Percentages

Question 1

What is 0.25%? (1)

Answer 1

•Max 12b-1 fee for no load fund

> 12b-1 fee is annual marketing or distribution fee. Considered operational expense and included in fund expense ratio

Question 2

What is 1%? (3)

Answer 2

> 100 basis points for bonds
Rule 144 volume limit (registration exemption for selling restricted stock, etc)
Maximum asset-based fee for mutual funds (max 12b-1 fee of 0.75% + FINRA 0.25% servicing fee)

“Rule 144 is a regulation enforced by the U.S. Securities and Exchange Commission (SEC) that sets the conditions under which restricted, unregistered, and control securities can be sold or resold. Rule 144 provides an exemption from registration requirements to sell the securities through public markets if a number of specific conditions are met. The regulation applies to all types of sellers, in addition to issuers of securities, underwriters, and dealers.”

“A 12b-1 fee is an annual marketing or distribution fee on a mutual fund. The 12b-1 fee is considered to be an operational expense and, as such, is included in a fund’s expense ratio. It is generally between 0.25% and 0.75% (the maximum allowed) of a fund’s net assets.”

Question 3

What is 5%? (2)

Answer 3

> Markup policy guideline
For 75% of a diversified management company’s assets, they can’t have more than 5% of those assets in a single issuer (no restriction of the other 25%)

Question 4

What is 6%? (1)

Answer 4

•penalty for excess IRA contributions

Question 5

What is 8.5%? (1)

Answer 5

> Max sales charge for open-end company (mutual fund)

Question 6

What is 10%? (4)

Answer 6

> Penalty for premature IRA distribution (59.5 y/o)
If own 10% of outstanding share then affiliate or control person
10% max sales charge on public limited partnerships
For 75% of diversified management company assets, can’t own more than 10% of voting control of single company

Question 7

What is 25%? (1)

Answer 7

Min maintenance for LONG stock position

Question 8

What is 30%? (1)

Answer 8

Min maintenance for SHORT stock position

Question 9

What is 40%? (1)

Answer 9

Minimum percentage of mutual fund board members that must be non-interested members

Question 10

What is 50%? (5)

Answer 10

1. Reg T
2. Penalty for insufficient IRA distribution after age 72
3. Amount of sales proceeds credited to SMA in margin acct
4. Required cash deposit when withdrawing stock form margin account
5. Corporate dividend exclusion

Question 11

What is 75%? (2)

Answer 11

> Min amount of IC’s assets that must be invested in securities of other issuers to be classified as diversified
Amount of limited partnerships assets that must be identified to be a specified program

Question 12

What is 90%? (2)

Answer 12

1) Min of net investment income that a mutual fund must distribute by year end under sub chapter M
2) Min amount of net operating income that a REIT must distribute by year-end

Question 13

What is 100%? (2)

Answer 13

> Required equity when buying new issues, options, or mutual fund shares
Amount of a non required cash deposit that gets credited to SMA

Question 14

Penalty for excess Ira contribution

Answer 14

6%

Penalty is 6%

Question 15

Max sales charge on public limited partnerships

Answer 15

10%