Series 66 - C's
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The companies' stock price is affected by normal business cycles. Stock prices are expected to rise quickly and to decline quickly with changes in the economy.
A custodian is a Fiduciary who manages a UGMA/UTMA account for the benefit of a minor. Only one custodian and one minor are allowed per account.
A standard numbering system used to identify security positions.
For a bond, this is defined as the Annual Interest Paid divided by the Market Price of the bond. For a stock, it is defined as the Annual Dividend Paid divided by the Market Price of the stock. It represented the actual income rate of return to the investor.
Current Assets divided by Current Liabilities. It measures the liquidity position of a corporation.
Describes to a margin customer how interest is computed in the account. A broker/dealer may have the customer sign the Credit Agreement to demonstrate that he understands how credit will be extended in the account.
A situation where a customer owns a security and sells a call option contract against the stock position.
Covered Call Option
The cost basis of stock purchased by a customer is the market value of the security plus any commissions paid. If the customer's sales proceeds exceed his cost basis, a capital gain is realized.
Cost Basis (Stock)
Corporate By-Laws which can be amended by the Board of Directors authorize a corporation to open a cash or margin account with a broker/dealer. A Corporate Resolution allows certain employees to act on behalf of the corporation.
Corporate By-Laws (Resolution)
A ____ ___is a debt instrument (company is borrowing money from investors) which generally has a fixed rate of interest which is paid semi-annually. Par or principal value is $1000. Since corporate bonds pay a fixed rate of interest semi-annually they are also referred to as a fixed income security.
Refers to registration of a security at the state level by a concurrent registration filing with the SEC. When the SEC or Federal registration becomes effective, the state registration becomes effective as well.
Published monthly by the U.S. Government and measures the average change in prices for selected goods and services in selected U.S. cities.
Consumer Price Index
Defined as investing a fixed amount of dollars of a portfolio's assets in equity securities regardless of stock prices.
Constant Dollar Investment Plan
The Consolidated Tape operates with Network A and Network B. Network A covers last sales on NYSE listed securities. Network B covers last sales transactions on the American Stock Exchange and certain Regional Stock Exchange issues.
Tells the customer the complete details about his trade. A confirmation must be sent out to a customer on a securities transaction by the next business day after trade date.
Available to investment companies and limited partnerships where the shareholders or limited partners pay the taxes and the entity (investment company or limited partnership) acts as a conduit.
Conduit Tax Treatment
An individual registered with the regulatory organization who approves option advertising and sales literature. The CROP is responsible for the broker/dealer's total compliance program with respect to options.
Compliance Registered Options Principal
Represents part ownership in a corporation. Owners of common stock have certain rights, including the right to vote, the right to receive declared dividends, and the right to sell the shares.
Commercial paper represents an unsecured promissory note of a corporation. The notes are normally issued at a discount and redeemed at face value. These notes are not guaranteed by the FDIC and may be sold directly by the issuer.
A securities offering whereby part of the shares are from unissued shares of the corporation and part of the shares are from officers and directors.
Combination Primary and Secondary Offering
Items such as diamonds, paintings, rugs, antique coins or precious stones. IRA funds may NOT be used to invest in collectibles.
A Collaterized Mortgage Obligation (CMO) is a mortgage-backed bond secured by a pool of mortgage loans. CMO's separate mortgage pools into different maturity classes called "tranches". The tranches generally pay fixed rates of interest at regular intervals and may mature in two, five, ten, or 20 years. Most CMO's carry a AAA rating and Interest payments to investors are subject to Federal, state, and local taxes. An investor seeking a short-term investment may purchase a two-year tranche, while a longer term investor may purchase a 20-year tranche.
Collaterized Mortgage Obligation (CMO)
Type of investment company that has a fixed number of shares outstanding. They are traded over-the-counter or listed on a national securities exchange.
Refers to options of the same type on the same underlying security. A put and call would not be in the same class.
To have a legal obligation under the body of laws of a state or nation dealing with the rights of private citizens.
Filed with the state and describes the operation of the Limited
Partnership. It states the name of the General Partner and the names of all Limited Partners. The General Partner is responsible for the debts of the Limited Partnership, while the Limited Partners can only lose the amount of their investment in the Limiter Partnership.
Certificate of Limited Partnership
The ___ ___for a corporation is defined as Net Income plus depreciation or Net Loss plus Depreciation.
Cash Assets Ration = Cash and Equivalents divided by Current Liabilities.
Cash Assets Ratio
A securities account in which the customer pays for a purchase of securities in full. The entire risk of the market value of the securities is the customer's.
Markets where long-term debt and equity instruments are traded. Capital Markets consist of stock exchanges and the over-the-counter market. Capital Market instruments include items such as equities (common and preferred stock), corporate, municipal and U.S. Government bonds and mortgages.
Realized on the sales of a capital asset such as a security. A capital gain is realized when the sales proceeds from a capital asset exceed the
cost basis. A capital loss is realized when the sales proceeds are less than the cost basis.
Capital Gain or Loss
A distribution made by an investment company from long-term capital gains realized by its portfolio.
Capital Gain Distribution
A fixed time period during which a bond may not be called by the issuer. It is valuable to an investor when interest rates are falling since the issuer cannot call the bond away from the investor. An investor interested in call protection would not purchase a premium bond callable at par.
An option spread in which the strike prices are the same and the expiration months are different. Assume a customer puts on the following spread position:
Sell 1 ABC April 40 call @ 5
Buy 1 ABC July 40 call @ 8
This is a ___ ___ since the strike prices are the same and the expiration months are different.
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