Series 66

stock that entitles the holder to a fixed dividend, whose payment takes priority over that of common-stock dividends.

$100

An increases the number of shares by the issuer

No

state-specific anti-fraud regulations that require issuers of securities to be registered and to disclose details of their offerings.

Market timing

Vested

gives the buyer of the option the right but not the obligation to purchase underlying shares at the strike price before the contract expires.

A bearish strategy where the trader is obligated to sell. The goal is to make money from the premium and see the option expire worthless

Limited partnership

Limited partners only share in losses and liabilities to the extent of their investment in the company. General partners have unlimited liability for debts and lawsuits.

a business owned by two or more parties, with at least one being the general partner who oversees the business.

protect America's investors by making sure the broker-dealer industry operates fairly and honestly.

similar to an underwriter except they have a federal fiduciary duty to state or local government issuers, and therefore, is required to act in the issuer's best interests without regard to its own financial or other interests.

Statutory disqualification

Tax-exempt securities

Closed-end fund (CEF)

Joint tenants with the right of survivorship (JTWROS) is a legal structure where two or more parties share ownership of a financial account or another asset. When one of the joint owners dies, their share automatically passes to the surviving co-owner(s).

Joint Tenants with Rights of Survivorship (JTWOS)

• Communications with the public
• FOCUS reports
• Trial balances
• Form U4, Form U5, and fingerprint cards of terminated personnel
• Customer confirmations
• Order tickets
• Subsidiary ledgers
• A list of every office where business is regularly conducted
• Associated persons' compensation records
• The firm's written supervisory procedures
• Recordings of telephone conversations

Red herring

It provides potential investors with vital information regarding a company or product prior to the Initial Public Offering of said company or product.

a U.S. dollar-denominated bond that trades outside of the United States.


Dollar bonds are used to attract a greater breadth of investors since there will be less currency risk for U.S.-based creditors.

An order that specifies a price a trader wants to purchase a security at.

Net Asset Value

volume discounts to the front-end sales load charged to investors who purchase Class A mutual fund shares

"SEC v. W. J. Howey Co."

a bearish position when somebody buys a put option, either anticipating a decline in the underlying asset and hedging a portfolio against downside losses. They have the right to sell and risk is limited

a relationship between a member firm (BD or IA) and issuer of a security in which the firm is controlled by, controlling, or under common control with the issuer.

Must be disclosed to customers before transactions are completed

the amount that an investment has returned in comparison to the market index or other broad benchmark that it is compared against

Alpha of greater than zero

9% over a period not to exceed 20 years.

Lump sum payment

an offering of additional shares after an initial public offering

• Diluted - when the number of shares in circulation increases resulting in a lower EPS
• Non-diluted - when existing shares are brought to the market resulting in an unchanged EPS

Cash and assets converted into cash in next 12 months

Direct Participation Programs offer a pool investors access to a non-traded businesses's cash flow and tax benefits. This is a popular way for average investors to access investments usually reserved for wealthy investors

The most common DPPs are non-traded REITs and limited partnerships.

An agreement signed by a brokerage customer that permits a broker-dealer to lend the securities in that customer's margin account.

an investment vehicle that pools money from multiple investors to purchase a diversified portfolio of securities

They give individual investors access to diversified, professionally managed portfolios

A way for account owners to establish beneficiaries to receive their assets without going through probate. There is no access while the owner is alive

A security exempt from the state administrator, state restrictions, and regulations in order to standardize regulatory compliance. Most stocks traded in the U.S. are covered securities.

you own the security

selling a security you own

Legal and binding bond contract describing its terms and characteristics. 

Deed of Trust

Preliminary prospectus

Par Value / Conversion Price

Office or department responsible for enforcing state securities law

short term, highly liquid debt obligation backed by the U.S. govt

Five years

Within 15 days of account approval

the total market value of investments held by the fund minus fund liabilities and expenses

Standardized fund pricing for mutual funds that uses net asset value (NAV).

Underwriter

Companies conducting an offering can sell securities to an unlimited number of accredited investors and 35 non-accredited investors

BBB- (S&P Global, Fitch)

Baa3 (Moody's)

An illegal activity where a trader simultaneously buys and sells the same security in order to mislead investors that trading volumes are higher than they really are, potentially leading to higher trading activity

Painting the tape

the 75-5-10 rule 

75% of its assets in other issuers and cash, no more than 5% of assets in any one company, and no more than 10% ownership of any company's outstanding voting stock

Current Assets ÷ Current Liabilities

• Tax Defferred Growth
• Tax-free withdrawal when used for qualified medical expenses
• Pretax contributions

Coupon rate or nominal yield

Inactively traded stock

When an investor purchases stocks and does not have enough equity in the account to meet the 50% equity requirement, a fed margin call, also called a Regulation T margin call, is triggered

Options Clearing Corp (OCC)

$10,000 if exercising discretion,

$35,000 if maintaining custody

403(b) Plan

When a company has already gone public and wants to raise additional funds by a second offering of stock. The issuer receives the proceeds.

The AP's supervisor or principal

Premium

the average price over a specified period of time

yes, futures and options are similar speculative and hedging instruments.

180 days

Person

Settlement date

The agent's supervisor

• Articles of incorporation
• Minutes from the board meetings
• Stock certificate book

price predictions using price patterns and volume

Short sale

Long sale

the simultaneous buying of a commodity or seccurity in one marketplace and selling of the same commodity or security in another marketplace. It is not an illegal practice

Bonus annuities

initial, always

61 days

Deferred, fixed, variable, or indexed

Premium

Front running

It allows issuers offering securities intrastate (within one state only) to avoid federal registration and requires All Purchasers of an Offering to Be Residents of the State

merchandise, travel, meals and lodging

Long puts in that security

Registered Options Principal (ROP)

using an asset as collateral for a loan while maintaining full possession

the ability to convert a mutual fund for for another within the same fund family at NAV.

Market where new securities are issued

Major changes in investment policy

$1,000

Yes, it must be returned within 15 days of account approval or any transaction must be closing only.

Exempt unregistered security

Option to expire out of the money

Wash trade

requiring registration so that investors are provided with relevant information

Fee to cover risk of insured living shorter, or longer than assumed for an annuity. about 1.25% annually

a measure of a stocks volatility in relation to the S&P 500. Better indicator of short term risk rather than long term risk

financial institutions are required to use FinCEN Form 112 to report transactions in currency of more then $10,000

No registered investment company can have a board of directors where more than 60% of persons have an interest

Name Date of birth (for individuals) Address (physical location, not P.O. box) Identification Number.

75% of the cash value

Commission payments by institutional investors to brokerage firms (BDs) to pay for other services such as research. 

Although they can provide access to a greater variety of research, they lack transparency and often hide abuses

Unlimited

Personal liability for all partnership business losses and debts. 

Doctors and lawyers

Non-qualified deferred compensation plan. It allows an employee to earn compensation in one year but receive earnings and defer income tax on them in a later year

when they are purchased on the premises of a networking bank

An investment adviser

overall macroeconomic risk inherent in the entire market. examples include inflation rates, interest rates, and political instability

Owner's equity (Net worth)

Analysis that concentrates on a company's economic trends and determining it's intrinsic value

At least 30 days

State requirement for securities listed on a stock exchange as well as registered investment companies

it outlines an advisory firm's investment style, key personnel, and assets under management

Firm quote

Unlimited

a creditor or lender associated with a credit predicted backed by collateral. 

When a client goes bankrupt, they are to be paid first in full before unsecured creditors are paid anything.

an order to buy or sell a commodity or security at a specific price or better.

debt securities issued by states, cities, counties, or other governmental entities to fund day-to-day obligations

the municipal bond equivalent of a prospectus

A debt instrument that does not pay interest but instead trades at a deep discount where the investor's return is realized at maturity. 

Par value - purchase price

traders feel the commodity or security is overvalued

a deduction for steps required to get an oil well up and running to encourage the costly and risky process of developing new oil and gas wells.

Interstate

the min amount you must take out your retirement to avoid a tax penalty. Age 73

Investing in multiple asset classes to reduce overall risk to a portfolio

$100,000

This constitutes a recommendation

Issuer registers simultaneously with the state and the SEC

Short sale

an optional document that permits a BD to lend securities in that customers margin account. Broader than a hypothecation agreement

Buy puts on a broad-based index.

• Blotters
• General Ledger
• Stock Record
• Customer Ledgers
• Customer Account Records
• Principal designations

Yes

Hypothecation agreement.

Analysis that predicts direction of prices based trading volume, patterns, charts

An unlawful representation

Prohibits trading on the basis of material nonpublic information

Stop order

Current Assets / Current Liabilities

The growth rate an insurance company selects that determines the monthly payment of an annuity.

Leverage

A contract with a financial advisor that's extended annually after an initial maximum term of two years

Measurement of value in a structured investment vehicle like a variable annuity during the accumulation period.

the minimum requirement in an account

a financial product that will provide a series of payments at a later date with the possibility of higher returns and inflation protection, but also the risk that the account will fall in value. 

Different than fixed annuity where payments are established

DMMs maintain quotes, facilitate buy and sell transactions, maintain fair and orderly markets

Treasury Inflation-Protected Securities (TIPS)

A Treasury Issue that protects against purchasing power risk by increasing/decreasing with inflation/deflation, measure by the CPI

Trigger transaction

Investor allowed to invest in non-registered securities.

Net worth of $1 million or Income of $200,000/$300,000 joint

It is an order that becomes a live market order when a particular price level specified by the customer is reached or traded through.

• Age
• marital status
• employment
• number and ages of children
• tax status
• risk tolerance

Annually

Law that thwarts money laundering and terrorism financing by closing certain loopholes

No

• Lack of regulation
• Low transparency
• Low liquidity
• High fees

Annually

Conflict of interest

financial and tax status, risk tolerance, objectives and other holdings

Last in, first out (LIFO)

Decline in value of fixed assets

Two years

Bearish Breakout

simultaneous purchase and sale of an asset to exploit tiny differences in prices. Arbitrage takes advantage of inefficiencies in the market, which bring it closer to efficiency

Apart of a limited partnership (with at least one general partner with unlimited liability) with liability only up to the size of their investment. Almost no reporting requirements

Names are not usually included on the partnership

Selling a call and a put with same strike and expiry. Its goal is to profit from an underlying lack of volatility in the asset price and ideally buy time.

60 days

CY = Annual Income (Dividend or Interest) / Current Market Value

Direct Participation Progam. Offers access to a businesses cash flow and tax benefits requiring a buy-in from members. 

limited partnership, REIT

Tax-free exchange between similar insurance contracts.

can exchange an old policy for a new one with better features. 

A life insurance policy can be exchanged for an annuity, but an annuity cannot be exchanged for a life insurance policy.

Security backed by mortgages on commercial property. 

Equity REITs generate revenue through rent, mortgage REITs generate revenue from interest payments on mortgages.

Selling away

past price history does not reflect future prices.

it implies that its impossible to beat the market without assuming additional risk, fundamental analysis is undependable due to misinterpretation, and investment advisors add little to no value to an investors portfolio.

allows minor to receive gifts without a guardian or trustee, can avoid tax consequences until legal age, Irrevocable

When a sales charge or commission is applied to the NAV of a fund resulting in the POP or public offering price.

when a security is registered by the SEC and relevant state administrators

when the issuer registers only with the state

Immediately at the best price

Buyback stock. Stock issued and subsequently reacquired by the issuer.

270 days to maturity

Obligated to Buy

Current Assets - Inventory / Current Liabilities

a floor on the percentage of taxes that a filer must pay to the government

Where securities are traded between investors after they are put up for sale on the primary market. Ie NYSE and NASDAQ

Right to Buy

The Commodies Futures Trading Commission (CFTC)

A trade that increases a current position or establishes a new position.

An individual who represents a broker-dealer

Extra $1000, starting at age 55

a way of quoting bond prices based on their yield to maturity

It captures the annual return expected from the bond if the investor holds it until its maturity date.

traders feel the commodity or security is undervalued

Negative correlation. medium risk medium reward

Safe harbor to offer a private placement of securities

Annually

Higher-than-average returns for higher-than-average risks

Soft dollars

Section 529 Plans

Secondary market

Customer complaint

Lock up

0.25

Quarterly

a discretionary order representing multiple customers.

Customer Identification Program (CIP)