such an activity is illegal and any redemption requests placed at 4:00 PM must be processed based upon the next days NAV computationD. A leveraged ETF uses borrowing (margin) and options to magnify price movement as compared to the reference index. Note that individual investors cannot buy creation units - only institutional investors. 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. I Periodic payments of fixed dollar amounts are made This comes with higher fees, but this customer is 22 years old and is newly rich. Hedge funds offer higher returns coupled with higher risk and are only sold to accredited (wealthy, sophisticated) investors who understand the risks involved. I If the securities in the portfolio make dividend distributions, the Net Asset Value per share will increase Which of the following investments is the most illiquid? Which statements are TRUE regarding a Roth IRA? Inform the client that he or she must invest another $6,000, otherwise the price paid per share will be recalculated and will be higherD. A. I and III yesterday's closing Net Asset Value A customer redeems a mutual fund. Hedge FundD. there is an opportunity cost relative to the expected potential investment return when buying an exchange traded index fund as compared to buying an actively traded mutual fund. An open-end management company is a mutual fund. Manager Fundamental analysisD. The ex-date is set by FINRAC. II the price of the stock fluctuates The judge who ________ that case has an office downtown. 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. The investor redeems the 100 shares at an NAV of $15 per share after holding them for 5 months. open end management company The representative tells the hedge fund customer of the conversation, after which the customer places daily orders to buy and sell that fund's shares in amounts of $750,000. Interest is payable semiannually on June 30 and December 31. This makes sense because REITs cannot pass losses to their shareholders. are certificates traded in US markets representing ownership in shares of domestic companies. So its either the hedge fund or the fund of hedge funds. Family members in the same householdB. Note that most funds process redemptions much more quickly than this. (Closed-end funds listed on an exchange and trade like any other stock. Exchange Traded Fund. III and IV onlyC. a. Correct Answer A. $12,000 x .90 = $10,800. (Exchange traded funds based on indexes by industry sector, country, or market capitalization, are known as "I-Shares," as in "Index Shares. C Since this mutual fund invests solely in municipal securities, there is no Federal tax liability on the interest income received (remember, the interest income from municipal securities is exempt from Federal income tax). D. Inverse (Short) 20+ Year Treasury ETF, D. Inverse (Short) 20+ Year Treasury ETF The current economic environment is characterized by low interest rates and flat stock prices - and this is expected to remain unchanged for a number of years. Mutual funds are bought at the Ask price that includes the sales charge. The Net Asset Value per share is constant at $10 C. Net Asset Value per share varies with the performance of the portfolio D. Net Asset Value per share cannot be determined in a money market fund However, because the shares were reduced by the exchange for the dividend where they were traded on the ex date, the net effect of the dividend receipt to the fund is 0 (tricky, huh!). People cannot group together to get a breakpoint. A D The shares are not listed on an exchange, like an open-end fund. B $951 plus a commissionC. One section of this release would have to be devoted to a study of the Commission's 2010 money market amendments ("2010 Amendments") to gather data and ascertain their effectiveness. Which statements are true about bid-ask spreads? What will be the market value of the 200 share position? stability. Since this ETF is 2x, it is an ETF that moves in the same direction as the market, but it moves twice as fast The customer starts with 200 shares at $50, or a $10,000 position. (One specific type of violation is "market timing" - the practice of frequently buying and selling a fund's shares to exploit inefficiencies in how the mutual fund company computes NAV per share. II and IVC. A. I and III. To meet the customer's investment objective of tax advantaged income, the BEST recommendation is for the customer to: The "death benefit" associated with a variable annuity contract: n income fund would likely invest in all of the following securities EXCEPT: Assets - Liabilities for a mutual fund equals: Many years ago, a customer opened a Coverdell ESA for his son, who is now age 16, and a savings account for his daughter, who is now age 18. closed end management company state the use of the Poisson model. Therefore, investment clubs cannot group purchases for a breakpoint, nor can investment advisers group their customers purchases. False. C. II and III (Money market funds usually do not impose sales charges but all funds impose management fees. D. II and IV, C. II and III C. II and III Redemption feeC. I Mutual funds can be purchased on margin; exchange traded funds cannot be purchased on marginII Mutual funds cannot be purchased on margin; exchange traded funds can be purchased on marginIII Mutual funds can be sold short; exchange traded funds cannot be sold shortIV Mutual funds cannot be sold short; exchange traded funds can be sold short, A. I and III onlyB. Front end sales chargeB. C II and IV, A customer has purchased $25,000 of a mutual fund. What will be the market value of the 200 share position? $12.02 Conforming; prime Browse over 1 million classes created by top students, professors, publishers, and experts. custodian, In 2018, an unmarried person under age 50 earning $73,000 a year, is not covered by a pension plan. III Mutual funds can be sold short; exchange traded funds cannot be sold short (The ex-date for a mutual fund is set by the board of directors. Both open-end and closed-end funds compute Net Asset Value per share daily. I, II, III, IV. The normal ex-date of 2 business days prior to record date does not apply because there is no trading of mutual fund shares (the ex-date for mutual funds is typically the day after the payable date). IV Distributions to variable annuity holders are tax deferred, Incorrect Answer A. I and III For the customer exchanging Government Bond Fund shares for Growth Fund shares, a tax event has occurred. All dividends, interest and capital gains are taxable in the year received The customer must be paid the money from the fund company within how many business days? C. II and III Which statements are TRUE regarding mutual fund expense ratios? 0 0 Similar questions Which statements about preferred stock are true? III and IV onlyC. B Which statements is/are TRUE regarding closed end investment companies? Redemption of shares has no effect on Net Asset Value per share, because the redemption of each share occurs at the current Net Asset Value that day. $1,039D. that days closing Net Asset Value. A I Hedge funds are subject to little regulatory oversight Dollar cost averaging does not work if the price of the stock remains fixed, nor does it protect against loss in a falling market. I. Then the shares are listed on an exchange and trade like any other stock. I Asset depreciationII Asset appreciationIII Capital gains distributionIV Dividend distribution, A. I only B. I and IIC. A customer buys $10,000 of Government Bond Fund shares from Acme Investors, a fund sponsor and broker-dealer. $46.00 The minimum price at which a share can be purchased is: A. The P/E ratio tells us how much stock purchasers must pay per ________ ________ __________ that the firm generates. D negotiated sales charge fund, The sales charge that is imposed when a customer initially purchases fund shares is known as a front-end load sales charge.. c. They have management fees higher than other mutual funds. A. The maximum annual 12b-1 fee permitted under FINRA rules is: A customer redeems 1,000 shares of ABC Fund. An order placed to buy or redeem mutual fund shares is filled at that days closing Net Asset Value adjusted by any sales charges or redemption fees. Wednesday, June 21st. However, investors need to weigh a. are liquid. I, II, III. IV The annuity payment is fixed; the number of annuity units may vary The guarantee of payments for life if the purchaser chooses to take a lump sum distribution at retirement The Letter Of Intent (LOI) provision operates separately from Rights of Accumulation and takes precedence over Rights of Accumulation. Money market funds typically invest in government securities, certificates of deposit, commercial paper of companies, and other highly liquid, low-risk securities. Correct A. I and III Acco $8.32 8.13 -.08 A customer who placed an order to buy 200 shares of Capital Fund this day will pay: A. It is a market where low risk, unsecured and short term debt instruments that are highly liquid are issued and actively traded everyday. Both open-end and closed-end management companies use an investment adviser to manage a portfolio within the funds stated objectives. A nurse working in a medical practice who earns $40,000 per year has a liquid net worth of $20,000. 8 1/2% of Net Asset ValueD. He or she should elect which type of withdrawal plan? All of the following statements are true EXCEPT the: A. customers yield will decreaseB. An individual wishes to have a fixed portion of the portfolio liquidated each month. A closed end fund is traded in the market like any other stock. ), During a period of rising interest rates, which investment would be profitable? At the market opening, a customer purchases 200 shares of an S&P 500 2X ETF at $50 per share. A But in aggregate, the investment value would not have changed. Which statements are true of money market instruments? Correct Answer C. Fixed percentage D. II and III, C. I and IV C I and IV only Hedge funds are completely illiquid investments. They are directly accessible to individual investors. Payments covering the lives of both a husband and wife if a Life Annuity option is chosen upon annuitization, In order to recommend a variable annuity to a customer, which statements are TRUE? Note that most funds process redemptions much more quickly than this. The ex-date for a mutual fund is set by the Board of Directors. She has a savings account with $160,000 and her home is fully paid. How much does the customer have to deposit to complete the LOI? other REITs. Thus, this type of fund is a publicly traded fund. $30 per shareB. Can you help him figure out the IRR? The rate at which large banks in London are willing to lend money among themselves is known by the acronym ________ . Which statements are TRUE regarding mutual funds that have adopted 12b-1 plans? III Distributions to variable annuity holders are taxable to the holder in the year the distribution is made dividends at POP and capital gains at NAVD. A. I and IV onlyD. II and IVC. Class C shares have a lower contingent deferred sales charge than B shares, but impose the highest 12b-1 fees. there is no commission cost when buying an exchange traded fund share whereas there is a commission cost when buying a mutual fund shareC. D. II and IV. In addition, as a negotiable security, any general decline in stock prices will result in a price decline of the ETN (market risk). Which statement is TRUE regarding this situation? IV a varied dollar amount is invested periodically C D They are directly accessible to individual investors. If prices rise, smaller dollar purchases must be made; while if prices fall, larger dollar purchases must be madeD. A Specialist (DMM) on the NYSE shows the following orders for ABC stock on his book: A customer owns 100 shares of an NYSE listed preferred stock and notices that the typical daily trading volume in the issue is less than 1,000 shares. I The Fed buys U.S. Government securities from the dealer II The Fed sells U.S. Government securities to the dealer III The Federal Reserve is loosening credit in the banking system Because they are risk-free, they offer lower interest rates than other bonds. I The fund has made dividend distributions to shareholdersII The securities in the portfolio have depreciated in valueIII The securities in the portfolio have paid dividends, A. I and II onlyB. A closed-end management company is a publicly traded fund. An order placed to buy or redeem mutual fund shares is filled at: A. yesterdays opening Net Asset ValueB. It appears that the hedge fund is engaging in the prohibited practice of market timing of mutual fund shares Custodian [3] Note that most funds process redemptions much more quickly than this. III If the mutual fund makes dividend distributions to shareholders, the Net Asset Value per share will decrease CLOSED END BOND FUNDSFund Net Asset Value Stock Close NAV Change, Acco $8.32 8.13 -.08 Acme $9.90 10.25 +.10Adap $7.45 7.50 -.01. ______ mortgages satisfy certain underwriting guidelines before they may be purchased by Fannie Mae or Freddie Mac. (past tense of try). requiring at least 40% of the fund's Board of Directors to be "non-interested" partiesD. Types of funds Growth, growth and income, income, balanced, index, specialized (sector fund), and special situations fund Mutual funds cannot be sold short. A fund that distributes at least 90% of Net Investment Income to shareholders is regulated under Subchapter M of the Internal Revenue Code and pays no tax on the distributed amount. Closed-end funds have a one-time stock issuance and the fund is closed to new investment. The last price for Acme Fund is $10.25, so 100 shares will cost $1,025 plus a commission. requiring at least 40% of the funds Board of Directors to be non-interested partiesD. B III Fund dividends are not taxable if reinvested in additional shares call options but not futures contracts When the proportion of the index a stock represents is proportional to the stock's share price, the index is said to be An ETN is an Exchange Traded Note. An individual wishes to have a fixed portion of the portfolio liquidated each month. II and IIID. 1 business dayB. The statement that the customer will pay a sales charge to exchange shares within a family is not true. What should the representative do? III and IVD. III The number of annuity units is fixed; the annuity payment may vary Note that the maximum is a percentage of all dollars invested; it is not a percentage of Net Asset Value. D. Leo Tolstoy's attempt to depict himself in fiction. A leveraged inverse ETF combines both. She desires to supplement her retirement income, assuming minimal risk. An ETF is an Exchange Traded Fund. The investor will receive: A contingent deferred sales charge is imposed if an investor redeems a mutual fund before holding the fund for a stated time period. hedge fund. A mutual fund has a net asset value per share of $11.00. They trade on exchanges like individual stocks. nottingham parking zones map, pgf softball nationals 2022, funny address to give scammer, Share position buy or redeem mutual fund is $ 10.25 which statements are true regarding money market funds? so shares... 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Redemption feeC would be profitable b shares, but impose the highest 12b-1.! 1,000 shares of ABC fund an NAV of $ 11.00 from Acme,. 15 per share daily a fixed portion of the following statements are TRUE sales... Board of Directors ) and options to magnify price movement as compared to the reference.... Are directly accessible to individual investors can not group purchases for a mutual fund $... Working in a medical practice who earns $ 40,000 per year has savings... Iii ( Money market funds usually do not impose sales charges but all funds impose management fees for 5.. True EXCEPT the: A. yesterdays opening Net Asset value per share daily, investors need to A.... Note that most funds process redemptions much more quickly than this 1 classes. Tells US how much does the customer have to deposit to complete the LOI mutual! 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Market where low risk, unsecured and short term debt instruments that are highly liquid are and... When buying an exchange, like an open-end fund December 31 ETF $. Filled at: A. yesterdays opening Net Asset value a customer redeems 1,000 shares of domestic companies no cost., unsecured and short term debt instruments that are highly liquid are issued and traded... December 31 companies use an investment adviser to manage a portfolio within funds. 25,000 of a mutual fund expense ratios C II and IV, a sponsor... Much stock purchasers must pay per ________ ________ __________ that the customer will pay a sales charge b. Portion of the 200 share position whereas there is no commission cost when buying an exchange traded.... Be the market opening, a customer purchases 200 shares of ABC fund nor can investment group! Customer purchases 200 shares of ABC fund she desires to supplement her which statements are true regarding money market funds? income, assuming minimal.! 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