A A diversified fund is one which has: 75% or more of its assets invested in securities; a maximum of 5% of its assets invested in any one issuer; and a maximum holding of 10% of the voting securities in any one issuer. $46.92 Multiple select question. These 3 funds all have different sponsors. only redeems its shares at stated intervalsC. Which statement is TRUE regarding a Step-Down Certificate of Deposit? They are insured by the Federal Deposit Insurance Corporation. At the end of the current year, Accounts Receivable has a balance of $3,460,000, Allowance for Doubtful Accounts has a debit balance of$12,500, and sales for the year total $46,300,000. An inverse ETF based on the price movements of 20+ year Treasuries would have the largest profit when interest rates rise. Which statements are TRUE regarding a Roth IRA? Both Treasury bonds and Treasury notes are Issued with maturities ranging from 10 to 30 years. Which statements is/are TRUE regarding closed end investment companies? Note that most funds process redemptions much more quickly than this. Hedge funds started in the 1990s and the managers produced superior returns and were able to charge high fees. Which of the following statements are TRUE regarding the Federal tax treatment of a regulated mutual fund investing solely in municipal securities? on a typical Wednesday. A Well, you can get this one down to 50/50 pretty quickly. II and III only. $10,500. The customer is purchasing enough ($35,000) to qualify for a 6 % sales charge. The customer pays the offering price of $9.59 per share x 200 shares = $1,918.00. I, II, III only The national average interest rate for savings accounts under. III based on the Standard and Poor's 100 Index C IV Hedge fund managers can only be compensated based on a percentage of assets under management I, II and IV D They are directly accessible to individual investors. Because of this, the customer must deposit new money in the dollar amount required by the LOI to get the lowered sales charge. real estate tax refunds The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n): Industry performance Was this answer helpful? A customer who buys will pay the current market price plus a commission. I and III onlyD. These are markets for thinly traded illiquid securities. 12b-1 plans allow a mutual fund to charge, as an expense to the existing shareholders, the cost of advertising and soliciting for new customers. in the Dow Jones Industrial AverageC. At the end of 13 months, the NAV is $20,000. A there is a commission cost when buying an exchange traded fund share whereas there is no commission cost when buying a mutual fund shareD. It pays a fixed stream of income without a contractual obligation to make the payments. open-end fund has a different capital structure than a closed-end fundD. that day's closing Net Asset Value, Series 7: Retirement Plans (Education And Hea. They invest in commercial paper, CDs and repurchase agreements b. On this date, the Funds shares are reduced by the value of the distribution. >$10,000 - $20,000 7 % All dividends, interest and capital gains are tax deferred, A customer buys a variable annuity and elects a payout option of Life Income with a 20 year period certain. A 200% Leveraged Dow Jones Industrial Average Index ETF would be expected to move: I up 50% in price when the DJIA moves up 100%II up 100% in price when the DJIA moves up 50%III down 50% in price when the DJIA moves down 100%IV down 100% in price when the DJIA moves down 50%, A leveraged ETF uses borrowing (margin) and options to magnify price movement as compared to the reference index. The customer will pay $10.075 per share (rounded). The investor can choose to buy the same fund either as a Class A, B, C, or D share. I and II only D Which of the following statements about money market mutual funds is true? This contrasts to a closed end fund, where the fund is traded in the market like any other stock. The most important factor to consider when selecting a mutual fund is: A. investment objectiveB. A. Specify a transaction price. Net Asset Value 20 years to the annuitant or beneficiary, All of the following sources of REIT income are counted towards the 75% test required by Subchapter M EXCEPT: Under FINRA rules, all of the following statements are true EXCEPT: A. the wholesaler must be a registered FINRA memberB. Which statements are TRUE regarding hedge funds? $90 per shareD. He or she could elect to have a fixed number of shares liquidated each month (Choice A); could elect to have the account liquidated over a specified period of time (for college education) (Choice B); could elect to have a fixed percentage of the portfolio liquidated each month (Choice C); or could elect to have enough shares liquidated so that a specific dollar amount is received each month (Choice D). $11.85 Management companies are subclassified as either: A. open-end or closed-endB. Over the past 5 years, the fund has appreciated to $46,000. A. is obligated to buy the stock at the current market closed end management company II and IIIC. >$20,000 - $45,000 6 % To impose the maximum sales charge of 8 1/2%, FINRA requires funds to give investors specified breakpoints (lowered sales charges for large dollar purchases), a letter of intent option (once the letter is signed, the investor has 13 months to complete a breakpoint), and rights of accumulation (the investors accumulated position counts towards completion of a breakpoint). Also note that FINRA specifically looks for market timing customers that attempt to avoid detection by flying under the radar by using multiple account numbers or trading in amounts just beneath the audit thresholds. On January 1, 2019, Trueman Corp. issued $600,000 of 20-year, 11% bonds for$554,860, yielding a market (yield) rate of 12%. True D whereas ______ mortgages are riskier loans made to financially weaker borrowers Acme $9.90 10.25 +.10 I, III, IV. that have outperformed the Dow Jones Industrial Average. Of course, any person who elects to reinvest the distributions in more shares will have now hold more shares, each one worth less than before. IV open-end management companies, A. I and III A An order placed to buy or redeem mutual fund shares is filled at: A. yesterdays opening Net Asset ValueB. He doesnt have time to redo the analysis. $50,001 - $100,000 4% Fixed dollar. II Investment in U.S. issued securities is permitted that days opening Net Asset ValueD. hedge fund. Money market funds typically invest in government securities, certificates of deposit, commercial paper of companies, and other highly liquid, low-risk securities. C. 2X (Leveraged) 20+ Year Treasury ETF The investor will receive: A contingent deferred sales charge is imposed if an investor redeems a mutual fund before holding the fund for a stated time period. Which statements are TRUE regarding Step-Down Certificates of Deposit? We review their content and use your feedback to keep the quality high. The customer will pay what price per share? C A B legal fees. She should be told that these are lightly regulated, high risk investments that are only suitable for wealthy, sophisticated investors. A. The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000. is capped to a maximum amount, An order placed to buy or redeem mutual fund shares is filled at: At the end of that day, the S&P 500 Index increases by 10%. closed-end fund is managed; while an open-end fund is not managedC. C Then sellers exceed buyers and the market price is pushed lower than Net Asset Value. MARR is 15 percent. I Roth IRAs allow a greater contribution than Traditional IRAs II Roth IRA contributions are not tax deductible III Distributions from a Roth IRA are not taxable if the investment is held for at least 5 years An individual or corporation making a purchase is considered to be one purchaser and qualifies for the breakpoint. Any purchaser would pay the prevailing market price (which can be below, at, or above Net Asset Value) and would have to pay a commission to have the trade executed. Thus, closed-end funds can trade at NAV; below NAV; or above NAV. >$45,000 - $65,000 5 % The Ask price on ALPO Fund is $10.39 per share or $1,039 for 100 shares. True or false: Development in financial markets worldwide include the construction of indexes for foreign markets. So its either the hedge fund or the fund of hedge funds. Because of this, the customer must deposit new money in the dollar amount required by the LOI to get the lowered sales charge. I registered under the Investment Company Act of 1940 ETFs are almost a hybrid type of investment company structure because they allow for the creation of additional shares, like an open-end fund; but they are listed and trade like a closed-end fund. Distribute the amount in excess of the $50,000 LOI requirementC. For example, a 200% leveraged inverse ETF can be expected to move 2 times as fast as the reference index, but in the opposite direction. Exchange Traded Fund. The fund has the following breakpoint schedule: Purchase Amount Sales Charge$0 -$10,000 7.75 % $10,001 - $25,000 7.25 %$25,001 - Over 6.50 %. The registered representative advises the customer to invest $8,000 on ABCD fund; $8,000 in DEFF fund; and $8,000 in XYZZ fund; to give the customer complete diversification and reduce risk. The term mutual fund is the common name for a(n): A. open end management companyB. Let X be the number of cancellations on a particular Wednesday. Which of the following statements are true about public corporations? $1,039D. When discussing mutual funds with a customer, which statements are prohibited? C I Distributions to mutual fund shareholders are taxable to the holder in the year the distribution is made requiring at least 40% of the fund's Board of Directors to be "non-interested" partiesD. I, II, III, IV. Money Market Yield: The interest rate earned by investing in securities with high liquidity and maturities of less than one year such as negotiable certificates of deposit , U.S. Treasury bills . II and IV, The term "mutual fund" is the common name for a(n): The reason why these funds are called "money" funds is that the securities held in the portfolios have very short maturities (less than 30 days) and turn over into cash quickly. The representative was required to tell the customer about the family of funds featureC. A They have relatively low credit risk. _________ ratio. B. to change the separate account's investment objective D The statement that the customer will pay a sales charge to exchange shares within a family is not true. A repurchase agreement (repo) is a short-term form of borrowing that involves selling a security with an agreement to repurchase it at a higher price at a later date. The most important factor to consider when selecting a mutual fund is investment objective. Mortgage REITs I, II and IIID. I A Life Annuity payout option may be elected by the policy holder The ex-date is set by the Board of Directors of the Fund Because the investor might be able to achieve hedge fund like returns (since the interval fund makes investments in a much broader range of assets such as commercial property, private equity funds, hedge funds, business loans, catastrophe bonds, etc.) $750 C The fed funds rate is simply the rate of interest on: very short-term loans among financial institutions. II Hedge funds must register as management companies under the Investment Company Act of 1940 Which of the following statements are TRUE regarding the mutual fund letter of intent? C Which of the following statements is true regarding money market funds? Passive asset managementB. The investor will receive: A contingent deferred sales charge is imposed if an investor redeems a mutual fund before holding the fund for a stated time period. A (If market interest rates rise, both stock and bond prices are negatively impacted. both have portfolios that are managed Both open-end and closed-end management companies use an investment adviser to manage a portfolio within the funds stated objectives. D. is not obligated to buy the stock at the market, A. is obligated to buy the stock at the current market The expense ratio is found by taking Total Expenses / Total Net Assets. ETFs trade on all of the following markets EXCEPT: Exchange Traded Funds, as the name says, trade on stock exchanges. II and III. D Real Estate Investment Trusts must distribute at least 90% of their Net Investment Income to shareholders; and invest at least 75% of their assets in real estate activities; to be regulated under Subchapter M. REITs can invest in all of the following EXCEPT: A. mortgagesB. C Which of the following statements are TRUE when comparing a Life Annuity to a Life Annuity with Period Certain? The guarantee of a minimum growth rate in the separate account if a higher annual fee is paid for this rider Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac). Any purchaser would pay the prevailing market price (which can be below, at, or above Net Asset Value) and would have to pay a commission to have the trade executed. Mutual funds financial statements are sent to shareholders: A. monthlyB. On the $15,000 purchase, the customer will pay a sales charge of: Value Stock The reason why these funds are called "money" funds is that the securities held in the portfolios have very short maturities (less than 30 days) and turn over into cash quickly. open-end fund computes Net Asset Value daily; while a closed-end fund does not. Closed-End FundC. The maximum annual 12b-1 fee permitted under FINRA rules is: A customer redeems 1,000 shares of ABC Fund. operating efficiencyC. no-load fundC. The customer starts with 200 shares at $50, or a $10,000 position. the annuitant's life, but if he dies before 20 years elapse, payments continue to his heir(s) A customer redeems 1,000 shares of ABC Fund on Wednesday, June 14th. If real estate does well as an investment, the shares will appreciate, giving the investor a capital gain. A. I and II A. non-negotiableB. Multiple select question. The stock then trades like any other common stock, except the company is in the business of making investments; instead of say, making cars, beer, or computers. I Investment ClubII Omnibus AccountIII Corporate PurchaserIV Individual Purchaser, A. I and II onlyB. A. StockB. The market price of the fund could be: A. II onlyB. Which statements are TRUE when the Federal Reserve enters into a repurchase agreement with a U.S. Government securities dealer? To compute the new lowered offering price, the formula is: Net Asset Value $9.42 $9.42- = = = $10.075100% - Sls Chrg % 100%-6.5% .935 Nw Prc. The other major exchange traded funds include - SPDRs (Standard and Poors 500 Index - symbol = SPY) - also traded on the AMEX (now renamed the NYSE American), and QUBES (NASDAQ 100 Index - symbol = QQQ) which are traded on the NASDAQ. A sales chargesC. II The representative must believe that the customer would benefit from the product's features c. They have management fees higher than other mutual funds. A Nowadays, most hedge funds are not doing much better than the overall market, and managers are moving towards a performance fee based on return achieved over a benchmark index, as opposed to a fee based on absolute profits (which might be achieved not because of superior investment choices, but because the market simply went up). To meet the customer's investment objective of tax advantaged income, the BEST recommendation is for the customer to: The "death benefit" associated with a variable annuity contract: n income fund would likely invest in all of the following securities EXCEPT: Assets - Liabilities for a mutual fund equals: Many years ago, a customer opened a Coverdell ESA for his son, who is now age 16, and a savings account for his daughter, who is now age 18. 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