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Practice Final Concepts > Final #2 > Flashcards

Final #2 Flashcards

1
Q

What are 2 main components you must know regarding variable annuity separate accounts?

A

The separate account is legally segregated from the insurance company’s general account holdings

Variable annuity purchasers buy ACCUMULATION UNITS in the separate account

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2
Q

What is the lowest major interest rate in the economy?

A

The Fed Funds rate

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3
Q

What are the rankings of interest rates from lowest to highest?

A
  1. Fed Funds
  2. Discount
  3. Broker Loan
  4. Prime Rate
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4
Q

What is NASDAQ Level II?

A

Intended for use by OTC trading desks, NASDAQ Level II displays the quotes of all market makers in NASDAQ issues, and all customer orders for NASDAQ issues, with the quote or order size. The NASDAQ System allows for automated executions against these quotes or orders

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5
Q

What is NASDAQ Level I?

A

the first level of the NASDAQ system, it displays the inside market for the security - which is the best (highest) bid and best (lowest) offer. This level is intended for use by registered representatives.

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6
Q

What beneficiaries are available for the rollover of an IRA into an existing or new IRA?

A

Roll over of an inherited IRA into either an existing IRA for the beneficiary or a new IRA for the beneficiary is only available to surviving SPOUSES. It is not available for inherited IRAs where the beneficiary is a non-spouse.

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7
Q

What are the documents that are customarily used when opening a margin account?

A

Margin Agreement
Loan Consent Form
Credit disclosure

If new account, new account form must be signed

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8
Q

What does the symbol s/s stand for on the tape?

A

Round lots of 10

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9
Q

Do cash dividends affect the listing of options contracts?

A

No. Only stock splits do

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10
Q

What is a step down CD?

A

A “step-down” CD is one that starts with a high introductory “teaser” interest rate. Then the rate “steps down” to the market rate of interest at specified intervals. Regardless, at maturity, the CD is redeemed at par.

The principal is fixed

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11
Q

Are options traded on the NASDAQ?

A

No. No options trade on the NASDAQ

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12
Q

What 4 exchanges trade options?

A
  1. CBOE
  2. AMEX
  3. PHLX
  4. PSE (Pacific)
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13
Q

What is portfolio rebalancing?

A

Liquidating portions of over-performing asset classes and investing the proceeds in under-performing classes

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14
Q

The formula for the margin requirement to buy a Leveraged ETF is?

A

The leveraged multiplier (aka 300% = 3x) times the FINRA minimum margin requirement

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15
Q

What is an ADR?

A

An American Depositary Receipt is a foreign security that is held in a foreign branch of a U.S. bank. The foreign issuer does not have to register these with the SEC

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16
Q

What 3 letters are required to sell 144 stock?

A
  1. Seller’s Rep Letter
  2. Issuer’s Rep Letter
  3. Broker’s Rep Letter
17
Q

What is the most commonly used ratio to evaluate the ability of a REVENUE bond issuer to pay interest and principal?

A

Debt service coverage ratio: NET Revenues/Debt Service

18
Q

What type of fee is charged on all mutual funds, including “No-load” funds?

A

Management fees

19
Q

When is an investor considered to officially be a Limited Partner?

A

When the subscription agreement is accepted by the GP

20
Q

Order ticket information must be recorded by the member firm prior to order:

A

Entry

21
Q

Which annuity payment option will pay the estate of the annuitant if the full value of the account was not received?

A

Unit Refund Annuity

22
Q

What 2 risks of a variable annuity are assumed by the insurance company?

A
  1. Mortality risk - risk that covered lives longer than expected
  2. Expense risk - risk that expenses on account are higher than expected
23
Q

What risks are borne by the holder of a variable annuity?

A
  1. Investment risk
  2. Legislative risk
  3. Interest rate risk
24
Q

Dealer offerings of corporate bonds found in Bloomberg are what type of quotes and offering?

A

Wholesale quotes in the secondary market

25
Q

What are the 2 characteristics of a defined contribution plan, regarding contribution and payout?

A

The contribution amounts are a fixed percentage, while the benefit amount to be received will vary

26
Q

How is commercial paper quoted?

A

On a yield basis

27
Q

What are the 4 possible sources of income for a G.O. bond?

A
  1. Ad valorem taxes
  2. License fees
  3. Fines
  4. Asessments
28
Q

What 3 agencies rate commercial paper?

A
  1. Standard and Poor’s
  2. Fitch’s
  3. Moody
29
Q

What are the 3 classic examples of cyclical stocks?

A
  1. Homebuilding
  2. Automobile
  3. Durable goods

Practice Final Concepts (7 decks)

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