Flashcards in Chapter 5: Product Information - Investment Company Securities And Variable Contracts Deck (97)
Loading flashcards...
0
Owns a piece of all the ingredients in the portfolio:
Undivided interest concept
1
75% of a portfolio, 5% or less of assets into one company, 10% or less of one company's outstanding voting shares owned
75-5-10 rule
2
Would keep track of all the dividends and capital gains distributions:
1099-DIV
3
Investors receive one semi-annual report and one annual report from the fund:
Mutual fund
4
Grow profits faster than competitors and/or overall stock market, P/E ratio, dividend income would be secondary goal:
Growth fund
5
Seek out companies valued much less than actually worth, high dividend yields, very conservative:
Value funds
6
More aggressive than value funds, and less volatile than growth funds, "middle of the road approach", allows investors to get a diversified investment that can also maximize growth potential:
Blend/core funds
7
Buy equities that provide dependable income, dividend income is main reason for purchase, receiving dividends reduce the volatility of an investment
Equity income funds
8
Keeps large percentage of its assets in both the stock and bond markets:
Balanced fund
9
Invests in companies located anywhere but the US:
International fund
10
Invests in companies located and doing business anywhere in the world, including the US:
Global funds
11
Typically no sales charges and low expenses and management fees:
Index funds
12
Can't do well during a slump and is considered volatile/high risk:
Specialty fund
13
If the investor is not in a high tax bracket of investing in an IRA, 401(k), etc., recommend:
Taxable bond funds
14
If the investor is in a taxable accountant wants to earn interest exempt from federal income tax, recommend:
Tax-exempt bond fund
15
Buy short-term obligations of states, counties, cities, school districts, etc., pay low rates of interest, should be sold to top marginal tax bracket investors:
Tax-exempt money market funds
16
Opened to sophisticated, accredited investors, illiquid (at least 1 year), risky strategies, charge high management fee and 20% of gains, private investment partnership (limited):
Hedge funds
17
Expensive, limits upside of profits made, for conservative investors who need a lump sum at a fixed point in the future, no income for a while, lock-up period (5-10 years), dividends/capital gains must be reinvested, sales charge and operating expenses are high:
Principal-protected funds
18
Has over $1 million in net worth and makes >$200,000 per year. A married couple, assets held jointly count toward the $1 million, and income needs to be >$300,000:
Accredited investor
19
Funds that are more rigid in their percentages compared to a balanced fund:
Asset allocation funds
20
A mutual fund that holds shares in a bunch of other mutual funds, expense ratios tend to be expensive, sales charges may be high:
Funds of funds
21
Provides information on the party managing the portfolio (investment adviser/portfolio manager):
Prospectus
22
Not all funds have sales charges or redemption fees, but all funds have expenses:
True
23
Indicates the administrative efficiency/effectiveness of the fund, may be a tiebreaker when choosing between similar funds:
Expense ratios
24
Cover distribution expenses and leaves a profit for the underwriter/sponsor/distributor of the fund:
Sales charge
25
The maximum allowed sales charge:
8.5%
26
Sales charge, redemption fee:
Shareholder fees
27
Management fee, 12b-1 fee, custodial fee, transfer agent fee, consulting and legal work, board of directors salaries:
Expenses
28
Capital appreciation, dividends, capital gains:
Total return
29
