Prohibited Activity
Trading using material non-public information, or providing that information to someone else, if they then make trades on the information.
What is insider trading?
This type of maturity has aspects of both term and serial bonds.
What is a balloon maturity or balloon bond?
Issued by the federal government, this is the security with the shortest maturity.
What is a T-Bill or treasury bill?
A term describing risks that affect the whole economy. Traditional views hold that diversification cannot protect or offers limited protection from these risks.
What is systematic risk?
The standard time for most trades to go through.
What is T+2?
Selling shares of a mutual fund to a customer just below the level at which they would get a lower sales charge.
What is a breakpoint sale?
The assumed PAR value of a bond on the SIE, unless stated otherwise.
What is $1,000?
An agreement to sell already owned securities to another party who will then sell them back at a slightly higher price.
What is a repurchase or Repo agreement?
A risk of debt securities, that a debt holder will be unable to purchase new debts offering the same or a higher rate than the debts they currently hold.
What is reinvestment risk?
Regulation T gives investors this much time to settle a trade.
What is T+4?
Placing your own order just ahead of a customers order for the same security.
What is front running?
The order from most stable to most volatile of yields on the bond seesaw.
What are the coupon or nominal yield, current yield, yield to maturity, and yield to call?
A debt issues by corporations to finance immediate needs.
What is commercial paper?
The risk that an issuer will buy back a security, usually to reissue it at a lower interest rate.
What is call risk?
Federal government issued securities settle in this time table.
What is T+1
Making trades in a customer account just to generate commissions.
What is churning?
This bond with a misleading name, only pays interest if the company is profitable. A very risky investment for investors seeking income.
What is an income or adjustment bond?
A promissory note issued by a bank, it can be traded in the secondary market.
What is a negotiable certificate of deposit (CD)?
The risk that an agency or other governing body will pass new rules that affect a security.
What is regulatory risk?
When purchasing an option contract, the sale will settle in this many days.
What is T+1?
Purchasing a security, and then selling it before payment for that security has been made.
What is freeriding?
This bond can be exchanged for a percentage of ownership in the issuing corporation, at the owners discretion.
What is a convertible bond?
These are the two most defining features of a money market security.
What are high liquidity and a year or less to maturity?
A risk that the investor will not get back all of their initial investment. Federally backed securities are usually considered free of this risk.
What is capital risk?
A cash account settles in this time table.
What is T+2?