Because the investor might be able to achieve hedge fund like returns (since the interval fund makes investments in a much broader range of assets such as commercial property, private equity funds, hedge funds, business loans, catastrophe bonds, etc.) Under FINRA rules, the maximum sales charge that may be imposed by a mutual fund is 8 1/2% of the Public Offering Price. A I set by the Board of Directors of the FundII 2 business days prior to the Record DateIII the date on which the funds NAV per share is reduced for any distributions, A. I and IIB. He or she could elect to have a fixed number of shares liquidated each month (Choice A); could elect to have the account liquidated over a specified period of time (for college education) (Choice B); could elect to have a fixed percentage of the portfolio liquidated each month (Choice C); or could elect to have enough shares liquidated so that a specific dollar amount is received each month (Choice D). B. is obligated to buy the stock at the limit price, if one is specified by the customer >$45,000 - $65,000 5 % What is the ending inventory at the end of each month? At the end of the second day, because the index goes up by 5%, the ETF value will decline by 5%. of diamond mining companiesD. III Hedge fund managers are compensated based on a percentage of capital appreciation in the fund B D $11.00 / 100% - 8.5 only capital gains at Net Asset ValueC. Limited partners who form a partnership to make the purchaseD. D It is based on 500 firms. A. is obligated to buy the stock at the current market IV. All of the following statements are true regarding the Federal Funds rate EXCEPT the rate is: A. charged from one Federal Reserve member bank to another member bank B. set by the Federal Reserve C. lower than the discount rate D. computed every business day whereas ______ mortgages are riskier loans made to financially weaker borrowers On that date, the price of the shares is reduced for any distributions. It pays a fixed stream of income without a contractual obligation to make the payments. Acco $8.32 8.13 -.08 coffee on it, making the first digit of the 2-digit IRR unreadable. I, II, III. $10B. A repurchase agreement (repo) is a short-term form of borrowing that involves selling a security with an agreement to repurchase it at a higher price at a later date. D The ex-date for a mutual fund is set by the Board of Directors. Ask price= Bid (NAV) / 100% - Sales charge % Correct B. I and IV In this case, a 5% sales charge is imposed if the fund is redeemed within the first year. Which of the following are true of short futures positions? B may correspond to ownership of a fraction of a foreign share Correct Answer A. asset appreciation is untaxed for both, Section 529 plans are established by the: Multiple select question. During a period of falling interest rates, which investment would be most profitable? This is a violation known as a breakpoint sale. III A fund can achieve high performance for a few years by taking greater risk and then have a period of poor performance 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. Specify a transaction price. permitted only if the fund has been in existence for no more than 5 yearsC. A. setting maximum sales charges on mutual fund purchasesB. The ex-date is the day on which the Net Asset Value per share increases. traded over-the-counter. They are structured as private placement limited partnerships that are only available to wealthy accredited investors. requiring minimum initial fund capital of $100,000 A The best answer is A. IV based on the Standard and Poor's 500 Index B The registered representative advises the customer to invest $8,000 on ABCD fund; $8,000 in DEFF fund; and $8,000 in XYZZ fund; to give the customer complete diversification and reduce risk. A. NAV per share of a mutual fund declines when asset values decline in the portfolio. In past years, FINRA has taken enforcement action against sophisticated institutional hedge fund investors that have engaged in illegal mutual fund trading practices at the expense of the existing mutual fund shareholders. IV Investment in collectibles is permitted I The portfolio of investments is managedII The initial offering of shares is made under a prospectusIII Shares trade in the secondary market at prevailing market prices, A. I onlyB. $46.92 Ask; Redemption Price. Individuals can invest in the money market by buying money market funds, short-term certificates of deposit (CDs), municipal notes, or U.S. Treasury bills. Regularly scheduled investments of the same dollar amount in fund shares will most likely result in a: A. lower average price per shareB. A. growth fundD. C. II and III C. REITs are similar to open-end funds, with shares redeemable at NAV. A. I and II B . Correct Answer B. I and IV 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!). were created to make it easier for foreign firms to satisfy US security registration requirements. I, II, IIID. For the rest of the year, the investor is locked into the investment. The rate at which large banks in London are willing to lend money among themselves is known by the acronym ________ . Unrelated investors cannot join together to aggregate their purchases and get the benefit of a breakpoint. The manager of the fund, not having to worry about redemptions, can make less liquid, more risky investments similar to hedge funds. The normal ex-date of 2 business days prior to record date does NOT apply because there is no trading of mutual fund shares. Browse over 1 million classes created by top students, professors, publishers, and experts. Was this answer helpful? Which statements are TRUE about mutual fund Class A shares? Which are not? money market funds are typically sold without a sales charge (past tense of try). IV Capital Losses, A. I and III any price because this is negotiated in the market. Nitty and Gritty are considering the formation of a partnership to operate a crafts and hobbies store. Correct Answer A. It is typically 1/2 - 1% of assets annually. They can be bought on margin or sold short. ETFs hold the underlying shares of companies included in a stock indexD. Write the articles found in the following sentences. III a fixed dollar amount is invested periodically Note that in the real world, competition among funds has forced sales charges well below this maximum permitted level. Multiple choice question. The last price for Acme Fund is $10.25, so 100 shares will cost $1,025 plus a commission. For example, if an investor has 1,000 shares @ $1 ($1,000 total) in the fund, and the assets appreciate by 10%, then the customer will have 1,100 shares at $1 ($1,100 total). II and III only. a. B annually. It conveys voting power regarding the management of the firm. A II Dividends A Their shareholders have unlimited liability. An individual or corporation making a purchase is considered to be one purchaser and qualifies for the breakpoint. $1,039 plus a commission. Net Investment Income - Distributions to ShareholdersC. Thus, closed-end funds can trade at NAV; below NAV; or above NAV. IV Hedge fund managers can only be compensated based on a percentage of assets under management However, all mutual funds charge an annual management fee, which is an annual expense against the funds investment income. On this date, the Funds shares are reduced by the value of the distribution. $750 The Act does not set sales charges for mutual fund purchases - these are set by FINRA - which allows a maximum sales charge of 8 1/2%. Closed-end funds have a one-time stock issuance and the fund is closed to new investment. Which statement is TRUE regarding this situation? 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. ), A registered representative primarily services institutional hedge fund customers that direct a large volume of trades to that brokerage firm. Funds in the bank's reserve account are called ______ ______ . On that date, the price of the shares is reduced for any distributions. A tax deductible contribution of $11,000 ($5,500 each) is permitted. Multiple select question. B. I and IV The owners of the corporation manage the company themselves. Rights of AccumulationC. registered fundC. (a) Justify $12,000 x .90 = $10,800. Note that most funds process redemptions much more quickly than this. C. an account of Ivan Ilyich's perception of his impending death. A random sample recorded the amount of money and potential taxable income of the emigrants from New York. A 200% Leveraged Dow Jones Industrial Average Index ETF would be expected to move: I up 50% in price when the DJIA moves up 100%II up 100% in price when the DJIA moves up 50%III down 50% in price when the DJIA moves down 100%IV down 100% in price when the DJIA moves down 50%, A leveraged ETF uses borrowing (margin) and options to magnify price movement as compared to the reference index. As the fund has earnings, and Total Assets increase, the shareholder receives more shares worth $1.00 each. If a customer is close to a breakpoint, it is a violation to not make the customer aware that putting in the additional funds to reach that level will result in a lower sales charge. Both Treasury bonds and Treasury notes are Issued with maturities ranging from 10 to 30 years. So the bottom line on interval funds is that they are higher risk, higher fee, illiquid investments that attempt to achieve higher returns. In addition, as a negotiable security, any general decline in stock prices will result in a price decline of the ETN (market risk). Mutual fund (open-end management company) shares are newly issued by the fund to any purchaser. I ETNs are a type of investment company offeringII ETFs are a type of investment company offeringIII ETNs are a debt instrumentIV ETFs are a debt instrument. Which of the following statements are true about public corporations? The production manager thinks the preceding assumption is too optimistic and decides to go with level production to avoid being out of merchandise. Capital gains taxes must be paid if they are sold for more than the investor's purchase price. B Which statement is TRUE regarding money market funds? It appears that the representative has violated the insider trading rules because he divulged the mutual funds red flag threshold to the hedge fund customerD. I and IIC. 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