B Brainscape helps you realize your greatest personal and professional ambitions through strong habits and hyper-efficient studying. They trade on exchanges like individual stocks. These funds have a one time issuance of a fixed number of shares and then trade like other negotiable securities. Increase in value when asset falls in price $951 plus a commissionC. customer will have a tax eventD. A And the fees charged are more similar to hedge funds than a traditional closed-end fund as well - with annual ongoing fees averaging 3%, and another average 2% fee when shares are redeemed (and this ignores the up-front sales charge that is imposed when the shares are purchased!). I, II, III, IV, Which of the following statements are TRUE about the Net Asset Value per share for a mutual fund? Exchange Traded Fund. the wholesaler can offer the customer a lower sales charge since no concession will be paid to a selling group memberD. III The capital gain is taxable if it is automatically reinvested in the fund Borrowed shares are sold, and then must be bought back and replaced at a later date. requiring at least 40% of the fund's Board of Directors to be "non-interested" partiesD. If market prices are fluctuating, the plan will produce a lower average per share costC. Purchase Amount Sales Charge Mutual funds offer various share classes to investors. B 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: They invest in commercial paper, CDs and repurchase agreements b. Investment Companies (Ch 7): Overview (Sec 1): Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Rhetoric Catechism Questions feature (wk1-6). Their common stock can be bought or sold freely on stock exchanges. Note that most funds process redemptions much more quickly than this. capital gains potentialD. In past years, FINRA has taken enforcement action against sophisticated institutional hedge fund investors that have engaged in illegal mutual fund trading practices at the expense of the existing mutual fund shareholders. use aggressive investment strategies and have higher riskC. I Open end fund / Mutual fundII Closed end fund / Mutual fundIII Open end fund / Publicly traded fundIV Closed end fund / Publicly traded fund, A. I and IIB. So the bottom line on interval funds is that they are higher risk, higher fee, illiquid investments that attempt to achieve higher returns. preferential taxation of dividends received. C. II and III The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n): A leveraged inverse ETF combines both. Which of the following securities CANNOT be sold by an individual holding an investment companies/variable annuities registered representative's (Series 6) license? A tax deductible contribution of $11,000 ($5,500 each) is permitted. Which statement is TRUE regarding a Step-Down Certificate of Deposit? II and III that days opening Net Asset ValueD. The customer must be paid the money within: A married couple, where both individuals work, earns in excess of $119,000 in year 2017. interest income from mortgages If a mutual fund distributes 99% of its Net Investment Income to its shareholders, how much of the Net Investment Income will be taxable? The guarantee of payments for life if the purchaser chooses to take a lump sum distribution at retirement ETFs have been increasing in popularity as compared to traditional mutual funds because of their low cost (low expense ratios). Their interest income is exempt from federal income taxation. C. $990 plus a commission IV Capital Losses, A. I and III The representative tells the hedge fund customer of the conversation, after which the customer places daily orders to buy and sell that funds shares in amounts of $750,000. SPDRs are Spiders - the Standard and Poors 500 Index exchange traded fund. Which of the following statements are TRUE regarding the mutual fund letter of intent? Thus, on the NYSE floor, a customer is always assured that the trade will be executed- however the price at which the trade is executed is always subject to market conditions. True B The customer deposits $15,000 into the fund over the next 13 months. Thus, they are only suitable for relatively risk tolerant, sophisticated investors. Correct B. II only Charges for soliciting new shareholders, mailing prospectuses to new shareholders, etc. C C I, II, III. Which of the following statements are TRUE regarding the Federal tax treatment of regulated mutual funds? How much does the customer have to deposit to complete the LOI? Both Treasury notes and Treasury bonds may be issued in increments of $ ________. It is based on 500 firms. For example, if the fund held overseas stocks, that might slow up the computation of NAV for the fund company - however the sophisticated hedge fund investor might build its own software to compute NAV faster than the fund company - and would place buy orders for shares that it found to be undervalued and sell orders for fund shares that it found to be overvalued. On the other hand, exchange traded funds are treated like regular listed stocks and can be bought on margin and can be sold short as well. dividends at Net Asset Value and capital gains at the Public Offering PriceD. $10,450C. B II Life Annuity-Period Certain is the preferred payout option III Annuity payments may be reduced because of increased expenses experienced by the insurance company ETFs permit individual investors to buy creation unit. Which of the following statements about real estate investment trusts is true? 0 0 Similar questions A. At this point, the customer wants to buy another $15,000 of the fund. I the price of the stock remains fixed December 31st of the calendar year in which the contribution may be claimed on that person's tax return ready marketability of sharesC. C When the proportion of the index a stock represents is determined by its proportion of the total market capitalization of all stocks in the index, the index is said to be ________ ___________weighted. I and II only The fund has a sales charge percentage of: The formula for the sales charge percentage is: A-B $13.30 - $12.30 $1.00- = - = = 7.5% A $13.30 $13.30. Explain. I Investment ClubII Omnibus AccountIII Corporate PurchaserIV Individual Purchaser, A. I and II onlyB. The cost of soliciting new investment also includes compensation to registered representatives selling the fund shares. Which statements are TRUE regarding mutual fund expense ratios? However, because the shares were reduced by the exchange for the dividend where they were traded on the ex date, the net effect of the dividend receipt to the fund is 0 (tricky, huh!). 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. Write a paragraph to form a hypothesis about why India's Supreme Court put a temporary ban on the pesticide endosulfan. Mutual funds are bought at the Ask price that includes the sales charge. The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000; that no more than 60% of the Board of Directors be interested parties - that is, they are affiliated with the sponsor, custodian, transfer agent, or firms in the selling group; and that the fund have a stated investment objective that can only be changed by majority vote of the shareholders. Then sellers exceed buyers and the market price is pushed lower than Net Asset Value. I, II, III, IV. I and IV If the company sells 10,00010,00010,000 policies, what is the expected profit or loss? If a single company held in the underlying stock portfolio has its credit rating lowered, this will have a minimal impact on the value of the overall portfolio. increases cost basis So the bottom line on interval funds is that they are higher risk, higher fee, illiquid investments that attempt to achieve higher returns. An engineer prepares a report to evaluate a project using PW and IRR. All dividends, interest and capital gains are taxable in the year received Mortgage REITs $10,800. Brainscape helps you realize your greatest personal and professional ambitions through strong habits and hyper-efficient studying. III and IV onlyC. Because they are risk-free, they offer lower interest rates than other bonds. Thus, they are similar to closed-end investment companies under the Investment Company Act of 1940, except that investments are made in real estate and mortgages, instead of in securities. The representative tells the hedge fund customer of the conversation, after which the customer places daily orders to buy and sell that fund's shares in amounts of $750,000. III and IV onlyC. were created to make it easier for foreign firms to satisfy US security registration requirements. will decrease Equity REITs Multiple select question. ETFs have market risk. Both Treasury bonds and Treasury notes can be sold in increments of $100. C. III only III Fund dividends are not taxable if reinvested in additional shares I and II only Nos urge encontrar a una estudiante que ____ (ser) muy artstico para hacer pinturas de las diosas. The type of investment company that only redeems its shares periodically at stated dates is known as a(n): A. open end fundB. When comparing an ETN to an ETF, which statements are TRUE? A C requiring a majority vote of the outstanding shares to change a fund's investment objectiveC. whereas ______ mortgages are riskier loans made to financially weaker borrowers customer will pay a sales charge. D. Fixed dollar, ERISA regulations cover: contingent deferred sales charge fundD. II and III onlyD. II and III. Regularly scheduled investments of the same dollar amount in fund shares will most likely result in a: A. lower average price per shareB. The manager of the fund, not having to worry about redemptions, can make less liquid, more risky investments similar to hedge funds. $0 - $10,000 8 % In the United States, inflation-indexed Treasury bonds are referred to by their acronym ______. 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. Fixed period Capital gains taxes must be paid if they are sold for more than the investor's purchase price. I and II only Investing is best when you're looking to maintain the value of your money with a little bit of growth. They include treasuries with less than 1 year to maturity and negotiable CDs. What will be the market value of the 200 share position? They have relatively low credit risk. B. Question: Multiple Select Question Select all that apply Which statements are true of money market instruments? in the Dow Jones Industrial AverageC. C. II and III Browse over 1 million classes created by top students, professors, publishers, and experts. I, II, III, IV. A. Which of the following statements are TRUE regarding closed end investment companies? closed end management company C However, mutual fund companies will aggregate purchases of immediate family members in the same household and give them the benefit of the breakpoint. (REITs issue shares of beneficial interest with each certificate representing an undivided interest in the pool of real estate investments. When a sales charge is not imposed on a fund purchase, nor on redemption, this is known as a: A. front-end load fundB. It also requires that at least 40% of the Board of Directors be non-interested parties - that is, they are not affiliated with the sponsor, custodian, transfer agent, or firms in the selling group. They usually offer check-writing privileged c. They are highly leveraged and risky d. They invest in commercial paper, CDs and repurchase agreements and they usually offer check-writing privileges e. At the end of the first day, because the index rises by 10%, this position will rise by 20% to $12,000 value ($10,000 x 1.2). with a much smaller initial investment (minimum initial purchase amounts for interval funds range between $10,000 and $25,000). I, III, and IV. A customer who places an order to buy 100 shares of Adap Fund will pay approximately: They can be bought on margin or sold short. $1,918 plus a commission. After the LOI is completed, the additional NAV from the asset appreciation is added to the account balance, and establishes a new higher base level ($25,000 deposited plus $5,000 asset appreciation = $30,000) from which the sales charge will be calculated on any future purchases. A bonds B II and III I Money market funds are typically sold with a sales chargeII Money market funds are typically sold without a sales chargeIII Fund dividends are taxable, whether or not reinvested in additional sharesIV Fund dividends are not taxable if reinvested in additional shares. It appears that the hedge fund is engaging in the prohibited practice of market timing of mutual fund shares B CLOSED END BOND FUNDSFund Net Asset Value Stock Close NAV Change, Acco $8.32 8.13 -.08 Acme $9.90 10.25 +.10Adap $7.45 7.50 -.01. only capital gains at Net Asset ValueC. I and IV C II, III, IVD. that day's closing Net Asset Value, Series 7: Retirement Plans (Education And Hea. I and IV no load fundC. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac). I, II, III only The management fee is not decided on by the shareholders of the fund. A. I and II The receipt of these monies into the Fund increases NAV per share. C So its either the hedge fund or the fund of hedge funds. Which statements are true about bid-ask spreads? C To impose the maximum sales charge, under FINRA rules, mutual funds must offer investors all of the following EXCEPT: A. BreakpointsB. B Because of this, the customer must deposit new money in the dollar amount required by the LOI to get the lowered sales charge. However, fixed income security prices fall more than stock prices. Distribute the amount in excess of the $50,000 LOI requirementC. Multiple choice question. I, II, III, IV. higher average price per shareC. Convey the obligation to deliver the asset both have portfolios that are managed The maximum offering price per share is: An inverse ETF is most similar to taking what options position(s) on the reference index? ETFs (Exchange Traded Funds) have an NAV that is based on the value of the physical underlying securities. III federal government employee retirement plans, A. I only To prevent market timing, most mutual funds have placed restrictions on excessive trading in their prospectuses and monitor accounts for excessive short-term trading. exchange-traded The national average interest rate for savings accounts under. The customer starts with 200 shares at $50, or a $10,000 position. Shareholders in a management company have the right to: vote for the Board of Directors; to vote for changes in the investment objective; to vote annually on the investment adviser; and to receive semi-annual and annual reports. What are the terms used for the price specified in an options contract at which the underlying asset can be bought or sold? This nurse is not wealthy enough for a hedge fund investment. They have relatively low credit risk. The maximum annual 12b-1 fee permitted under FINRA rules is: A customer redeems 1,000 shares of ABC Fund. 10 business days. In this example, Choice C meets the customers requirements. All of the following statements are true regarding the Federal Funds rate EXCEPT the rate is: A. charged from one Federal Reserve member bank to another member bank B. set by the Federal Reserve C. lower than the discount rate D. computed every business day Classes created by top students, professors, publishers, and experts bonds and Treasury notes and Treasury may... And experts mailing prospectuses to new shareholders, mailing prospectuses to new shareholders, mailing prospectuses to new,! Their interest income is exempt from federal income taxation top students, professors, publishers, experts. True regarding a Step-Down Certificate of Deposit strong habits and hyper-efficient studying underlying securities deferred sales charge only Charges soliciting... Federal tax treatment of regulated mutual funds are bought at the Public PriceD! & # x27 ; s investment objectiveC students, professors, publishers, experts! 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