Series 6: Mastery Exam
If a customer requests to see the predispute arbitration agreement they have signed, a member firm must supply them with a copy within
10 business days of the request Virtually all new account forms contain a predispute arbitration clause that must be signed by customers before account opening. If requested by a customer to see it, a member firm must supply them with a copy within 10 business days
Under the intrastate offering rule (Rule 147), when may a resident purchaser of securities resell them to a nonresident?
At least six months after the date of purchase In an intrastate offering, a purchaser of the issue may not sell the securities to a resident of another state for at least six months from the date of purchase
A conservative customer is invested in a large-cap, value-managed equity fund. The stock market drops 10% due to a poor economic forecast for the country. Your customer is upset that his conservative mutual fund lost almost as much as the stock market. What risks does your customer need to understand? - Business risk - Market risk - Systematic risk - Nonsystematic risk
Market risk Systematic risk Both stocks and bonds involve some degree of market risk—the risk that investors may lose some of their principal due to price volatility in the overall market (also known as systematic risk).
An active portfolio manager may position the portfolio in stocks within a few market sectors, frequently trading in and out of the individual stocks, and subsequently, sectors. This type of management style can be suitable for certain investors. When explaining this strategy, you can help your investor see this as which of the following?
Sector rotation An active manager may change her sector focus to capitalize on relative performance of different sectors during different stages of the business cycle. This is known as sector rotation
Ezekiel, a 50-year-old investor, has entered your book of business through a transfer from another representative within your firm. According to Ezekiel's profile, he is approved for trading covered options. Getting to know him, you remind him he could profit from taking an income using calls. Because he is bullish on the market, which of the following would you recommend to accomplish your recommendation?
Selling covered calls There are two main strategies for trading call options. One will produce protection (a hedge) and the other strategy can produce income (selling). When selling calls, to minimize risk, make sure the call is covered by the corresponding underlying security. Details on covered call writing are part of the SIE
If an underwriter of a rights issue exercises any unexercised rights on the ex-rights date, this is an example of what type of issue?
Standby This is the definition of standby underwriting. It will also be important to know that in both firm commitment and standby commitment, the underwriter actually purchases the securities for resale. He is a principal in the deal. In a best efforts or all-or-none underwriting, the underwriter is acting as an agent. He does not have the financial liability of ownership. This topic is part of the SIE material
A customer wishes to buy a security providing periodic interest payments, safety of principal, and protection from purchasing power risk. The customer should purchase
TIPS Treasury Inflation Protection Securities (TIPS) offer inflation protection and safety of principal because they are backed by the U.S. government
During the cooling-off period, underwriters may not do which of the following? - Make offers to sell the securities - Take orders via the red herring - Take indications of interest - Publish a tombstone advertising
Take orders via the red herring Take indications of interest The preliminary prospectus, or red herring, can be used as a prospecting tool, allowing underwriters and selling group members to gauge investor interest and gather indications of interest. A tombstone ad is not an ad but an announcement. No offers or sales are allowed during the cooling-off perioD
When examining a new municipal bond fund that your firm just informed you it was adding to the list of approved offerings, you felt certain your list of suitable customers was very strong. After taking your first order of this fund and presenting the order ticket to your principal, she informed you to re-examine the conditions of suitability. Which condition would be most important to ensure suitability was paramount?
Tax bracket of the customer When an investor is in a high marginal tax bracket and seeking income, municipal bond funds may be appropriate, but it is the first consideration. A close secondary consideration is the type of account. Municipal bonds, which provide tax-free investment income, are not suitable for retirement accounts
A call to a referred contact presented the representative with a potential client of some size, financially speaking. The prospect informed the representative of the need for a prime account. In order to land them as a client, and in asking for the firm's help in establishing this relationship, the representative was informed of which of the following?
The client will be receiving trade confirmations only from the prime broker The only true statement here is that the customer receives trade confirmations and account statements from the prime broker, who facilitates the clearance and settlement of the securities transactions. The representative's firm is the prime broker, and while discretion may be allowed, it is certainly not required. This material is part of the SIE
A 65-year-old man called the branch manager to complain about a recent exchange of a deferred variable annuity proposed and performed by a new representative. The customer said he was unaware that there would be charges associated with the transaction and was shocked that the account value diminished substantially during a recent downturn in the market. The manager should do which of the following?
Interview the representative to ascertain whether firm procedures were followed with regard to suitability and disclosure of charges and risks associated with the exchange. Member firms may not recommend to customers the purchase or exchange of a deferred variable annuity unless the associated person has made proper disclosure of the features of variable products, including surrender charges, tax penalties, features of riders, and insurance components, as well as obtained a reasonable basis to believe the transaction is suitable (see FINRA Rule 2330). While the firm may insist on keeping a copy of all complaints, industry rules only apply to written complaints
Joe, a registered representative for ABC broker-dealer, read a great article in the local newspaper about investing in the stock market. He would like to make a copy of it to send to 10 prospects who he feels are suitable recipients. How will this be treated under FINRA rules regarding communications with the public?
Joe may send the article, subject to prior principal approval Joe is going to send an IPR, which requires prior principal approval. IPRs may be altered in a manor necessary to make it consistent with regulations or to correct factual errors. To qualify as an IPR, the publisher may not be an affiliate of the broker-dealer
Which of the following statements regarding a Section 529 plan is true?
A beneficiary of a Coverdell Education Savings Account may also be a beneficiary of a 529 plan There is nothing that limits someone from being the beneficiary of both a 529 plan and a Coverdell ESA. There are no income limitations on making contributions to a 529 plan. Finally, the donor does not have to be related to the beneficiary. Section 529 plans are covered in the SIE material
As part of a well-diversified portfolio, your client is examining a potential new investment. Currently, the portfolio contains five secured, corporate bonds that will be maturing in two weeks. The plans are to potentially purchase three unsecured bonds and to replace two secured bonds identified in the secondary market, all of which have a 6% coupon rate. If overall interest rates decline before the investor can purchase the new bonds in two weeks, he can expect the income from the new bonds to
remain at $60 per year Fluctuations in interest rates will affect a bond's market price but will not affect the bond's payable interest. The percentage interest payable for the issuer's use of the money is stated on the face of the bonds as 6% and is part of the bond indenture, a legal obligation on the part of the issuing company to pay 6% until the bonds mature, regardless of what interest rates do after the bonds are issued.
The provisions of Regulation T
require that payment be made two business days after settlement date Regulation T requires that payment be made within two business days of settlement date
A final prospectus must include all of the following except - whether the underwriter intends to stabilize the issue - disclosure of material information concerning the issuer's financial condition - a statement indicating that the SEC has approved the issue - the effective date of the registration
a statement indicating that the SEC has approved the issue If the underwriter intends to engage in activities designed to stabilize the security's market price, disclosure in the prospectus is required. The SEC disclaimer must appear on every prospectus and state that the SEC has neither approved nor disapproved the issue. The effective date must be printed on the final prospectus. Its purpose is full disclosure about the issuer and security being issued
Your client, working for a local municipality, tells you that they have the opportunity to participate in a Section 457 plan. Explaining some of the characteristics and features of this type of plan, you could tell your client all of the following except - earnings are taxable on an annual basis - they can be established by state and local governments and other tax-exempt employers - these are nonqualified plans - contributions to the plan for eligible employees are made through salary deferral
earnings are taxable on an annual basis A Section 457 plan is a nonqualified, salary-deferred contribution plan established by state and local governments and employers with tax-exempt status. Earnings grow on a tax-deferred basis, and contributions are not taxed until the assets are distributed from the plan to the employee
Mary wants to open a cash account with ABC broker-dealer. She does not have a Social Security number but has applied for one. According to the USA PATRIOT Act's customer identification program (CIP), all of the following are required when opening the account except - her date of birth - her applied-for Social Security number - her business street address in lieu of a residential address - her residential street address
her business street address in lieu of a residential address As part of its customer identification program, a broker-dealer must, before opening an account, obtain the following information at minimum: customer name; date of birth (for an individual); address, which must be a residential or business street address; and Social Security number for an individual or Tax ID number for a business entity. An exception is granted to persons who do not currently have—but who have applied for—a Social Security number. In this instance, the firm must obtain the number within a reasonable period, and the account card must be marked applied for
Your new client, Miguel, is eager to start investing. However, you still consider his retirement account too highly concentrated in equities. You explain to him that, in general, all of the following should be considered when positioning his investments except - value stream investing - diversification - current income needs - time horizon
value stream investing Diversification, time horizon, and current income needs are very much part of the suitability discussion. Using mutual funds in general, and more specifically, asset allocation funds and balanced funds, will add diversification. For individual equity portfolios, add some debt, and vice versa for bond portfolios. For domestic portfolios, add some foreign securities, and for bond portfolios, diversify by region/rating
A convertible preferred stock issue (par value $100) is selling at $125 and is convertible into five shares of common stock. The conversion price of the common stock is
$20 Par value divided by conversion price equals the number of shares into which the security is convertible. Never use the current market value. If par is $100 and it can be converted into five shares, the conversion price must be $20 ($100 ÷ 5 = $20)
Joan purchased $10,000 worth of ABC Growth Fund five years ago, and during that time, she received $1,200 in dividends, which she reinvested, and $2,000 in long-term capital gains, which were also reinvested. The value of the fund as of today is $14,000. If she were to liquidate 50% of the shares and using the average share price method her profit or loss for tax purposes is a
$400 profit Joan began with a cost basis for the account at $10,000, and added to that are the reinvested dividends ($1,200) and capital gains ($2,000). Therefore, her adjusted cost basis is $13,200. If the total value of the fund is $14,000, half (50%) is $7,000. Half of her cost is $6,600. So her reported tax liability would be $400 as a capital gain
While employed as a representative at ABC Brokerage, one of John's younger clients has just been awarded a cash prize for her part in creating a new financial app. When asked what her objective was for the prize money, she told John she wasn't sure, but in the short-term, she needed a bit more life insurance and some income-producing investments. Which of the following should John not recommend? - A variable annuity - Variable life insurance - A short-term government bond fund - Term life insurance
A variable annuity Variable life insurance For this client, a short-term time horizon necessitates a very liquid and accessible investment, such as a government bond fund. As for her life insurance needs, an annual renewable term policy would suffice. In no way should a variable life insurance policy be sold for short-term liquidity. As for income, a variable annuity carries either an expense to get in or to get out and should not be considered (in this case), as she would give up all control of the money through annuitization.
How often does a variable life insurance policy adjust the variable portion of the death?
Annually This adjustment, based on the separate account's performance versus AIR, is done annually for variable life policies
Which of the following orders would be reduced by the specialist (designated market maker) on the ex-dividend date? - Buy limit order - Sell stop order - Buy stop order - Sell limit order
Buy limit order Sell stop order When a stock goes ex-dividend, the specialist will reduce open buy limit orders and open sell stop orders (remember BLiSS) because they are placed below the current market price at the time they are entered and could be triggered when the market price is reduced for the loss of a declared dividend. The specialist will not reduce open sell limit orders and open buy stop orders. Order types are covered in the SIE material
Investors who purchase callable bonds face what types of investment risk? - Call risk - Reinvestment risk - Principal risk - Regulatory risk
Call risk Reinvestment risk Call risk is the risk that the bonds will be called, and the investor will lose the stream of income from the bond. Remember that bonds do not pay interest after they have been called. The call feature also causes reinvestment risk. If interest rates are down when the call takes place, what likelihood does the investor have of investing the principal received at a comparable rate of the bond that was called? Both call risk and reinvestment risk also apply to callable preferred stock
A customer has expressed interest in exchange-traded funds (ETFs) and wishes to discuss them with you. You could tell her all of the following except - ETFs have a NAV, calculated at the end of the trading day, that serves as the trading price until the next NAV is calculated - real-time quotes are available for ETFs - selling short and trading on margin are available transactions with ETFs - a share of an ETF represents an entire portfolio, or a specific selection, of securities
ETFs have a NAV, calculated at the end of the trading day, that serves as the trading price until the next NAV is calculated While a NAV can be calculated for an exchange-traded fund, the price is set by the market and changes throughout the trading day
At its annual compliance meeting (ACM), ABC Brokerage decided that an untapped marketing potential presented itself in the form of a targeted investment program for all individual customers with $50 million in total assets—a list of 120 customers. To implement the plan, a resource officer of the firm contacted a sample of 45 customers to answer a survey as to the least invasive and most impactful method to prove the program's worth. When asked by the CCO of the firm for the survey results, it was determined to be a winning plan and the go ahead was given. The next business day, the prospects were contacted about the plan. Which of the following were needed to be in compliance with FINRA?
If ABC believed no further use was to be made of the survey, it need not be approved prior to communicating the plan's first use As this communication was to customers with total assets of $50 million, they are considered institutional customers. Therefore, as long as the firm has no reason to believe otherwise, it need not be approved before first use
A bank customer, concerned about the low savings rate of a CD, stepped up to the teller window and asked about moving money from the soon-maturing CD into a money market mutual fund. Because of Rule 3160, which of the following is allowed?
The customer is instructed to follow the signs and see the representative located on the second floor In networking arrangements with a financial institution, the member must be clearly identified as the person providing broker-dealer services and must distinguish its broker-dealer services from the services of the financial institution, and to the extent practicable, maintain its broker-dealer services in a location physically separate from the routine retail deposit-taking activities of the financial institution. Unless the teller is dually associated with the bank and the member, the teller cannot be seen to solicit securities investments
FINRA Rule 2330, dealing with members' responsibilities regarding variable annuities, applies under which of the following circumstances? - The initial purchase of a deferred variable annuity - The initial purchase of an immediate variable annuity - The initial subaccount allocations - Subaccount reallocations
The initial purchase of a deferred variable annuity The initial subaccount allocations This rule applies to recommended purchases and exchanges of deferred (not immediate) variable annuities and recommended initial subaccount allocations. On the other hand, this rule does not apply to reallocations among subaccounts made or to funds paid after the initial purchase or exchange of a deferred variable annuity
Three years ago, a customer purchased 300 shares of ACE Fund. He sold the shares on August 15 for a loss of $400. If he then purchased 300 shares of ACE Fund on September 4 of the same year, how would he record the loss for tax purposes?
The loss is not deductible The customer repurchased the shares within 30 days of the loss transaction, so the loss is disallowed. A wash sale occurs when the same fund is purchased within 30 days before or after the date of sale at a loss.
A client of yours, Natalia, has been using dollar cost averaging to invest in the XYZ open-end management company family for 20 years and has an average cost of $21.40. During the last six months, she has refrained from making any more contributions into the fund due to poor health. According to her will, upon her death, the fund, which held 8,670.436 shares, passed into the possession and ownership of her 30-year old daughter. The fund carried, at the time of her passing, a NAV of $30.00 with an asking price of $31.50. Based on the facts stated, which of the following is true?
The new cost basis of the inheritance will be stepped up to the next computed NAV When it comes to mutual funds, the value at the date of death is the next computed redemption price (which would be NAV, not the $31.50 POP)
A customer in her 40s, with ample income to meet her needs, has unexpectedly received $250,000 and would like to invest it in mutual funds. She emphasizes that she is interested in long-term growth and is willing to accept moderate risk. She proposes to her registered representative that the investment be split among three funds: the XYZ Balanced Fund, whose portfolio includes stocks and bonds of many old and successful companies; the KPL Growth and Income Fund, which has shown excellent performance over the past several years; and the NYF International SmallCap Stock Fund, which she feels will provide diversification by investing in foreign companies. In discussing the customer's proposal, the registered representative must make which of the following points?
The proposal does not address the customer's objective: long-term, moderate-risk growth. Also, by splitting the investment among different fund families, she will probably pay higher sales charges The customer's proposal involves investing in comparatively high-risk—not moderate-risk—small-cap foreign stocks; in debt instruments, which do not provide growth; and in a balanced fund, whose objective is quite different from the customer's objective, which is long-term, moderate-risk growth
Jane was excited when you told her you were watching for an opportunity to acquire an equity position in a five-year old, publicly traded growth company you recently heard about, which recently released a report on a new analytical computer program it created to more accurately predict weather-related crop impacts. While insisting on patience, Jane told you to "get in now." Which of the following risks should Jane be made aware of?
Timing risk Jane must be made aware of timing risk. Timing risk can be defined as the potential to incur a loss as a result of buying or selling a particular security at an unfavorable time
Which of the following account types would best suit the holder if the account holder wanted to maintain the property but would ensure the account's avoidance of probate?
Transfer on death (TOD) A TOD account provides the benefits of control and passes the assets held in the account to a named recipient who is to receive the account upon the account holder's death. The account remains the holder's property during her lifetime and, unlike changes to a will, the names and percentage allocations to the beneficiaries may be changed with no legal documentation other than written notice to the broker-dealer
A client expresses the desire to invest in income securities that have minimal credit risk. Which of the following would be appropriate to recommend? - Treasury bills - Corporate intermediate term notes - Subordinated debentures - General obligation municipal bonds
Treasury bills General obligation municipal bonds Credit risk, also called financial risk or default risk, involves the danger of losing all or part of one's invested principal through an issuer's failure. Bonds backed by the federal government or municipalities tend to be very secure and have low credit risk. Generally, corporate securities would have more credit risk than government or municipal securities
You are the representative for three individuals who have a tenants in common account with your firm. If one individual dies, which of the following statements is true? - The account must be liquidated and the proceeds split evenly among the two survivors and the decedent's estate - The account is converted to joint tenants with right of survivorship - Trading is discontinued until the executor names a replacement for the deceased - Two survivors continue as cotenants with the decedent's estate
Two survivors continue as cotenants with the decedent's estate The decedent's estate becomes a tenants in common with the survivors.
While trying to plan for retirement, your client, who just celebrated their 70th birthday in June, stated they plan to start withdrawals from their IRA three years from now. Which of the following should your client be made aware of?
Waiting two-and-a-half years will mandate that an extra RMD be withdrawn before April 1 Your client will be 72 in two years, making an RMD mandatory for that year. Not starting until the year they turn73 ensures that two distributions must be made—one by April 1 and the other by December 31. Remember that there may be after tax contributions to an IRA account, though that is unusual. This information is from the SIE material
Which of the following insurance instruments do not offer inflation protection? - Whole life insurance - Variable life insurance - Fixed annuities - Variable annuities
Whole life insurance Fixed annuities Whole life insurance has a fixed death benefit whose value declines in real dollars with inflation. Fixed annuities offer fixed monthly retirement payments whose value in real dollars also declines with inflation. Variable contracts, with both insurance and annuities, are designed to offer inflation protection, in exchange for which the purchaser assumes investment risk
A new registered representative in your firm was excited to be placing orders in a very fast-paced office and, when filling out the fifth order of the day, inadvertently omitted the designation of the account. The principal, when placing the order, made sure to remind the new representative to call with the designation as soon as they got back to their desk. Was this a problem, and if so, why?
Yes, this was a problem because the principal placed the order without the account designation. Before any customer order is executed, the name or designation of the account (or accounts) for which such order is to be executed must be placed upon the order form or other similar record
Patsy's Party Supplies is based in Baton Rouge, Louisiana. The company has stores in the Baton Rouge and New Orleans metro areas. Patsy's would like to sell stock in a primary offering (worth $20 million) without registering the offer with the SEC. Patsy's may do this under any of the following offering types except - a Regulation D private placement - a Rule 147 intrastate offer - an S-1 form offer - a Regulation A offer
an S-1 form offer The S-1 form is the standard form used for nonexempt registrations of new issues. That is the form to file when registering with the SEC. Patsy's may use any of the other exemptions. They may file under Rule 147 because it is headquartered and all the stores are in one state. Regulation A offerings may be used for small offers like this one. With a private placement, they may sell primarily to accredited investors
FINRA has established rules designed to improve the objectivity of research reports and provide investors with more useful and reliable information when making investment decisions. To ensure the investing public receives objective information from the media and publications, the rule requires all of the following except - analysts must disclose in their research reports whether they have a financial interest in the subject security - an adviser or a broker-dealer may not base a recommendation on reports or analyses prepared by others, as long as these reports are represented as the adviser's or broker-dealer's own - analysts' compensation may not be tied to the firm's investment banking revenues - research reports must disclose whether, within the past 12 months, the firm has received fees for investment banking services from a public offering for a company that is the subject of a research report
an adviser or a broker-dealer may not base a recommendation on reports or analyses prepared by others, as long as these reports are represented as the adviser's or broker-dealer's own An adviser may base a recommendation on a third party's report, as long as the fact it is a third party's report is disclosed.
All of the following are true of a municipality wishing to raise money through a debt offering except - municipal securities are exempt from the filing requirements of the Securities Act of 1933 - an offering circular is submitted to the MSRB for approval - municipal bonds are considered second in safety of principal only to U.S. government securities - the announcement that is used to obtain an underwriter is referred to as a notice of sale
an offering circular is submitted to the MSRB for approval The MSRB does not approve the issue, nor does it receive the offering circular
A Regulation A exemption covers
an offering of $50 million or less in 12 months A Regulation A filing under the Securities Act of 1933 exempts the security from registration and limits offerings to $75 million or less within a 12-month period
All of the following statements regarding municipal bond official statements are true except - a customer must receive an official statement no later than the settlement date - all purchasers of a new municipal bond issue must receive a final official statement - the MSRB does not require the preparation of a final official statement for new municipal bond issues - an official statement must be delivered only upon customer request
an official statement must be delivered only upon customer request A final official statement must be delivered to all buyers of a new issue on or before the settlement date. The MSRB does not regulate issuers
Which of the following formulas determines a customer's net worth?
assets - liabilities An individual, like a business, has a financial balance sheet—a snapshot of her financial condition at a point in time. A customer's net worth is determined by subtracting liabilities from assets (assets - liabilities = net worth)
All of the following are terms for different types of underwritings except - standby - best efforts - closed end - firm commitment
closed end The term closed end refers to a type of management company defined in the Investment Company Act of 1940. A best efforts underwriting is when an underwriter will do its best to sell the entire new issue but will not guarantee success. In a firm commitment underwriting, the underwriter will guarantee to sell the entire issue or purchase unsold shares. A standby agreement applies when a corporation will try to sell the new issue itself through a rights offering but will have an underwriter standing by to purchase unused rights and use them to buy the unsold shares for resale to the public
In order for a customer complaint to have regulatory standing, it must be delivered
in writing A complaint must be delivered in writing, but there is no requirement that it be delivered in person or by certified mail. A verbal complaint does not have standing.
A prospect has primary investment objectives of current income and safety of principal. During the initial public offering of a closed-end government bond fund, an agent explains to the prospect that the fund invests in U.S. government-backed bonds, which keeps principal safe, and plans to make monthly distributions. Therefore, little could go wrong. Taken as a whole, this representation is
misleading because closed-end fund shares are subject to market pricing Though parts of the agent's presentation are factually accurate, overall, the statements are misleading because the value of the fund is subject to unpredictable change. Closed-end funds can—and often do—trade below their net asset value, thus subjecting the customer's principal to risk
Gary, a registered representative, would like to start a weekly blog on different topics of interest to investors with the purpose of attracting new business. The blog entries would require
prior principal approval and filing with FINRA This would be a retail communication and would require principal approval before use, and a copy will need to be filed with FINRA. Such filings are not with the SEC
Modern portfolio theory is an approach that attempts to quantify and control portfolio risk. It differs from traditional securities analysis in that it emphasizes determining the relationship between risk and reward in the total portfolio rather than analyzing specific securities. This is derived from the capital asset pricing model, which states that the pricing of a stock must take into account two types of risk. Those risks are - systematic - timing - nonsystematic - beta coefficient
systematic nonsystematic Both stocks and bonds involve some degree of market risk—the risk that investors may lose some of their principal due to price volatility in the overall market (also known as systematic risk). If the risk is seen as specific to only one company, that is known as business or nonmarket (nonsystematic) risk
An open-end investment company seeks to achieve maximum income with little or no pursuit of appreciation. The fund invests in preferred stocks of small- and medium-sized companies that are just below investment grade, as well as bonds rated from B to BBB. The fund's management believes that, despite the risks involved with the individual securities, adequate diversification can result in superior investment returns. This information would most likely be describing
the NavCo High Yield Fund Only the high yield fund fits the fund characteristics. The objective of the fund described is income that is derived from both preferred shares and debt. Because the portfolio's risk characteristics are such that a higher element of risk is present, higher yields would be expected
The tax theory that allows investment companies to avoid triple taxation on dividend distributions made to shareholders is called
the conduit theory The tax rule that allows for an investment company to avoid taxes on distribute amounts is called pipeline (or conduit) theory, not pipe. The others are mostly made up names that sound similar
When an option is trading, all of the following are fixed except - the strike price - the premium - the expiration date - the underlying security
the premium While the option is trading, the premium is variable—determined by supply and demand in the market. The other choices are characteristics of the option when issued
A mutual fund investor wants to know how closely your firm adheres to the industry's standardized breakpoint schedule and where he can find out more about breakpoints offered with the funds he is investing in. You tell him - FINRA's standard breakpoint schedule is available only to professionals. - there is no industry standard breakpoint schedule. - the breakpoint schedule for a mutual fund is given in full only in the SAI. - the complete breakpoint schedule for a fund is given in the prospectus.
there is no industry standard breakpoint schedule the complete breakpoint schedule for a fund is given in the prospectus FINRA does not have a standardized breakpoint schedule. Breakpoints vary from fund to fund but must be described in full in the prospectus, together with how an account is assessed for breakpoint purposes. The Statement of Additional Information contains more in-depth information than is normally found in the prospectus. Breakpoints are covered in the SIE
A fundamental analyst is concerned with all of the following except - trading volumes - historical earnings trends - capitalization - inflation rates
trading volumes A fundamental analyst is concerned with the economic climate, the inflation rate, how an industry is performing, a company's historical earnings trends, how it is capitalized, and its product lines, management, and balance sheet ratios. A technical analyst is concerned with trading volumes or market trends and prices