II and IV. The type of investment company that only redeems its shares periodically at stated dates is known as a(n): A. open end fundB. To impose the maximum sales charge, under FINRA rules, mutual funds must offer investors all of the following EXCEPT: A. BreakpointsB. D permitted only if the fund has been in existence for no more than 5 yearsC. The last price for Acme Fund is $10.25, so 100 shares will cost $1,025 plus a commission. True D Net Asset Value per share varies with the performance of the portfolioD. At the market opening, a customer purchases 200 shares of an S&P 500 Inverse ETF (-1x) at $50 per share. Their common stock can be bought or sold freely on stock exchanges. The judge who ________ that case has an office downtown. CMO planned amortization class tranche Buying a security into inventory directly from a customer with a mark-down. It must be adjusted for stock splits. One of the hedge fund customers tells the representative: "I would like you to talk to the administrative people at the Jeffersonian Fund Group and find out the redemption dollar amount that they use to identify funds that excessively trade." D D If a fund imposes a 12b-1 fee, FINRA limits to maximum up-front sales charge to 7.25% instead of 8.50%. The shares are not listed on an exchange, like an open-end fund. On this date, the Funds shares are reduced by the value of the distribution. $46.94 IV The annuity payment is fixed; the number of annuity units may vary The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. liquidityD. D Of course, any person who elects to reinvest the distributions in more shares will have now hold more shares, each one worth less than before. The anticipated tuition, starting 8 years from now, is $50,000 per year ($200,000 total tuition). Browse over 1 million classes created by top students, professors, publishers, and experts. The entire amount should be invested in one fund or one fund family to give the customer the lowest possible sales charge. Correct Answer A. $5,500 These 3 funds all have different sponsors. A Correct Answer B. I and IV permitted only if the 5-year fund return is doubled to make it comparable to the 10-year return of the Standard and Poors 500 IndexD. For example, if an investor has 1,000 shares @ $1 ($1,000 total) in the fund, and the assets appreciate by 10%, then the customer will have 1,100 shares at $1 ($1,100 total). They have relatively low credit risk. redeemableC. C B An accredited investor is one that earns at least $200,000 per year or that has a $1 million net worth and the nurse does not meet these tests. Which statements are TRUE regarding a Roth IRA? Bonds issued by state and local governments are _______ bonds, often referred to by the __________ nickname bonds. A fund that distributes at least 90% of its Net Investment Income to shareholders is termed a(n): A. income fundB. Front end sales chargeB. The customer will pay what price per share? will decrease A customer who places an order to buy 100 shares of Acme Fund will pay approximately: regulated fund The investor redeems the 100 shares at an NAV of $20 per share after holding them for 3 months. Their interest income is usually exempt from state and local taxation in the issuing state. On that date, the price of the shares is reduced for any distributions. I, II, III, IV, All of the following statements are true for both mutual funds and variable annuities that are in the accumulation phase EXCEPT: It is commonly used by dealers in government securities who sell Treasury bills to a lender and agree to repurchase them at an agreed price at a later date. What should the representative do? A repurchase agreement (repo) is a short-term form of borrowing that involves selling a security with an agreement to repurchase it at a higher price at a later date. Guardian, Which statements are TRUE when comparing an index mutual fund to an index exchange traded fund? fixed unit investment trust The customer starts with 200 shares at $50, or a $10,000 position. A customer has $35,000 to invest in a mutual fund with a Net Asset Value per share of $9.42 and a Public Offering Price of $10.30. III Distributions to variable annuity holders are taxable to the holder in the year the distribution is made The fund has the following breakpoint schedule: Purchase Amount Sales Charge$0 -$10,000 7.75 % $10,001 - $25,000 7.25 %$25,001 - Over 6.50 %. Close NAV b. C Because closed-end funds trade like stocks, the funds pricing is reflective of investors sentiment towards the fund. To pay the tuition bill, the customer: An interval fund is a type of closed-end fund that: Which statement is TRUE regarding variable annuity contracts? A mutual fund has a computed Net Asset Value per share of $12.30 and a Public Offering Price of $13.30. II Dividends On that date, the price of the shares is reduced for any distributions. D. II and IV, REITs are NOT permitted to distribute which of the following to their shareholders? ETFs have credit riskC. They hedge all positions to limit risks. 2X (Leveraged) S&P 500 Index ETF Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac). $5,500 for the wife; $0 for the husband Sketch your mental map of Russia. Instead, it will only redeem anywhere from 5% to 25% of the investors net assets at a single time. Access is limited to institutions and high net worth or high income individuals. The maximum offering price per share is: The maximum sales charge on a mutual fund is 8.5% under FINRA rules. D III The plan is in default and must be liquidated by the trustee 20 years to the annuitant or beneficiary, All of the following sources of REIT income are counted towards the 75% test required by Subchapter M EXCEPT: I and IIC. Which of the following investments is the most illiquid? They trade on exchanges like individual stocks. Hedge funds are partnerships that are completely illiquid. a. D. II and III, C. I and IV Which statements are true about bid-ask spreads? [3] The maximum tax deductible Individual Retirement Account contribution for this year is: Multiple choice question. premium Which statements are true of the DJIA? Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. The essential difference between an open end fund and closed end fund is that a(n): A. open-end fund is managed; while a closed-end fund is not managedB. They are structured as private placement limited partnerships that are only available to wealthy accredited investors. Which statements are TRUE regarding hedge funds? Nothing, since the account value is over $50,000B. It has been calculated since 1896. II and III $19 x 100 shares = $1,900 received upon redemption. Investing is best when you're looking to maintain the value of your money with a little bit of growth. It conveys voting power regarding the management of the firm. III and IV onlyC. For the rest of the year, the investor is locked into the investment. REITs do not allow for flow through of loss - only net income flows through to shareholders under conduit tax treatment. Under FINRA rules, the maximum sales charge that may be imposed by a mutual fund is 8 1/2% of the Public Offering Price. Which of the following are true of short futures positions? Mortgage Bonds For individual investors, the. ), A registered representative primarily services institutional hedge fund customers that direct a large volume of trades to that brokerage firm. is not deductible, The underwriter of a mutual fund is known as the: Because they are risk-free, they offer lower interest rates than other bonds. Also known as over-night borrowing (called as money at call) and for a period up to 14 days (called short notice). $745 C Their interest income is exempt from federal income taxation. It is listed and trades like a stock, so it has little marketability risk. 5% of Net Asset ValueB. What is the Net Asset Value per share of a mutual fund? For the customer exchanging Government Bond Fund shares for Growth Fund shares, a tax event has occurred. Technical analysis. are liquid. Money market funds usually do not impose sales charges. Fill in the blanks to complete the sentence. III Capital Gains A Fund dividends are taxable, whether or not they are automatically reinvested in additional fund shares. dividends at Net Asset Value and capital gains at the Public Offering PriceD. These agreements usually specify an income and loss-sharing ratio. B Dollar cost averaging requires that an investor make periodic payments (say monthly) of a fixed dollar amount (say $100 per month) to buy a given security. the life of the annuitant and then cease Which statement is TRUE regarding a Step-Down Certificate of Deposit? The customer decides to exchange his Government Bond Fund shares for Growth Fund shares within the same family. Such late trading is prohibited under the Investment Company Act of 1940. The Letter Of Intent (LOI) provision operates separately from Rights of Accumulation and takes precedence over Rights of Accumulation. setting maximum sales charges on mutual fund purchases requiring at least 40% of the funds Board of Directors to be non-interested partiesD. Capital gains taxes must be paid if they are sold for more than the investor's purchase price. I Mutual funds can be purchased on margin; exchange traded funds cannot be purchased on marginII Mutual funds cannot be purchased on margin; exchange traded funds can be purchased on marginIII Mutual funds can be sold short; exchange traded funds cannot be sold shortIV Mutual funds cannot be sold short; exchange traded funds can be sold short, A. I and III onlyB. $14.25 x 100 shares = $1,425 received upon redemption. If a fund distributes a dividend to shareholders, an ex date is set by the Board of Directors of the Fund. This means that payments will continue for: no-load fundC. Hedge funds started in the 1990s and the managers produced superior returns and were able to charge high fees. Bid is also the same thing as Redemption Price. Which individuals can join together and qualify for a breakpoint on their aggregate purchases of mutual funds?
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