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