unit 5

All of the following regarding a trust set up for the purpose of holding commercial property, or mortgages on commercial property, are true except... investors may never purchase shares in these trusts on an exchange or over-the-counter. ownership of these shares may provide for the receipt of dividends. gains can pass through to the owners of these shares. these investments could not be considered open or closed and funds.

investors may never purchase shares of these trusts on an exchange or over-the-counter. this is an REIT. REIT shares can trade on exchanges or over-the-counter. owners of these shares may receive dividend distributions and have capital gains pass through to them for tax purposes as well REITs, organized as trusts, are not investment companies open or closed and funds shares of REITs are equity securities.

which type of DPP would be most likely to enable the investor to claim a deduction for depletion? oil and gas exploratory program. oil and gas income program. real estate limited partnership. equipment leasing. ​

oil and gas income program. The depletion allowance is a tax benefit to compensate the program for the decreasing supply of oil or gas or any other natural resource or mineral after it is taken and sold. exploratory programs have low expectation of success there may not be any oil or gas being taken out of the ground. with income programs the wells have been drilled and they are already producing hence there is something being depleted.

which of these is not considered an advantage of owning an exchange-traded fund? liquidity. tax efficiency. pass through of losses. intraday pricing. ​

pass through of losses. ETFs are taxed using pipeline theory and do not pass losses through to investors. The others all consider advantages of the ETFs.

All of these are potential risks of private non-traded REITs except... liquidity. transparency. reliability evaluations. tax treatment.

tax treatment. non-traded REITs are taxed the same way as public traded REITs. there are concerns about the private REITs lack of liquidity transparency in operations and the difficulty invaluing the programs.

last year brown properties, LP distributed $200 per unit to investors and reported a $500 business loss per unit on the k1. for tax purposes the investors received...

a 500 per unit passive loss. income and losses in an LP are always treated as passive and are reported to the investor via k1 The tax results of the year are included in that document.

a r e i t that owns and operates an office building in the Dallas metroplex is an example of

an equity r e i t. a real estate investment trust that owns properties but does not hold mortgages is an equity REIT One that holds mortgages but not the property is a mortgage REIT One that does both is a hybrid REIT there's no such thing as a leasing REIT.

The securities act of 1933 exempts all the following securities from registration except... you as government issues. municipal issues. public real estate investment trusts savings and loan issues.

public real estate investment trusts REITs. though some REITs trade on exchange and others may not all public REITs are non-exempt securities which must be registered with the SEC.

which of these trading strategies are employed by hedge funds but are generally prohibited to mutual funds? the act of limiting investors to a narrow group of securities. The use of borrowed money to purchase portfolio securities. The act of taking long positions in speculative stocks. The act of taking short positions in NYSE listed stocks.

the use of borrowed money to purchase portfolio securities and the act of taking short positions in NYSE listed stocks. under most conditions, mutual funds are prohibited from purchasing securities on margin and from selling short. however both of those strategies are commonly employed by hedge funds.

All of the following are true of REITs except they are registered as investment companies. they can be registered under sub-chapter m. listed REITs are liquid investments. they can pass through gains but not losses. ​

they are registered as investment companies. REITs have many similarities to investment companies but are not classified as an investment company under the investment company act of 1940.

which of the following statements is true regarding exchange-traded notes? ETNs track performance to US Treasury notes. ETNs are junior, unsecured debt securities issued by a municipality. ETNs are backed up by good faith and good credit of the United States. ETNs are senior, unsecured debt securities issued by a bank or financial institution.

ATMs are senior unsecured debt securities issued by a bank or financial institution. they are backed only by good faith and credit of the issuer. The notes track the performance of a particular market index but do not represent ownership in a pool of securities the way share ownership of a fund does. ETNs are bond like with a stated maturity date but do not pay interest and offer no principal protection. ATM investors receive cash payments linked to the performance of the underlying index less management fees when the amateurs.