Glossary

Question 1

Accredited investor

Answer 1

Investor meeting certain net worth/income requirements

Question 2

Adjudicatory hearing

Answer 2

Hearing before administrator to determine if denial, suspension or revocation should be issued

Question 3

Administrator

Answer 3

Official or agency designated by governor or legislature to administer laws and rules of the state

Question 4

Agent

Answer 4

Individual other than broker-dealer representing a broker-dealer or issuer effecting transactions in securities

Question 5

Annuity

Answer 5

Contract that promises to make payments for specified time period

Question 6

Abritrage

Answer 6

Exploiting price differentials

Question 7

B-share

Answer 7

Share class with no front end load but imposing declining back end load

Question 8

Back-end load

Answer 8

Declining sales charge imposed on b shares when the investor sells

Question 9

Backing away

Answer 9

Violation in which market maker fails to honor published price

Question 10

Breakpoint

Answer 10

Quantity based discount offered on purchases of a-shares

Question 11

Breakpoint selling

Answer 11

Violation in which investor does not receive quantity based discount

Question 12

Broker-dealer

Answer 12

Person in business of effecting transactions in securities for others or own account

Question 13

Contumacy

Answer 13

Disregarding an administrators order

Question 14

Debenture

Answer 14

Bond secured by no specific collateral

Question 15

Deferred annuity

Answer 15

Investor funds contract but delays withdrawals

Question 16

Disgorgement

Answer 16

Order to return ill gotten profits

Question 17

Distributor

Answer 17

Sponsor/underwriter with financial interest in marketing and selling

Question 18

Effect

Answer 18

To complete

Question 19

Enjoin

Answer 19

To issue an injunction that restrains someone’s activities under threat of penalties

Question 20

Federal covered advisor

Answer 20

Advisor registered exclusively with the sec

Question 21

Federal covered security

Answer 21

Security not subject to states requirements for filing of advertising materials and registration

Question 22

General obligation

Answer 22

Muni bond

Question 23

Gnma

Answer 23

Direct obligation of U.S. government

Question 24

Grantor

Answer 24

Person who created and transfers assets to a trust

Question 25

Guarantee

Answer 25

Promise by someone other than issuer to pay interest, principal or dividends

Question 26

Hypothecation

Answer 26

Pledging securities

Question 27

Injunction

Answer 27

Court order to prevent person from committing further violations of securities law

Question 28

Insolvent

Answer 28

More liabilities than assets

Question 29

Investment advisor

Answer 29

Person who receives compensation for providing advice

Question 30

Investment advisor representative

Answer 30

Individual who represents investment advisory firm

Question 31

Issuer

Answer 31

Anyone who issued or proposed to issue any security

Question 32

Keogh plan

Answer 32

Qualified retirement plan for sole proprietors

Question 33

K-1

Answer 33

Tax form filed by owners of partnership and s-corp interests

Question 34

Market maker

Answer 34

Firm that supplies bid and ask prices

Question 35

National securities market improvement act

Answer 35

Separated federal covered securities and advisors from state

Question 36

Non-issuer transaction

Answer 36

Transaction between two investors

Question 37

Non-qualified variable annuity

Answer 37

Contract purchased with after tax dollars

Question 38

Non-recourse loan

Answer 38

Loan to partnership for which partners aren't personally liable

Question 39

OID

Answer 39

Original issue discount

Question 40

OSJ

Answer 40

Office of supervisory jurisdiction

Question 41

Painting the tape

Answer 41

Form of market manipulation

Question 42

Parity

Answer 42

Market price of convertible bond exactly equals market value of underlying shares

Question 43

Passive income

Answer 43

Not eligible for an Ira contribution

Question 44

Private placement

Answer 44

Unregistered securities sold through transaction exempt from securities act

Question 45

Recission

Answer 45

Act of rescinding previous transaction by which sells purchases securities sold in violation plus interest less income

Question 46

Tippee

Answer 46

Person who received insider information

Question 47

Unit investment trust

Answer 47

Investment company security distinct from w face amount certificate

Question 48

UGMA accounted

Answer 48

Established by adult for benefit of minor up states age of majority

Question 49

UTMA account

Answer 49

Established by adult for benefit of child who will have title to assets at age 25

Question 50

Uniform prudent investor act

Answer 50

Spells out fiduciary obligations for investment managers managing trust accounts

Question 51

Variable life insurance

Answer 51

Life insurance contract and security with cash value and death benefit tied to investment results

Question 52

Viatical settlement

Answer 52

Person buys another life insurance policy and cashed it when insured dies

Question 53

Wash sale rule

Answer 53

Requires investors who sell a security at capital loss to wait 39 days before and after sale to repurchase

Question 54

Withdrawal

Answer 54

Non punitive order to withdraw registration

Question 55

A-shares

Answer 55

Funds charging front end sales charge