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private funds under section 3(c)(1) of the investment company Act of 1940 limits the number of investors to
100
3 business days
3rd party checks received by non-custody IAs must be forwarded to the 3rd party (USA only)
under the IA Act of 1940, unless delayed by the SEC, registration of an IA becomes effective how many days after filing
45 days..
the minimum loan amount that must be available in a variable life policy after 3 years is
75% of the cash value
the contribution limit has to be aggregated when participating in both
a 401(k) and a 403(b)
as defined in the investment company act of 1940, the term "investment company" includes
a face amount certificate company a management company a unit investment trust
what is guaranteed by a variable life policy
a minimum death benefit
under the exchange provision, within the first 24 months, a variable life policy may be converted into
a permanent form of life insurance policy
a broker-dealer is defined as
a person whose primary business is buying and selling securities for his own account and for the accounts of others
statements on annual renewable term life insurance has
an increasing premium, level face amount, with no cash value (the premium is based on the attained age, so it increases each year on the renewal date
in the USA, the term agent means
an individual (person is too broad) who represents the broker-dealer or issuers as they attempt to engage in securities transactions
how are universal life and variable life similar
as long as the policy has cash value, loans are permitted
things that a variable annuity and a mutual fund have in common
both offer voting privileges to their investors both compute their values on a daily basis both offer professional portfolio management
mutual funds class A,B,C shares
class A.. have a front-end sales charge and NO..or low 12b-1 fee.. these are used for a long time period class B.. have a declining contingent deferred sales charge and a high 12b-1 fee.. these convert to class A after 6-8 years class C.. have a level contingent deferred sales charge and a high 12b-1 fee.. these are meant for about a 1 year time period
with regard to investment advisers, the term ERA means
exempt reporting adviser
under the USA, investment advisers will generally be required by the administrator to
furnish any information the administrator finds necessary to the public interest.. promptly file a correcting amendment to any document with the administrator that has become inaccurate in any material respect.. renew all investment advisory contracts in writing
who can participate in keogh plans
individuals with income from self employment
18th birthday
latest date for a Coverdell ESA contribution
what is the most typical organizational structure of a private equity placement
limited partnership
180 days
mandatory waiting time to retest (3rd and subsequent failures)
9 months or 270 days
maximum maturity of exempt commercial paper
13 months
maximum time to complete a letter of intent
next business day
notification to administrator that IAs net worth is insufficient (send details the following business day)
calculations.. number of shares for conversion
par value / conversion price
the sharpe ratio is a measurement of a portfolios
risk adjusted return
calculations.. average market price
share price total / number of investments
48 hours prior contract
state IAs deliver initial brochure, 0r 5-day withdrawal without penalty
30th day
state registration or withdrawal of securities professionals effective
5 years
time keeping for investment adviser recordkeeping
3 years
time period for most records kept by the BD
an owner of an equity index annuity would be wise to use the high-water crediting method if the underlying index was expected to be
volatile with high-water the interest is calculated using the highest value of the index during the term
60th day
withdrawal of federal covered adviser on ADV-W
what are the 3 primary expenses involved with brokerage accounts that are NOT included in the fee disclosure template
-commissions -mark ups & mark downs -advisory fees for firms that are also registered IA's
specialist (DMM) vs. market maker
-specialist preforms his services on the floor of the exchange -prices are set by auction -market maker performs his on the OTC -prices are set by negotiation
time weighted return vs. dollar weighted return
-time is used to evaluate the performance of a portfolio manager -dollar used to evaluate the investors performance
what is a way that UITs differ from open-end investment companies
UITs have a termination date usually between 5-10 years
calculation.. sharpe ratio
actual return - RF / standard deviation
90 days (3 answers)
after end of fiscal year, IA must file annual updating amendment state IA with AUM at $110 million or above, must register with the SEC maximum time a letter of intent backdated
6 months
alternative valuation date for estate taxes
the return that will be earned over the life of a fixed annuity will
always be at least equal to the guaranteed minimum specified in the contract
an investment adviser renews its registration with the SEC by filing
an annual updating amendment.. within 90 days of their fiscal year
who would be considered an IAR under the USA
an executive who supervises an IAR.. senior supervisor who decides what investment advice should be given.. an employee who solicits clients for the firm.. manages accounts or portfolios for clients
120 days (2 answers)
annual delivery of adviser brochure to clients (if material changes) time limit for an IA who expects to reach the required AUM to register with the SEC
calculations.. current yield (stock)
annual dividend / current market price
calculation.. current yield (debt security)
annual interest / current market price
how often must an investment company file reports with the SEC as required by the investment company act of 1940
annually they are similar to other publicity registered entities in that an annual audited report must be filed with the SEC
what is an advantage of annuitization
annuities offer a guarantee of income that will last for a clients lifetime
statements on variable annuities
are both insurance and securities products must register with the state insurance department and the SEC must be delivered with a prospectus
what is included on the balance sheet
assets minus liabilities
under the USA when does registration become effective for an IA
at noon on the 30th day
who/what are specifically excluded from the definition as a "broker-dealer"
banks, issuers, and agents
calculations.. parity
bond market value / number of shares
similarities with UITs and open-end investment companies
both are federal covered securities, exempt from registration on the state level the NAV must be computed at least once daily, usually as of the close of the market
because of the changes made in the SECURE Act, minimum distributions from a traditional IRA must begin
by April 1st the year after the owner turns 72
the primary difference between an open-end and a closed-end investment company is
capitalization open-end has continuous offerings and closed-end is a set number traded in the secondary market
45 days
days after end of each quarter to file Form 13F
the face value in an insurance policy is the
death benefit
for securities professionals registered on the state level, renewal of registration takes place on
december 31 of that year..
credit risk is commonly referred to as
default risk
a broker-dealer having no place of business in a state is not required to be registered in that state if the BD
does no business in that state other than with institutional clients
a GRAT is a planning tool designed to pass assets to beneficeries in a way to minimize
estate taxes GRAT.. grantor retained annuity trust
what securities generally have the lowest expense ratio
exchange-traded funds variable annuity expense ratios are higher than mutual funds and the highest of all are hedge funds
the USA states that anyone who represents an issuer in effecting transactions between the underwriter and the issuer is
excluded from the definition of an agent
a living will is used to
express the authors end of life wishes
45th day
federal registration of BDs and IAs effective
the SEC Release IA-1092 added who to the potential list of IAs
financial planners.. pension consultants.. sports & entertainment representatives
advantages of investing in a REIT
flow-through of income limited investment risk limited management responsibility DONT flow-through losses
the security market line (SML) is the
graphical depiction of the capital asset pricing model (CAPM)
under the IA Act of 1940, the three-prong test used to determine if a person is an IA include
holding out as being in the business of giving advice.. being compensated for giving advice.. giving advice on securities
10 business days after first trade
investment advisers may use oral discretion
statements for REITs
must have at least 75% of their assets in real estate related activities must distribute at least 90% of net investment income to shareholders to qualify for special tax treatment must be organized as trusts
redeemable securities include
mutual funds, UITs, and variable annuities REITs are sold on the secondary market
who must redeem shares at the NAV
open-end companies and UITs
statements on mutual funds
open-end must have minimum 100k in assets to have a public offering mutual funds may be used as collateral in a margin account if they have been owned for more than 30 days mutual fund shares may NOT be purchased on margin b/c their shares are always public offerings of new shares open-end have a continuous offering and must be accompanied by a prospectus for open-end companies when redemptions exceed new purchases, the fund suffers from net redemptions
9 months after death
payment of estate taxes is due
5 business days
penalty free cancelation of IAs contract if brochure is not delivered at least 48 hours in advance (USA only)
as defined in SEC Release IA-1092, who is a pension consultant
person suggesting portfolio managers to administrators of employee benefit plans.. they might manage the assets or just provide suggestions of portfolio managers
a private equity funds are managed investment funds that
pool money and normally invest in private, non-publicly traded companies and business NOT liquid investments, meant for a long period of time
what are the two benefits to purchasing any mutual fund
professional management and diversification
if a state registered IA moves to another location, the administrator must be notified
promoptly
when computing a company's "quick ratio" what do you need
quick assets.. accounts receivable, marketable securities, and cash.. NOT inventory
15 days after account approval
receipt of options account agreement
what can an owner of a annuity that has been annuitized do
receive payments on a monthly basis until the time of death receive payments for life with a certain minimum period of time guaranteed have a joint life with last survivor clause with payments paid until the death of the last survivor
2 years
records must be kept easily accessible
what is the life insurance policy where the premium increases each time the policy is renewed while the face amount remains level is
renewable level term
what is included on the cash flow statement
salary, interest on savings, and income tax
investment companies must send financial reports to shareholders
semiannually
for a given amount of principal, what annuity option would produce the largest monthly income stream
straight life
who notifies the administrator when an agent begins or terminates a connection with a BD
the agent and the broker-dealer notify the administrator "promptly"
who safegaurds the securities held in a mutual funds portfolio
the custodian
what is the simplest way to approximate a reasonable price for a common stock
the dividend discount model
discounted cash flow method is used to find
the fair value of a security
what is a special characteristic of a universal life insurance policy
the policy may be overfunded
statements regarding UITs
they DONT have a board of directors their portfolios are NOT activity managed they DONT employ an investment adviser they DO issue redeemable securities
7 days
time limit for open-end investment company (mutual funds) to redeem shares
60 days (2 answers)
time limit to appeal an order under both state and federal law maximum termination clause with mutual fund adviser
30 days ( 3 answers)
time limit within which recession offer must be accepted or rejected mandatory waiting time to retest (first two failures) wash sale rule
calculation.. dollar cost averaging
total dollars invested / number of shares purchased
what is the prime difference between variable life insurance and straight whole life insurance
variable life insurance allows the policyowner to decide how the cash value is invested through a number of subaccounts
what are come advantages of ETFs
you can sell ETFs short or purchase them on margin ETFs tend to have higher tax efficiency over mutual funds they trade like stocks so settle in two business days
