Section 2of 14 Flashcards
(29 cards)
What is NAV? And how often is it calculated?
the net asset value calculated at least once per day.
When a customer purchases a mutual fund, when will we know the price?
that evening typically
Discounts on mutual funds are only available to whom?
the broker dealer who has signed the selling agreement and is a member of FINRA/NASD
Suspended members can or cannot participate in discounts on mutual funds?
cannot
Can you give a discount to public customers?
no
Every transaction in an open ended investment company is what kind of transaction?
primary
What is forward pricing?
in mutual funds it is the sell price which is computed at least once per day in the evening typically.
if a customer redeems mutual fund shares what happens to the sales charge?
the broker/dealer must return the sales charge as agreed upon in the selling agreement.
If its a normal public offering the selling concession is returned to whom if the customer redeems shares within 7 days?
issuer / selling company
Can a b/d buy mutual funds for inventory with the intent to sell at a profit
no
What are open ended investment companies?
mutual funds
Open end investment companies are made directly with whom? And redeemed directly with whom?
the company / issuer
can a b/d buy mutual funds (open ended investment companies) for investments?
yes but he must buy and redeem directly with e company
Selling dividends is
illegal
A breakpoint violation is
failure to inform your customer of breakpoints
You cannot compensate a RR for selling a particular mutual fund. That is illegal. Te only exception is a RR that works for
a company that sells only proprietary products
You must disclose to the customer if you only sell what kind of mutual funds?
proprietary products
The maximum sale charge for mutual fund is what percent and of what price?
8.5 percent of pop
What is a valid reason for switching a mutual fund?
change in investment objectives or performance
A order of intent gives how many months to contribute to a mutual fund to receive the breakpoint. And how far back can your back date it?
13 months; 90 day back datr
The savings created by signing a letter of intent …what happens to it?
purchase additional shares held in Escrow until completion of the letter
Rights of accumulation can or cannot be used to complete a letter of intent?
cannot
The investment company act of 1940 established the 3 types of classification of investment companies
1) the face mat certificate 2)unit investment trusts, 3)management companies
Are REITS considered to be investment companies?
no
