Series 65 Brian Lee
IF you buy bond at discount
Current Yield, Yield to Maturity, & Yield to Call will all be higher than coupon rate
IF you buy bond at premium
Current Yield, Yield to Maturity, & Yield to Call will all be lower than coupon rate
(TQ) If customer wants above average return what do they need to do?
Customer need to be comfortable with risk
dealer
Dealer R I Principal (mark up)
range
Distance between highest and lowest #'s
Modern Portfolio Theory
Diversification through different asset classes in order to get MAX return
Dividend Discount Model
Divide the annual income by the required (expected) rate of return
zero coupon bond
Do NOT pay income (hold till maturity); these bonds are the MOST volatile
(TQ) Consent to Service of Process
Document that irrevocably appoints the administrator as a registered person's attorney for the service of legal papers. *Signed at time of application*
(TQ)Joint tenant in Common (JTIC)
Does NOT avoid probate; non-spouses, assets go to deceased estate and have to calculate % of ownership
current market price
Does NOT determine how much income bond receives
(TQ)Regulation T
FRB oversees extension of credit
Bonds with same maturity
If bonds have same maturity one with lowest coupon rate is more volatile
Statement of cash flow
inflow minus outflow inflow- salary, rental income, investment income outflow- taxes, utilities, mortgage payment, debt payment
(TQ) Surety Bond
insurance policy against theft and fraud
Municipal bonds/securities
interest on these bonds are federally EXEMPT; no fed taxes on income, no state income tax. ONLY suitable for HIGH tax bracket
Dollar cost averaging
invest same amount on regular basis
(TQ) Most important information in making suitable recommendation to a customer is
investment objective
buying bond at a discount
investors yield will be greater
(TQ) FED Covered Adviser Registration
More than 110 million AUM register with SEC ONLY (pay filing fees to state and must follow state anti fraud laws). *Private adviser, Foreign Adviser, Venture Capital do NOT register*
Tax Equivalent Yield/ Tax Free (corporation) Yield
Municipal yield ➗ 100% - tax bracket
(TQ) If a trust account has two named beneficiaries whose objectives does trust follow
Must follow STATED objectives of the trust
(TQ) State Covered IAR Registration
Must register if office in state or client is resident in state *Do NOT register if no office in state and no more than 5 clients in state*
Capital Gains
NEVER an exemption
(TQ) Guaranteed & approved
NEVER use these
Things not allowed in IRA
NO life insurance, municipal not appropriate,
Futures
NOT a security; an option contract for commodities. BUYERS are CONSUMERS of product; SELLERS PRODUCE and lock in price to sell
forwards
NOT a security; not standardized; not registered or regulated. Retail customers do NOT buy/sell this
(TQ) customer sells you a car and agrees on 12 equal payments. Is this allowed?
NOT allowed; this is borrowing from a client.
(TQ)Investment policy statement (IPS)
NOT required by law; *Security selection NOT in IPS*
Variable Universal Life
No guarantees FLEXIBLE premium
(TQ) Gift limits
No limit on amount of gift just anything after $15,000 you will be taxed.
(TQ) Soft Dollar Compensation
Non-financial compensation Allowed: *software, research, seminar fees*
457 plan
Non-qualified, deferred compensation plan established by state and local governments for tax-exempt government agencies and tax exempt employees.
(TQ) Sharing in profits/losses of customer account
Not allowed unless jointly owned family member
(TQ) B/D must register in state when:
Office in state or client who is resident
(TQ) Agency cross transactions
One customer wants to sell a stock and another wants to buy same stock; not allowed unless unsolicited and disclosed to both customers
Totten Trust/ Payment on Death (POD)
Owner still has access to assets while alive
(TQ) Which of the following best describes Buy & Hold?
PASSIVE management *DO NOT PICK STRATEGIC*
Current Yield
annual income divided by current market value (current price)
(TQ) Felony convictions
any felony CONVICTIONS in past ten years could be reason for denial of registration *HAS to be CONVICTION NOT arrest*
Wrap Fee
are a type of bundled fee and are specific to a particular investment product.
investment constraints
liquidity needs, time horizon, taxes, legal and regulatory factors, and unique needs and preferences
(TQ) Federally covered securities
listed on exchange, NASDAQ, investment company
Long term Bonds vs Short Term Bonds
long term are more volatile than short term
Strategic Management style
long term; asset allocation models, rebalance
yield curve
longer term bonds have higher yields than shorter term bonds
Buy & Hold management style
low expenses, tax efficient, passive investment style
systematic risk
market risk, interest rate risk, currency risk
tactical management style
market timing (current market coniditions)
Money Market
marketplace for trading securties; short term high quality debt instruments; very LIQUID, safe income. NOT INSURED. *Used to save for short term (less than a year)*
(TQ) Coverdell
max contribution is $2000 per CHILD
complex trust
may accumulate income; taxed only if distribution
duration
measure of volatility
Sharpe Ratio
measures the risk-adjusted return. A higher ____ indicates that, based on the risk taken, the investor's return is better than expected.
(TQ) Notice Filing
method for paying filing fees for federally covered securities i.e., Exchange-listed, NASDAQ, Investment Companies
median
middle
Variable life
minimum guaranteed death; investment not guaranteed FIXED PREMIUM
(TQ) Customer looking to save for down payment on house
money market mutual fund
liabilities
mortgages, consumer debt (credit cards), car loan
(TQ) Coordination
most common; coordinating state & federal registration; becomes EFFECTIVE when CLEARED by SEC. *For ALL regular IPOs*
Health Savings Account (HSA)
must be covered under a qualifying high deductible health plan on the first day of the month. No longer have health coverage except what is permitted by IRS.
Securites
must be listed on an exchange; if not listed it is traded on OTC
record date
must be share holder on or before to receive dividend
simple trust
must distribute income annually; taxed annually
Variable Annuity
no guaranteed return; investments grow tax deferred; penalty for withdrawal before age 59 1/2 is 10%. Have investment risk but no inflation risk
seller of put
obligation to buy
mode
occurs most often
Testamentary Trust
only created when client dies; based on clients will If client dies with this will you contact executor or administrator
(TQ) Market makers
only go with unlisted OTC stocks
Derivatives
options, futures, forwards
S Corp & General Partnership
pass through taxes & profits to its owners *Business entity is NOT taxed*
Limited partnerships
passive investment; highly *illiquid* and are not freely transferrable. *primary benefit is viability (profitability) of business, SECOND is tax benefits*
preferred stock
pays fixed income & interest rate sensitive
Settlor/grantor
person who provides assets to trust
(TQ) Investment Advisers
persons in the business of giving investment advice
remaindermen
the heirs of beneficiaries (usually grandchildren of trust owner)
Interest rate
the risk for bonds
Unit Investment Trust (UIT)
A type of investment company where investments are selected, not traded/managed. Issue new shares which give prospectus. Lawed under Securities Act of 1933; *bought at NAV plus sales charge*
(TQ) What is the limit under UGMA that Jane Doe can give to Susan Doe her daughter?
A) $15,000 b) $ 1 million C)$100,000 D) No limit Answer is D no limit
(TQ) At what age can we reregister the account in Susie's name for a UGMA
A) 18 B) 21 C) 25 D) Age of Majority Answer D age of majority
(TQ) If tax exempt business asks for advice on what type of retirement plan to set up which would be most appropriate?
A) 401k B) 403b C) 457 D) HR-10 Answer is B 403B (non profit organization)
(TQ) What plan would you recommend to a city firemen?
A) 401k B)403b C)457 D) HR-10 Answer is C 457 (government employee)
(TQ) We have a 57 year old husband who wants to retire at 62, and a wife who is 58 and wants to retire at 65. What is their time horizon?
A) 7 years B) 8 years C) 10 years D) 20 years Answer is D 20 years; time horizon=life expectancy
(TQ) Which of the following best describes a market maker?
A) B/D who buy/sells listed securities B) Underwriter C) B/D who buy/sells unlisted securities on OTC D) NASDAQ subscriber Answer is C; market maker= unlisted OTC
(TQ) What can you invest or put into a Traditional IRA
A) Life insurance B) Art C) Municipal Bond D) Gold coins by US Treasury Answer is D
(TQ) XYZ advisers has 160 million AUM, a home office in state A, has 32 clients in State B, and holds a seminar in State C. Regarding registration which is true?
A) Register with State A only B) Register with State A&B C) Register with States A,B,C D) None Answer is D None; has over 110 million AUM, register with SEC not the state
(TQ) Grandpa wants to leave assets to his grandson but wants access to the assets while alive, what do you do?
A) UGMA B) UTMA C) Totten Trust D)Nothing Answer is C Totten Trust
(TQ) According to USA all of the following are securities except
A) Whiskey warehouse receipt B) Variable annuity C) Investment contract D) Gold Answer D Gold; gold is a commodity
(TQ) Are employees talking to other employees still liable for inside trading?
A) Yes B)No Answer is yes; supposed to have Chinese wall
(TQ) Which of these would have to register with the state as an agent?
A) accepts order from customer for corn future contract B) contact customer to update account info C) sends customer paper work for signature D) places order for customer to purchase an exempt security Answer is D
(TQ) The president of a company wants to expand operations and issue stock to public and accepts orders from interested investors, the president would be required to register as?
A) agent of issuer B) agent of B/D C) Agent of B/D & Issuer D) Not an agent Answer is A
(TQ) Which of the following portfolios is most diversified?
A) domestic & international B) govt bonds & municipal bonds C) blue chip & large cap (same thing) D) Convertible bonds & corporate bonds answer is A
(TQ) USA Forms
ALL USA FORMS ARE 30 DAYS
(TQ) Form ADV Part 2
ALL advisers have to give client a brochure, this can be used as a brochure. State adviser requires brochure 48 hours prior to effective date of contract. client gets 5 day free look period
(TQ) UGMA vs UTMA
ALL gifts in both are irrevocable; in UTMA beneficiary can wait till 25 or age of majority to take over account.
Risk for bonds
ALL have reinvestment risk and interest rate risk
(TQ) Retirement plans
ALL taxed as ordinary income
(TQ) Future contracts
ARE NOT SECURITIES
(TQ)Joint ownership with rights of survival (JTWROS)
AVOIDS PROBATE; typical with spouses, when one passes the other gets the assets
Average price calculation
Add up all the prices of the stock divide by the amount of months you paid. Example: Month 1 $5 Month 2 $4.50; $5+$4.50=$9.50; $9.50➗ 2=$4.75 ANSWER
(TQ) Subpoena
Admin has power in all states to do this, "compels someone to testify"
Needs analysis
What customer needs for insurance are
(TQ) Qualified Domestic Relations Order (QDRO)
When you get divorced and have to separate qualified retirement plans. Still TAXABLE distribution but NO withdrawal penalty
(TQ) IAR Withdrawal
If IAR withdraws from an IA they NEVER contact SEC; If FED IAR contacts ADMIN If state IA contacts ADMIN
(TQ) What constitutes custody of customer account
ability to deduct adviser fee
mean
add up all the #'s and divide by the # of #'s
purchasing power risk
aka inflation risk
Efficient market hypothesis
all known info about stock is already reflected in price
strong form efficiency
all public and private info is known
(TQ)Agents
an individual who accepts/ places orders for a security. work for B/D
(TQ) 529 Plans
college saving plan, *Donor retains control of assets*, tax free for education
(TQ) Not securities
commodities, future contracts, fixed insurance, retirement plans
Investment Objective of "Growth":
common stock (more risk)
(TQ) B/D do not have to register with state when
do not have a office or client is not resident of state if its institutions or issuers
Growth stock
earnings and earnings momentum lead to high P/E; low or NO dividends
Index Annuity
earnings rate based on stock market index; Same thing as EQUITY BASED
(TQ) Form ADV
effective in 45 days, withdrawal is 60
(TQ)Broker-Dealer
effects security transactions for benefits of themselves or others
(TQ) Insider trading act of 1986
everyone held liable for insider trading (Tipper and Tippee of info)
Whole life
everything guaranteed (cash, death benefit) FIXED PREMIUM
(TQ) Compensation for IA
fees, commissions (can receive both) and has to be disclosed, can discount fees for different clients. Can NOT be performanced based unless client has 1 million net worth and 2.1 million AUM
(TQ) market order
filled immediately at whatever current price is
(TQ) SEC release IA 1092
financial planners, sport/entertainment agents, pension consultants ALL have to register as IA
bottom up method
first look at company then industry then economic factors
top down method
first look at economic factors, then industry, then company
(TQ) Gift tax
for gifts greater than $15,000; paid by donor (giver)
Class A Shares
front-end sales load
(TQ) Inherited Shares
get step up and capital gains are calculated on price of stock at time of death
Investment objective of "safety of principal":
government securities, money markets
ERISA (Employee Retirement Income Security Act of 1974)
governs private sector (corporations); must have minimum of 3 investment selections
writer (seller) of call
have obligation to sell at specified price
buyer of call
have right to buy stock at specified price & time
correlation
how two different investments react at the same time
(TQ) Agent Withdrawal
if agents withdraws from B/D (Form U-5) agent & B/D most notify admin, if going to new B/D they must also notify.
bond ratings
if it starts with letter B has to have three letters to be investment grade; if it starts with B and has 2 it is junk bond
(TQ) Successor firm
if one firm acquires another firm; has to refile application does NOT have to pay filing fee
(TQ) Gifted shares
if shares are ___ before death capital gains are calculated on original purchase price; better for beneficiaries to inherit after death
(TQ) Qualification
if there is no SEC registration and its registered intrastate (in one state); becomes effective when cleared by ADMIN
(TQ) Agents must register with state when
if they work with B/D and accept orders for securities (Form U-4) Non- exempt issuers (companies, Form U-10)
Sell options for
income
Value stock
stable earnings, low P/E and higher dividend payout
Civil Penalties
sued by government; 1 million or 3 times profit made
Traditional IRA
tax deferred (taxes paid when money is taken out), deductible, 10% for early withdrawal before 59 1/2, Required minimum distribution (RMD) after 70 1/2
Roth IRA
tax free, non deductible, 10% penalty for early withdrawal, No RMD, can contribute after 70 1/2 with earned income
Quick Ratio (Acid Test)
(Current Assets - Inventories) / Current Liabilities
alpha
(actual return − risk-free rate) - (beta × [market return − risk-freerate])
Registration of Securities
*EXEMPT:* U. S. Govt's. Muni's Bank/Insurance Co. Non-Profit/Religious Common Carriers (Trucking Co., Railroads, etc.) Canadian Gov't (Fed and all subdivisions) Foreign Govt's. (Fed only) Commercial Paper *NONEXEMPT* Must be registered - illegal to sell an unregistered, non-exempt security, EXCEPT: EXEMPT TRANSACTION: ▪ Unsolicited ▪ Financial Inst. ▪ Issuer/UW ▪ Private Placements ▪ Fiduciaries
FEDERALLY COVERED ADVISER
*REGISTER WITH SEC ONLY NOT STATE!!!!*
prepayment fees
*U.S.A.*- $500 paid in 6 months or more in advance *Investment adviser act*- 1200$ paid in 6 months more in advance
Structured Products
- ELN - equity linked note - A debt instrument (interest rate sensitive) in which principal is linked to a stock index. May not be appropriate for income investors.
(TQ) Customer has large capital gain in XYZ and fears a correction. What order would you place?
1) customer owns stock so sell 2)Fears correction so down 3)Look at SloBS vs BLiSS; SL BS Fears correction so below CMV ------CMV------- Wants to sell so only option below BL SS CMV with sell is SS Answer is Sell Stop
(TQ) Incident occurs on 3/1/11 and no discovered until 2/1/12. When would the statute of limitations run out for clients ability to sue?
2/1/14 Occurs first (two years from discovery)
(TQ) 20 day cooling off period
20 day period where your prohibited from soliciting securities after registration with SEC. If you don't hear from SEC within 20 days you have been cleared.
(TQ) Criminal penalties
3 years or 5,000$
(TQ) B/D books/record keeping
3/2
(TQ) IA books/record keeping
5/2 up to the fiscal year *If IA goes out of business keep records for 3 years*
(TQ) Customer has equity based annuity with 80% participation rate. Index goes up 10% what is their profit
80% ➗ 10%= 8%
Tax exempt company/organization
=non profit or religious organization
Exempt Transactions
A client calling to purchase stock is an unsolicited transaction, probably the most common of the exempt transactions. Any sale to an institutional client is an exempt transaction, whereas those to individuals, unless unsolicited, generally are not.
Equity Linked Notes (ELNs)
A debt instrument (interest rate sensitive) in which principal is linked to a stock index. May not be appropriate for income investors
beta
A measure of a stock's volatility compared to changes in the overall stock market.
403 B
A retirement savings plan offered by a non-profit organizations (teachers)
Broker
Agency Broker Commission
(TQ) If you are accepting or planning orders for security transactions you HAVE to register as a
Agent
(TQ) Expiration of registration
Agents/IARs registration expires every Dec 31st; registration becomes effective noon of the 30th day of application
indication of interest (I.O.I)
An investor's expression of conditional interest in buying an upcoming securities issue after the investor has reviewed a preliminary prospectus. An indication of interest is not a commitment to buy.
(TQ) Security misdemeanor
Any security misdemeanor in past ten years can be reason for denial
Registration procedures (Agents & IARs)
Application (U4) expires every Dec 31st Fingerprints Filing fees pass test Cleared by Admin; effective noon of 30th day of application
Non exempt issuers
Are companies
balance sheets
Assets= liabilities + shareholders equity
(TQ) B/D vs IA
B/D paid through transactions, IA can be paid for advice (paid on AUM)
(TQ) Not Fiduciaries
B/D, agent, bank, IAR
Class B Shares
Back-end load, contingent deferred sales charge (reduces over time)
(TQ) Which type of Real Estate can you put into an IRA
Business property ONLY
Administrator CAN'T
Cancel registration; it occurs when a registrant no longer exists, ceases to do business, is declared mentally incompetent, or cannot be located.
(TQ) Alimony
Considered Adjusted Gross Income (AGI); Child Support is NOT
Immaterial vs Material
Failure to disclose an *immaterial* fact is acceptable. Failure to disclose a *material* fact is fraudulent.
(TQ) Customer is wondering if the current insurance they have is enough. As an IAR what should you do
Fill out needs analysis
Yankee Bonds
Foreign issued bonds to raise capital but paid in US dollars
General partnership
Full liability; owner puts taxes on w-2; 4th easiest to form
If investor buys bond at discount what does this do to their income
Has NO EFFECT on income, income is FIXED
Sole Proprietorship
Has full liability; owner puts taxes on W-2 and is easiest to form
LLC
Has limited liability; owner puts taxes on w2; 2nd easiest to form
(TQ) Borrowing from clients
Has to be normal (B/D or Bank) lending institution
Access Person
IA supervised person who: 1) has access to nonpublic information regarding clients' purchase and sale of securities 2) is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic
(TQ) Fiduciary responsibility
IA's ____ ____ is with the customer
Stop order
If/then; if the market does something then i want to buy/sell. 1) does customer currently own the stock/ do they want to own the stock (buy/sell) 2) Customers market attitude (do they want market to go up or down) 3)SL BS (SloBS over BLiSS) ------CMV------ BL SS
(TQ) Grandma has 1000 shares at $5 a share, when she dies shares are worth $347,000 a share. You sell at $359,000 a share. What is your capital gain?
Inherited stocks get step up; $359,000-$347,000= $12,000 capital gains
(TQ) Are Fiduciaries
Invest Adviser ONLY
Pooled investments (investment companies)
Issue new shares which give prospectus. Lawed under Securities Act of 1933; *bought at NAV plus sales charge*
Open-end management companies (mutual funds)
Issue new shares which give prospectus. Lawed under Securities Act of 1933; *bought at NAV plus sales charge* Vanguard example of this
Closed-end management company
Issue shares once to public in IPO with prospectus; traded in secondary market where price is determined by supply and demand. *IF market price is higher or lower than NAV it is close end fund*
(TQ) Excluded from IA Definition
L- Lawyers A- Accountant T- Teachers E- Engineers
(TQ) State Registration
Less than 100 million AUM. Register if office in state or client resident of state. *Do NOT register if no office & no more than 5 clients in the state*
Class C Shares
Level load, flat annual fee (12b-1)
C corp
Limited liability; business does taxes; hardest to form; Can be taxed twice if gives dividends (easiest to liquify)
S Corp
Limited liability; owner puts taxes on w-2; 3rd easiest to form
Buy options for
Protection
(TQ) Summary plan
REQUIRED BY LAW
(TQ) Registration Fed vs State
Register with either Fed or State NEVER both, if FED still pay filing fees to state & MUST follow anti fraud laws
(TQ) If FED drops below 90 million due to market conditions who do they register with?
Register with state
(TQ)Federally Covered IAR Registration
Register with state administrator in state with office *Do NOT register if no office in state*
Noncyclical (Defensive)
Relating to a company or sector with operating results that tend to remain steady regardless of economic or business conditions. *Defensive same thing*
Securities Act of 1933
Requires all securities to register with the SEC
Cap M (Capital Asset Pricing Model)
Risk vs Return; for greater return you need greater risk
(TQ) UIT is regulated by what
Securities Act of 1933
(TQ) Farmer concerned with price of wheat, as an IAR what would you recommend?
Sell Future to lock in his price for him to sell his wheat
(TQ) Sally is long 100 shares of XYZ at $50 a share. She fears near term correction but is overall bullish. As an IAR which would you recommend to generate INCOME?
Sell call
(TQ) Limit order
Specify a price to buy/sell
(TQ) Brochures
State must send annually if there is material changes or it is requested. FED must resend every 120 days of fiscal year
Diversification
Stocks that have negative correlation & BIGGEST negative correlation coefficient are the most diverse.
Average cost calculation (cost of investing)
Take the price of each stock from each month and divide by the amount you are investing each time. Add these up and divide by the total amount you have invested. Example Month 1 invest $100 Month 2 $100 Month 3 $100; Price for month 1 $10.00 Month 2 $5.00 Month 3 $7.50 100➗ 10 + 100 ➗ 5 + 100 ➗ 7.50= 43.333 43.3333➗ 300= $6.92 ANSWER
Brady Bonds
U.S. issued foreign debt
(TQ) Exemptions from registration
US Government, municipal bonds, banks, insurance, non-profit, ALL CANADIAN, only federal from foreign government, commercial paper
Coupon/Nominal rate
The interest the investor receives for lending money to corporation. Tells us how much income is received
standard deviation
The measure of a portfolio's volatility
Internal rate or return (IRR)
The point at which the net present value of an investment equals zero. *Takes into consideration the time value of money* Expected return (*YTM for BONDS*)
(TQ) What authority do state administrators have over FED advisers
They have ability to enforce antifraud provision
(TQ) Buy and hold is least appropriate for what account
Wrap account
(TQ) Hedge Funds
are performance based
Net Asset Value (NAV)
assets - liabilities ➗ shares outstanding calculated once per day at end of day
balance sheet (client)
assets - liabilities= Net worth
(TQ) Officers, directors & partners
automatically register as IAR
(TQ) Deferred Contribution Plan
based on how much you put in, benefits younger employees
(TQ) civil penalties
being sued; 3 years from occurrence, 2 years from discovery. Whichever occurs first
(TQ) Specialists/designated market makers (DMM)
bring buyers and sellers together; ONLY with listed stocks on exchange
unsystematic risk
business risk, regulatory risk, political risk
preliminary prospectus (red herring) & tombstone ad
can be sent out during 20 day cooling off period to see if customers are interested in security. Neither B/D or customer are committed
(TQ) Estate taxes
can be valued at time of death or wait 6 months; have to be paid within 9 months
(TQ) No assignment clause
can't assign clients to new IA without consent. If partnership changes must notify client, if majority changes client must give consent.
(TQ) Rights of Rescission
choice of all original principal plus interest plus covered court costs (dividends not included) Or keep stock. *30 days to choose, once chosen client can no longer sue*
Investment objective of 'income':
corporate bonds, reits, preferred stock
current ratios
current assets divided by current liabilities
Money Market Securities
debt instruments or securities with maturities of one year or less; cash & cash equivalent mean same thing
Ask
price customer buys at (HIGHER)
Bid
price specialists buys at (LOWER)
semi-strong form efficiency
price/volume and financials (public information)
weak form efficiency
price/volume only information
(TQ) money purchase plan
profit sharing plan, mandatory for employer to contribute, not for employee
Assets
properties (primary resident or investment), investments (stocks), retirement, cash, jewelry
Investment Advisers Act of 1940
regulates FED advisers, covers all advisers with laws and regulations
Securities act of 1933
regulates primary or new issue of shares; (1st law regulates first market). Sometimes referred to as Full & Fair disclosure Act, New Issues Act, and Prospectus Act
Securities Exchange Act of 1934
regulates trading in the secondary market (2nd law regulates 2nd market)
(TQ) Defined benefit plan
retirement based on % of salary of last 3 years, benefits older employees
Yield
return on investment
buyer of put
right to sell at specified price
Treasury Inflation-Protected Securities (TIPS)
security that is adjusted based on CPI (consumer price index(inflation)). Adjusted semiannually; principal adjusted also
Efficient Frontier
set of optimal or efficient portfolios
living trust
set up while client is living (even in coma)
(TQ) Agents do not have to register in state when
they are a sales assistant or intern exempt issuer
Exchange Traded Fund (ETF)
track an index (don't have to have management); Have low expenses, fees & taxes; PASSIVE management. *Bought at market price*
Tax form 1041
trust accounts use this tax form
Per Stirpes
when heirs split original allocation
negative correlation
when one stock goes up the other goes down