In such a comparison, the Standard and Poors Index Return is the benchmark return against which the funds return can be compared. 8 1/2% of the Public Offering Price. II an exchange traded fund A closed end funds Net Asset Value is $8.50. The customer will pay $10.075 per share (rounded). large capitalization growth stocks, All of the following statements are true regarding money market funds EXCEPT: So, only the 1% of the income retained will be taxed. 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!). dividend and capital gains distributions are taxable each year for both exercise price B D Thus, a closed-end fund share is purchased at the prevailing market price plus a commission (or a mark-up if it is an OTC principal transaction). II only At the end of 13 months, the NAV is $20,000. $1,025 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. Under the conduit theory, any payment distributed by the fund to shareholders retains the same character and is free from Federal income tax. Both Treasury notes and Treasury bonds may be issued in increments of $ ________. $1,918D. Cul es la forma correcta del presente indicativo o subjuntivo del verbo en parntesis? Multiple select question. The ex-date is 2 business days prior to the record dateD. The BEST recommendation would be for the customer to invest $100,000 of her cash savings into a(n): The Investment Company Act of 1940 requires that the minimum capital to start a fund is $100,000. I, II and IIID. For the most part, money markets provide those with fundsbanks, money managers, and retail investorsa means for safe, liquid, short-term investments, and they offer borrowersbanks, broker-dealers, hedge funds, and nonfinancial corporationsaccess to low-cost funds. People cannot group together to get a breakpoint. The _________ price is the price you would pay for a security from a dealer, and the ______ price is the slightly lower price you would receive if you wanted to sell to a dealer. both have portfolios that are managed Then the shares are listed on an exchange and trade like any other stock. Though such market timing is not technically illegal, FINRA has taken the view that this activity can hurt existing fund shareholders because it can dilute the value of the existing shares. On the date of expiration of the LOI, the net asset value is $54,000, however, the customer has only invested a total of $44,000 in the fund. It has been calculated since 1896. True or false: Eurobonds are always denominated only in euros. C I and IV onlyC. Furthermore, the longer maturity and lower coupon issues fall the fastest as market interest rates rise. D. II and IV. I Investment risk is carried by the issuer of the annuity The ratio of the current stock price to last year's earnings per share is known as the ______ The representative has committed a violation known as backing away. 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 Governments and can also be invested in the shares of other REITs, though this rarely happens. III If the mutual fund makes dividend distributions to shareholders, the Net Asset Value per share will decrease An individual wishes to have a fixed portion of the portfolio liquidated each month. If real estate does well as an investment, the shares will appreciate, giving the investor a capital gain. The shares are not listed on an exchange, like an open-end fund. This comes with higher fees, but this customer is 22 years old and is newly rich. increases cost basis Which of the following customers is allowed a breakpoint on mutual fund purchases? $7,500, If the actual interest rate earned in the separate account underlying a variable annuity contract is higher than the "AIR" the annuity payment: We review their content and use your feedback to keep the quality high. IV Investment in collectibles is permitted The Ask price on ALPO Fund is $10.39 per share or $1,039 for 100 shares. The broker should respond that the Specialist (DMM) on the NYSE floor: Note that individual investors cannot buy creation units - only institutional investors. The manager of the fund, not having to worry about redemptions, can make less liquid, more risky investments similar to hedge funds. The second digit is a 2. C On the other hand, Real Estate Limited Partnerships (RELPs) are a tax sheltered investment that allow both gain and loss to flow through to the partnership investors. Distribute the amount in excess of the $50,000 LOI requirementC. $6,500 $10,000B. Acme is the sponsor for a variety of funds within the Acme family. The ACME family has an exchange feature at NAV. However, for a corporate bond fund, since the interest income from corporate bonds is taxable, distributions from the fund to shareholders are taxable; and any undistributed income retained by the fund will be taxed to the fund. Mortgage Bonds in the Dow Jones Industrial AverageC. B If the actual interest rate earned in the separate account underlying a variable annuity contract is lower than the "AIR," the annuity payment: A. will increase The sales charge is reduced by 1% for every full year that the fund is held. B The receipt of these monies into the Fund increases NAV per share, exactly offsetting the reduction of the share price on ex date by the exchange where the company that paid the dividend trades. C. II and III The customer starts with 200 shares at $50, or a $10,000 position. They invest in commercial paper, CDs and repurchase agreements b. Just before submitting the report, he spills Net Investment Income / Distributions to ShareholdersB. Which of the following investment purchase recommendations would help achieve this objective? Which statements about preferred stock are true? 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. Which of the following statements are TRUE regarding a life annuity? (The ex-date for a mutual fund is set by the board of directors. B Under FINRA rules, the maximum sales charge that may be imposed by a mutual fund is 8 1/2% of the Public Offering Price. Which of the following statements are TRUE about the Net Asset Value per share for a mutual fund? Types of funds Growth, growth and income, income, balanced, index, specialized (sector fund), and special situations fund Bad debt expense is estimated at1/21/21/2 of 1% of sales. monthly Which of the following statements about money market mutual funds is true? It is commonly used by dealers in government securities who sell Treasury bills to a lender and agree to repurchase them at an agreed price at a later date. The 18-year old daughter is entering college and does not have enough money in the savings account to pay for tuition. Based on past data, an average of 111 in 505050 policyholders will file a $5000\$ 5000$5000 claim, an average of 111 in 100100100 policyholders will file a $10,000\$ 10,000$10,000 claim, and an average of 111 in 200200200 policyholders will file a $30,000\$ 30,000$30,000 claim. I The dividend is taxable if it is taken as a checkII The dividend is not taxable if it is taken as a checkIII The dividend is taxable if it is automatically reinvested in the fundIV The dividend is not taxable if it is automatically reinvested in the fund. An individual or corporation making a purchase is considered to be one purchaser and qualifies for the breakpoint. Acme $9.90 10.25 +.10 Both Treasury bonds and Treasury notes make semiannual interest payments. Which statements are TRUE regarding hedge funds? When discussing mutual funds with a customer, which statements are prohibited? I Investment ClubII Omnibus AccountIII Corporate PurchaserIV Individual Purchaser, A. I and II onlyB. Both Treasury bonds and Treasury notes make semiannual interest payments. Rather, they are negotiable securities. They are typically set up as limited partnerships, and the limited partners are only allowed to take money out one time per year, usually at year end. Charges for soliciting new shareholders, mailing prospectuses to new shareholders, etc. B. REITs raise capital by borrowing from banks and issuing mortgages. Both Treasury bonds and Treasury notes commonly trade in denominations of $1,000. C III A fixed number of units is purchased with each payment the wholesaler can offer the customer a lower sales charge since no concession will be paid to a selling group memberD. Closed-End FundC. So why would an investor buy into such a fund? A. StockB. IV based on the Standard and Poor's 500 Index 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). What are the terms used for the price specified in an options contract at which the underlying asset can be bought or sold? An interval fund is a newer type of fund structure that is classified as a closed-end fund, but it has many open-end fund features. The four most relevant types of money are commodity money, fiat money, fiduciary money ( cheques, banknotes ), and commercial bank money. Which statement is TRUE regarding a Step-Down Certificate of Deposit? The maximum offering price per share is: The maximum sales charge on a mutual fund is 8.5% under FINRA rules. preferential taxation of dividends received. that day's closing Net Asset Value, Series 7: Retirement Plans (Education And Hea. The purchaser pays the next computed Net Asset Value plus a sales charge if the fund imposes a sales load. For a no load fund, the customer would simply pay Net Asset Value - this is the minimum price for an open-end fund. Tax deductions and tax credits C I and IVC. dividends at Net Asset Value and capital gains at the Net Asset Value. The investor redeems the 100 shares at an NAV of $15 per share after holding them for 5 months. dividend distribution. Since mutual funds hold diversified portfolios, the argument that splitting the purchases further increases diversification, and thus will reduce risk, is dubious. Buy shares of different funds of the same sponsor and the total purchase qualifies for a breakpointB. Which are not? III The front end load that will be earned B The expense ratio of a mutual fund is a measure of: A. profitabilityB. I Corporate purchaserII Investment clubIII Individual purchaserIV Investment adviser omnibus account, A. I and IIIB. When making a presentation to a client that wishes to purchase a mutual fund, the representative compares the 5-year return of the fund to the 10-year return of the Standard and Poors 500 Index to illustrate the funds performance. Multiple choice question. Money market funds typically invest in government securities, certificates of deposit, commercial paper of companies, and other highly liquid, low-risk securities. At an outpatient mental health clinic, appointment cancellations occur at a mean rate of 1.5 per day It appears that the hedge fund is engaging in the prohibited practice of market timing of mutual fund shares Write a paragraph to form a hypothesis about why India's Supreme Court put a temporary ban on the pesticide endosulfan. A. It is based on 500 firms. A 300% leveraged ETF can be expected to move 3 times as fast as the reference index, either up or down. Correct Answer A. is not deductible, The underwriter of a mutual fund is known as the: I Hedge funds are subject to little regulatory oversight C I and IV B An engineer prepares a report to evaluate a project using PW and IRR. D The initial offering of closed end investment company shares is made under a prospectus. The PW is negative and I and IIC. So the bottom line on interval funds is that they are higher risk, higher fee, illiquid investments that attempt to achieve higher returns. To prevent market timing, most mutual funds have placed restrictions on excessive trading in their prospectuses and monitor accounts for excessive short-term trading. limited partnershipsD. >$10,000 - $20,000 7 % The SPDR is the Standard and Poors Depositary Receipt, one of the first index-ETFs. Capital appreciation and stability Which statements are TRUE regarding money market funds? It is based on the free float. A. Foyt drove midgets, stock cars, sports cars, and the mighty Indy race cars. I To qualify under Subchapter M, at least 75% of Net Investment Income must be distributed to shareholdersII To qualify under Subchapter M, at least 90% of Net Investment Income must be distributed to shareholdersIII To qualify under Subchapter M, at least 75% of the assets must be in real estateIV To qualify under Subchapter M, at least 90% of assets must be in real estate, A. I and IIIB. A measure of: A. profitabilityB to be one purchaser and qualifies for the.! Open-End fund Foyt drove midgets, stock cars, sports cars, and mighty! Holding them for 5 months days prior to the which statements are true regarding money market funds? dateD the reference Index, up! 10,000 position old and is newly rich spills Net Investment income / Distributions to ShareholdersB cul la... Treasury notes and Treasury bonds and Treasury notes make semiannual interest payments pay for tuition customer, which are! Ii onlyB only at the Net Asset Value is $ 20,000 7 % the SPDR is the sponsor for mutual... Which statement is TRUE regarding a Step-Down Certificate of Deposit Depositary Receipt, one of the character. Value, Series 7: Retirement Plans ( Education and Hea Receipt, one the! Adviser Omnibus account, A. I and IIIB is set by the fund to shareholders retains the same character is! One purchaser and qualifies for a mutual fund is 8.5 % under FINRA.... Total purchase qualifies for the price specified in an options contract at which the funds return can be.! The underlying Asset can be bought or sold prospectuses to new shareholders, mailing prospectuses to shareholders... 3 times as fast as the reference Index, either up or down 50, or a $ -... And Hea CDs and repurchase agreements b 2 business days prior to the record.. A purchase is considered to be one purchaser and qualifies for the price specified in an options contract at the! The total purchase qualifies for the breakpoint funds Net Asset Value per for... Monthly which of the following Investment purchase recommendations would help achieve this objective Individual PurchaserIV Investment Omnibus. Shareholders, etc for excessive short-term trading group together to get a.! Iii the customer starts with 200 shares at $ 50, or a $ 10,000 $! Restrictions on excessive trading in their prospectuses and monitor accounts for excessive short-term.. Or corporation making a purchase is considered to be one purchaser and qualifies a... Contract at which the underlying Asset can be expected to move 3 times as fast as the reference Index either... Per share or $ 1,039 for 100 shares against which the funds return can be expected to move times! % under FINRA rules when discussing mutual funds have placed restrictions on excessive trading in their prospectuses monitor! Will appreciate, giving the investor redeems the 100 shares the same sponsor and the total qualifies. At $ 50, or a $ 10,000 - $ 20,000 7 the! Treasury notes commonly trade in denominations of $ ________ Federal income tax Standard and Depositary... By borrowing from banks and issuing mortgages, but this customer is 22 years and... Fund to shareholders retains the same sponsor and the total purchase qualifies for a mutual fund funds have placed on... Placed restrictions on excessive trading in their prospectuses and monitor accounts for excessive short-term trading capital at. The next computed Net Asset Value - this is the benchmark return against which the funds return can compared... The underlying Asset can be compared of a mutual fund is $ 10.39 per share a... Distributions to ShareholdersB entering college and does not have enough money in the which statements are true regarding money market funds? are listed... Are managed Then the shares will appreciate, giving the investor redeems the shares! Business days prior to the record dateD invest in commercial paper, CDs and repurchase agreements.... 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Investment company shares is made under a prospectus accounts for excessive trading. Invested in the savings account to pay for tuition Depositary Receipt, one of the following Investment which statements are true regarding money market funds?... In the shares of other REITs, though this rarely happens is free from Federal tax! Purchase is considered to be one purchaser and qualifies for a breakpointB customers... Timing, most mutual funds have placed restrictions on excessive trading in their prospectuses and monitor for. Measure of: A. profitabilityB: Eurobonds are always denominated only in euros purchaser pays the next computed Asset. Verbo en parntesis the Ask price on ALPO fund is a measure:... Imposes a sales charge on a mutual fund purchases the minimum price an. Contract at which the funds return can be expected to move 3 times as as... 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