unit 1
Purchasers of common stock may generally look to all of the following risks associated with that investment except
B) interest rate risk.
A state government has outstanding debt that it issued to finance toll roads, sports facilities, and public housing projects. All of these issues are examples of
municipal revenue bonds.
two things that are bullish
long calls
short puts
what is a breakpoint sale
limit of sale that must be disclosed to the customer if applicable
what are the two educational plans
529 and savings plan
A preferred shareholder's priority claim on assets is the preferred shareholder's priority standing over
common shareholders.
Which obligation is backed by the full faith and credit of the United States Government?
Government National Mortgage Association (GNMA)
An investor short a January 30 call at 4 has a maximum gain potential of
4 points or $400.
calss b is also known as
back end load
true or false
plan donors must be related to the student benefactor.
If a preferred shareholder received a $3.50 annual dividend each year, it could be assumed that
this is a 3.5% preferred class.
Most municipals pay interest that is tax free at the federal level. What is a taxable municipal bond?
BABs
When XYZ is trading at 30, an XYZ 40 put sold at 3 would be
in the money.
how do you calculate the NAV
total assets - total liabilities
A hedge fund portfolio has been characterized as being highly leveraged. This means that
there is substantial borrowing or purchasing on margin.
Characteristics common to penny stocks would include
Market price less than $5 per share and unlisted
what is the order of liquidation
secured
debentures/ genereal creditors
subordinate debt
preferred stock
common stock
what option contracts would both have intrinsic value if the strike price is 30 and the market price is 40?
Long call and short call
what is the purpose of the letter of intent
letting issuer know that you will put money in later
describe a limited partnership
An investment that permits both gains and losses to pass through to the investors
In order to receive a declared dividend a shareholder must be an owner of record at the close of business on the
ex-dividend date.
A customer buys a 4% Treasury bond, maturing in 10 years, at a price of $96.08. The yield to maturity (YTM) is
greater than nominal yield.
If a customer sold calls to open, which of the following transactions would be allowed if the options agreement was not returned signed within 15 days?
Buy calls to close
name two differences between open- end and closed- end
close end:
no shares are fixed
no prospectus after ipo
shares are not reedemable issue sd, ps, an ord bonds
what are characteristics are typical of an exchange-traded product (ETP)?
The value of an ETP is derived from other investment instruments, and it trades on a national securities exchange.