5 - Trading Equities & Retirement Plans Flashcards Preview

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Flashcards in 5 - Trading Equities & Retirement Plans Deck (154)
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1

When a written trade confirmation must be given or sent to a customer

At or before the completion of the transaction (settlement)

2

The capacity shown on a confirmation when the shares are sold from the inventory of the broker-dealer

Principal

3

The capacity shown on a confirmation when the broker has arranged a trade between a buyer and seller

Agent

4

Compensation charged when a dealer sells shares from inventory

Mark-up

5

Compensation charged when a dealer purchases shares for inventory

Mark-down

6

Compensation charged when a broker transacts an order on a client's behalf

Commission

7

Standard trading unit of equity securities

Round lot (100 shares)

8

Order that is executed immediately at the current price, and has priority over all other orders

Market order

9

An order that is entered to protect a profit or prevent a loss

Stop order

10

Can be executed only at the specified price or better

Limit order

11

When principal approval is required for a new customer account

At or promptly after the first transaction in the account

12

Type of trading authorization granted to permit a third party to make trades but not withdraw cash or securities

Limited trading authorization

13

Type of trading authorization granted to permit a third party to make trades and withdraw cash or securities

Full trading authorization

14

Two types of custodial accounts established for minors

UGMAs and UTMAs

15

Joint account that passes assets to remaining tenant at death with no probate

Joint tenancy with rights of survivorship (JTWROS)

16

Type of account that passes assets by will to the heirs

Joint tenants in common (JTIC)

17

Type of joint account that permits unequal ownership interests

Joint tenants in common (JTIC)

18

Type of joint account that requires equal ownership interests

Joint tenancy with rights of survivorship (JTWROS)

19

Type of account that authorizes registered representative to make trades on behalf of the customer

Discretionary

20

Type of individual account that passes assets to a named beneficiary at death and avoids probate

Transfer on death (TOD)

21

Three trading restrictions for custodial account

Short sales, uncovered options, margin accounts

22

Prohibited practice of trading frequently to boost commissions

Churning

23

The number of days a firm has to validate positions when an account transfer is requested

One business day

24

The number of days a firm has to transfer the securities after the account has been frozen

Three business days

25

Two order instructions that are not considered discretionary

Time and price

26

Length of time mail can be held for customers that are traveling in the U.S.

2 months

27

Length of time mail can be held for customers that are traveling outside of the U.S.

3 months

28

Minimum frequency a statement must be sent to a customer in an inactive account

Quarterly

29

Frequency with which account statements are sent to customers in an active account

Monthly

30

Minimum frequency statements are sent to customers if penny stocks are held in the account

Monthly