Final #4 Flashcards
What are the primary functions of a financial adviser?
manages the fund within its stated objective, deciding which securities to buy into the portfolio; and which securities to sell from the portfolio
If interest rates rise, what puts a floor on the market for a bond?
The Put price
If interest rates fall, what puts a ceiling on the market for a bond?
The call price
Dividends and capital gains in a variable annuity account MUST:
be REINVESTED (tax deferred)
What licenses are required to sell wrap accounts?
Series 65 or 66. Must also be state registered
A prospectus MUST accompany what mailing to a customer?
A research report written by the firm about a mutual fund that the firm sells
In a competitive municipal underwriting, the first step taken by the syndicate when determining the bid is to
Write the scale
In an over-the-counter AGENCY trade, the member firm executing the order is a ________ and charges a _________.
Broker, commission
In an over-the-counter PRINCIPAL trade, the member firm executing the order is a ________ and charges a _________.
Dealer, mark up/mark down
In an over-the-counter principal transaction, the member firm sells a security out of its inventory to a customer who wishes to buy; or buys a security into its inventory from a customer who wishes to sell
Can revenue bonds be backed by types of taxes?
Yes, revenue bonds can be backed by any source of revenue other than ad-valorem taxes
What positions do you take when you create a collar?
Long a put, short a call. (protect against a falling market at minimal cost)
Failed auction of an auction rate security consists of what 2 things?
- Not enough buyers
2. Clearing rate below bid rate
What are the only two occasions in which equity in a margin account will rise or fall?
Equity will be affected only if the market value rises or falls - or if cash is paid into, or borrowed from, the account
If a syndicate member sells directly to the public, he earns….
the underwriter’s concession
Which is the definition of an “annuity unit”?
An accounting measure upon which the amount of pay out is determined
