Dealer correct answers Transacts business for its own account
Broker correct answers Transacts business for others
CRD correct answers Provides registration info regarding Bkr/dlrs and registered persons
Non-registered person correct answers Cannot solicit order for new accts, provide inve...
Series 26 || with Complete Solutions.
Dealer correct answers Transacts business for its own account
Broker correct answers Transacts business for others
CRD correct answers Provides registration info regarding Bkr/dlrs and registered persons
Non-registered person correct answers Cannot solicit order for new accts, provide investment
advice, make recommendations, give pricing info, or execute transactions
ADV (Investment Adviser Registration) Part I correct answers Name, # of employees,
background of partners, how the adviser will maintain assets.
ADV (Investment Adviser Registration) Part II correct answers Can be given directly to clients
to provide disclosure about the adviser's business
Regulatory Element correct answers 2 year anniversary of intial registration, every 3 years after
that. Rep will become inactive if not taken within 120 days of anniversary.
If the rep was subject to disciplinary action, must take again within 120 days of that action.
There is no requirement to retake the Series 6 Examination.
Firm Element (by bkr/dlr) correct answers Yearly. Investment risks, sales suitability, regulatory
requirements. Each firm must demonstrate to the regulators that at least once a year they have
analyzed and prioritized the training needs of their covered personnel and developed a written
training plan based on that needs analysis.
Prospectus correct answers Given to clients at the time of the sale or preceding the sale. Includes
mutual funds, variable products, UIT, and face-amt certificates. May not contain information
more than 16 months old. A prospectus may be delivered electronically as a standalone
document.
Must be filed with the SEC.
Is required by the registration provisions of the Securities Act of 1933.
Must provide full and fair disclosure. This applies to open-end management companies (mutual
funds) and unit investment trusts.
Board of Directors correct answers Protects shareholder interests. Select Investment
Policy/Provider, Underwriter, Custodian, Transfer Agent. When divs/caps are paid. 12b-1 fees.
Majority must be independent directors.
Shareholders must approve: correct answers Fund investment policy, diversified vs. non-
diversified. Must approve all Bd of Directors changes except divs/caps.
Custodian correct answers Safeguards the fund's cash and securities.
Transfer Agent correct answers Recordkeeping Functions. Distributes Caps/Divs
, Underwriter correct answers Sells shares directly or indirectly (via dealers) to the public. Must
be under contract and registered with the SEC.
12b-1 fees correct answers Deduct marketing costs from the actual fund assets
Shareholder Reports correct answers Annual and Semi-annual. Most current information.
Diversified Funds correct answers No more than 5% invested in any one company. If the
percentage changes (say 5 to 8%), no updates in the portfolio are required.
Corporate Bond Funds correct answers High yield, high risk
U.S. Gov't Funds correct answers Invest in Treasury securities. Interest-Rate Risk.
NAV correct answers Total net assets divided by shares outstanding. Computed once daily.
Dividend payouts decrease the NAV even if all holders choose to reinvest. Each client owns
more shares, but at a lower NAV. The NAV falls since the assets remain the same while the
outstanding shares increase.
UIT and mutual funds always redeem at NAV.
Daily as of the close of the New York Stock Exchange.
Front End Sales Charge (Class A) correct answers Sales Charge divided by Offering Price. Small
or no 12b-1 fees. Reduced sales charges for large purchases.
Back End/CDSC (Class B) correct answers Usually no up-front sales charge. Higher 12b-1 fees.
CDSC lowers and shares convert to A after extended periods of time. A confirmation should be
sent disclosing that a sales charge may have to be paid upon redemption.
Watch for large purchases in B shares on test.
Class C Shares correct answers Usually 1% sales charge plus annual 12b-1 fee (usually equal to
1% of fund's assets)
Letter of Intent correct answers Lower sales charge without depositing all of the money
immediately.
Rights of Accumulation correct answers Add all past purchases within the same fund complex.
Front-end load plan correct answers Up to 50% of the first year's payments can be used for a
sales charge. Max of 9% sales charge over life of plan. (2 prospectuses)
Spread-load plan correct answers 20% sales charge first year and can only average 16% over
first 4 years. (2 prospectuses)
Cancel during 45 day free look correct answers Shares current NAV plus all sales charges.
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