SERIES 65 CH.18

The account approval for an options account will include:

date the options disclosure document (ODD) is furnished to the customer; nature and types of transactions for which the account is approved (e.g., buying, covered writing, uncovered writing, spreading, and discretionary transactions); name of the agent assigned to the account; name of the supervisor approving the account; date of approval; and dates of veri cation of currency of account information.

The information that a CIP requires each customer to give before opening accounts includes:

- name, - date of birth, - permanent physical address (no mail receiving or incorporation services), - tax identi cation number (if a U.S. citizen, this is typically the Social Security number), - citizenship or visa details, and - nancial information about the client.

Multimember LLC file a form _______________ on ______________

1065 March 15

Partnership file a form _______________ on ______________

1065 March 15

S Corp file a form _______________ on ______________

1120 S March 15

Within ___________after a customer's account has been approved for options trading, the broker-dealer must obtain from the customer a written agreement that the customer is aware of and agrees to be bound by FINRA rules applicable to the trading of option contracts and that the customer has received a copy of the current ODD

15 days

all of these actions must be completed prior to customers entering their first option trade

Approval by a designated options supervisor delivery of those options disclosure document completion of the new account form

When it comes to transferability of ownership, the corporate form, especially ________ is the preferred choice

C corp

a company that expects to be very pro table should be a ____________ instead of ________________,_____________,or________ because in those three, all earnings pass to owners—nothing can be retained.

C corporation, partnership, an LLC, or an S corporation

______________ including LLCs survive the death of their owners

Corporations

C Corp file a form _______________ on ______________

Form 1120 April 15th/ 4th month 15th day after end of fiscal year

Mr. H sets up a revocable trust for the benefit of his adult daughter, Maddie. His wife may draw from it only if she needs to. Income on teh trust will be taxed to..

Mr. Hawkins the donor

If a person who is not named on an account is to have trading authority, the customer must file written authorization with the broker-dealer giving that person access to the account.

Power of attorney1

Tenants in Common (TIC)

Provides that a deceased tenant's fractional interest in the account is retained by that tenant's estate and is not passed to the surviving tenant(s), may be divided unequally

In order for an investment adviser to enter into an advisory contract with an investment company, the adviser must be _____________

SEC registered (federal covered)

Single member LLC file a form _______________ on ______________

Schedule C April 15

Sole Proprietorship file a form _______________ on ______________

Schedule C April 15

_________________does not avoid probate

TIC

When opening an options account and after reviewing information, the designated supervisory person shall specifcally approve or disapprove in WRITING the customer's account for options trading. (t/f)

TRUE

Benefits of structuring a business as a ________________,_____________,or________ would include no double taxation as is the case with a C corporation.

a general partnership, an LLC, or an S corporation

When does a customer have to receive the OCC options disclosure document?

before accepting the customer's first order to trade options covered by the ODD

When a large amount of capital is to be raised, choose a __________

c corp

A full or limited power may be made ___________ by the_______________of the power. It is designed to provide that a speci cally designated person maintains power over the account even upon the grantor's incapacitation, whether due to physical or mental cause

durable, grantor

In approving a customer's account for options trading, a broker-dealer, or agent associated with the broker-dealer, must exercise due diligence to ascertain the ____________, his ____________, and his ___________

essential facts relative to the customer financial situation investment objectives

A grantor retained annuity trust (GRAT) would only be able to reduce

estate and gift taxes

Executor of an estate , administrator of a trust, custodian of a UGMA account, IAT granted discretionary authority over the account are all examples of

fiduciaries

allows an individual who is not the owner of an account to: deposit or withdraw cash or securities; and/or make investment decisions for the account owner.

full power of attorney

One question asked on a new options account form that is not required on a normal brokerage account opening is _______________ and ______________

investment experience and knowledge

The business entities that have limited liability for owners as well as ow-through of income or loss are the_____________, ____________and ____________. The __________________has limited liability but no flow-through; the sole proprietorship and general partnership have flow-through but ___________________________

limited partnership, LLC, and S corporation C corporation unlimited liability.

allows an individual to have some, but not total, control over an account. e document speci es the level of access the person may exercise.

limited power of attorney

When opening an options account _________________that must be provided to any customer_____________ or ________the time such customer's account is approved for these specific transactions

options disclosure document, at or prior to

Joint tenants with right of survivorship (JTWROS)

ownership stipulates that a deceased tenant's interest in the account passes to the surviving tenant(s). Regardless of contributions, each account owner has an equal and undivided interest in the cash and securities in the account whenever you hear joint tenants, its talking about this term

______________ and _________________ are generally easier to form and dissolve than a ________________

partnerships and llc's , c corp

Only ____________ and ________ are taxed on their income

sole prop. C corp

the ______________________and ____________________ have flow-through but unlimited liability

sole proprietorship general partnership

The easiest business to set up, especially if you don't expect much liability, is the ___________________. However, because the business and the owner are inseparable, there is __________________ and no limits to the amount of the loss (if any) that may be claimed on the proprietor's tax return.

sole proprietorship unlimited liability

when comparing a private equity fund to a public one, it would be incorrect to state that the private fund has ____________

stronger governane