MEMORIZE! Flashcards
(14 cards)
At least ____% of a Diversified funds assets must be regulated, it can have no more than ____% of its assets in one company, and no more than ____% of voting stock in any one company.
In contrast, a non-Diversified fund could have ____% of its assets invested in non-_____ securities and/or just _____
security(ies).
75%
5%
10%
100%
Regulated
1
What is the maximum sales charge per the Investment Company Act of 1940?
Per FINRA?
9% (clue: 9% = 1940)
8 1/2%
What are THREE criteria of a Money Market Fund?
What is the typical NAV of a Money Market fund?
Average maturity of 90 days or less
Minimal credit risk
95% of assets in top 2 ratings
$1
What are the 4 Acts and what do they regulate?
Securities Act of 1933
Regulates securities offered to the public.
Securities Exchange Act of 1934
This act established the Securities and Exchange Commission (SEC) and regulates the trading of securities after they have been issued.
Investment Company Act of 1940
This act regulates the organization of investment companies and the products they offer, including mutual funds.
Investment Advisers Act of 1940
This act regulates investment advisers.
What are some Leading Economic Indicators?
- Stock prices
- Housing starts
- Unemployment claims
- Consumer Prices
- Production
- Durable goods (appliances, cars, etc)
What are some Lagging Economic Indicators?
“I’m lagging after I eat at iHUP”
- Inventory
- Housing sales
- Unemployment rate
- Prime interest rate
What FOUR “persons” are NOT included in the definition of a Broker-Dealer?
Person with NO office in a state (pg 47)
Issuers
Banks
Agents (of Broker-Dealers)
Dealing in what securities can exempt someone from being considered an Agent?
PUBI
US, Muni, or Canadian Gov’t Securites
Bank securities
Promissory notes
Investment contracts
What are four exempt transactions?
Secondary Market
Qualified Purchasers
Private Placement
Transactions with organization employees IF NO Compensation is made
What are some exclusions from the IA definition?
IARs
BDs
Institutions
Investment Companies
Banks and Savings & Loan
LATE (if incidental to daily duties)
Publishers (general advice ONLY)
Federally Covered Advisors
Employee Benefit Plans (i.e. 401k)
What are some things exempt from being a security?
Fixed life insurance
Fixed annuity
Commodity futures
Real estate
Antiques and collectibles
Precious metals
LaCrap
What are some securities that MUST register with the SEC?
Those traded on a National Stock Exchange
Mutual Funds
Those sold to Qualified Investors
What are some EXEMPT Federally Covered securities?
US Government securities
Muni bonds IF offered outside the State
Private Placement securities
What are considered acceptable Advisory and Performance Based fees?
2% AUM (or less)
20% of Profits (or less)
