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Uniform Securities Act > CHAPTER 12 > Flashcards

CHAPTER 12 Flashcards

1
Q

What is TECHNICAL ANALYSIS

A

based on the examination of PAST performance of a PARTICULAR stock and/or INDEX in order to identify TRENDS or PATTERNS.

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2
Q

What is FUNDAMENTAL ANALYSIS

A

reviewing a company’s FINANCIAL STATEMENTS to determine its VALUE.

we also analyze:
- company’s management
- competitors
- standing in the marketplace
- economic outlook

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3
Q

3 sections of a CORPORATE balance sheet

A

Assets
Liabilities
Stockholder’s Equity

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4
Q

Market Capitalization

A

Market Price of Common Stock x Common Shares Outstanding

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5
Q

Corporation’s Capital

A

debt plus equity

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6
Q

Market Capitalization for:
- Large Cap
- Mid Cap
- Small Cap
- Micro Cap

A
  • Large Cap: $10 billion +
  • Mid Cap: $2-10 billion
  • Small Cap: $330m to $2 billion
  • Micro Cap: $50-300 million

(note: market capitalization does not include treasury stock)

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7
Q

Order of Liquidation

A
  1. secured creditors, including secured bond
  2. admin expense claims (taxes, current wages, lawyer and accountant fees)
  3. general creditors
  4. Subordinated creditors including subordinate debentures
  5. Preferred stockholders
  6. Common stockholders
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8
Q

CURRENT RATIO

A

Total current assets DIVIDED BY total current liabilites

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9
Q

WORKING CAPITAL

A

Total current assets MINUS Total current liabilities

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10
Q

QUICK ASSET RATIO

A

Total current assets MINUS inventory
DIVIDED BY
Total current liabilites

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11
Q

EARNINGS PER SHARE (EPS)

A

Net income MINUS preferred dividends
DIVIDED BY
number of OUTSTANDING common shares

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12
Q

What do GROWTH investors look for

A

HIGH p/e ratios
HIGH book value
HIGH retained earnings
LOW dividend payout ratios

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13
Q

What do VALUE investors look for

A

HIGH earning per share
LOW p/e ratios
HIGH dividend yields
LOW price to book ratios

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14
Q

Selling index puts is

A

BEARISH and may be used by a speculator or HEDGER.

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15
Q

What business structures report in form K-1?

A

LLC (Members)
S Corp (Shareholders)
Limited Partnerships (partners)

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16
Q

P0 (small 0) refers to:

A

anticipated ORIGINAL investment

17
Q

Is statement indicating that the IA GUARANTEES PERFORMANCE against a benchmark and, if it is NOT MET, the IA will SURRENDER its fee for that year

A

YES. This type of contract may exist.

18
Q

BOTH open-end and closed-end funds calculate NAV at

A

the end of the day. 4:00pm.

19
Q

5 facts about MASTER limited partnerships

A
  1. like limited partnership, pass through of income
  2. typically registered with the SEC
  3. trade on exchanges
  4. can only be formed by companies in real estate or natural resources
  5. Most MLPs are in the oil and gas industries
20
Q

An Investment Advisor’s ONLY client is a 3(c)(1) with LESS than $150 million are EXEMPT from:

A

registering with the SEC and must simply NOTICE FILE and PAY A FEE

21
Q

What does PRESENT VALUE do?

A

PREDICTS what an investment will be worth in the future.

22
Q

What does FUTURE VALUE do?

A

ESTIMATES what an investment will be worth in the future

23
Q

What can you do after 6 months with a Rule 147 offering?

A

Sell shares to a NON-RESIDENT

24
Q

Requirements of a Rule 147 offering:

A

80% of company’s ASSETS withing state
80% of company’s gross REVENUE is GENERATED from operations within the state
80% of proceeds are USED to operate business within the state
100% of PURCHASERS are located within the state

25
Q

When can an agent and a client share an account?

A

Client approval
Supervisor of BD approval
Gains must be proportionate to his investment in the account -

26
Q

What type of Trust incurs the MOST COSTS

A

Trusts with young children as beneficiaries because someone will have to manage the trust longer.

27
Q

What is required for a divorced person to be entitled to receive benefits on their ex-spouse’s work history:

A
  • The divorced person is unmarried (the ex-spouse may be married)
  • Is over 62 years old
  • Ex-spouse is entitled to SS benefits
  • The benefit the divorced person is entitled to is less than what they would receive with ex-spouse’s work history
28
Q

1:1 debt equity means the company is

A

HIGHLY LEVERAGED

29
Q

What does the Sharpe Ratio measure

A

RETURN of an asset based on the amount of RISK being assumed

Uniform Securities Act (9 decks)

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