My Word is my Bond
This security starts life as one type, but can be changed to another at the holder's discretion.
What is a convertible bond?
Open-end investment companies are only permitted to issue this type of security.
What is common stock?
Insurance companies offer these to protect against longevity, backed by their general account.
What are fixed annuities?
When swapping one life insurance policy for another, this provision makes the transaction tax free.
What is the 1035 exchange provision?
When it comes to picking the board of directors, this gives you the right to vote your shares once for each item on a ballot.
What is statutory voting?
This mortgage agency bond, paid monthly, is the only one backed by the full faith and credit of the United States government.
What is a GNMA (Ginnie Mae) bond?
This preferred stock must pay dividends in arrears prior to paying a common dividend.
What is Cumulative Preferred.
These types of units will remain fixed in quantity, but may affect a payment by varying in underlying value.
What are annuity units?
Whole life insurance policies provide guaranteed cash value and death benefits, and require this license for sales.
What is an insurance license.
These shares of a corporation have been issued and subsequently repurchased from the public.
What is treasury stock?
Reached when a company's debt comes due.
What is maturity?
To be called this, an investment company would need to follow the 75-5-10 rule.
What is diversified?
For this option, a participant need only pay once and sit back until ready to begin their benefit.
What is a single payment deferred annuity?
A distribution of a corporation's earnings, declared by the board of directors.
What is a dividend?
This debt, used by local governments, relies on income-generating public projects.
What is a revenue bond?
They are responsible for investing a mutual fund's assets, implementing investment strategy, and managing day-to-day trading.
Who is the portfolio manager or investment advisor?
The tax-accounting method used for annuities where assets are withdrawn during the accumulation phase.
What is Last-In-First-Out (LIFO)?
A variable or whole life insurance contract that permits the holder to adjust the premium payments and death benefit according to changing needs.
This is offered to shareholders to prevent dilution of their proportional ownership in the event of an additional stock offer.
What is a preemptive right?
Backed by housing debt or property, these securities often carry the risk of prepayment when interest rates go down.
What are Collateralized Mortgage Obliations (CMOs)?
A provision that allows mutual funds to collect for the cost of promotion, sales of, or distribution of the fund.
What is the 12b-1 asset-based fee?
If the return in the separate account is equal to this, don't expect the payments to change.
What is the assumed interest rate (AIR)?
When stocks are not part of the Nasdaq or exchange-listed, they may still be traded here.
What is the over-the-counter bulletin board (OTCBB) or Pink Sheets?