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44 Cards in this Set
- Front
- Back
1. Corporate Bond
2. US Treasury Bond 3. Municipal Bond These are all types of bonds: T/F? |
1. Corporate Bond
2. US Treasury Bond 3. Municipal Bond Are all types of bonds. |
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All types of treasury bonds: T/F?
1. Treasury Bills (T-Bills) 2. Treasury Notes (T- Notes) 3. Treasury Bonds (T-Bonds) |
True
1. Treasury Bills (T-Bills) 2. Treasury Notes (T- Notes) 3. Treasury Bonds (T-Bonds) |
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True or False: With zero-coupon bonds, investors usually purchase these bonds at a deep discount.
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True
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True or False: An attractive feature of a Muni-bond is the interest is generally free from federal income tax.
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True
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Bonds are rated with numbers like 32: True or False?
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False. They're rated with letters, e.x: AAA
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True or False: As interest rates rise, bond prices move higher.
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FALSE
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ABC Company Bonds are trading on the open market. Currently the market yield rate or YTM is 8.5%. The coupon rate on the ABC Bonds are at 8.25%. These bonds mature in 10 years. What would be the price quote of these bonds:
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$99.75
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True or False: If you find a bunch of Bearer Bonds in your great-grandfather’s closet, you should not throw them away, since they may be worth a considerable amount of money.
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TRUE!
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True or False: If you buy a bond for $989 (price quote of $98.90), you have bought the bond at a premium.
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FALSE.
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True or False: Savings bonds are not marketable.
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True. You can't sell them.
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A Mutual Fund that raises money only once and offers only a fixed amount of shares is called a:
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Closed-end Fund
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Main Categories of Mutual Funds:
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1. Stock Funds
2. Money Market Funds 3. Bond Funds |
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True/False: Mutual Funds are a way to invest in variety of stocks and/or bonds with no additional fees or charges.
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False.
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NAV:
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Net Allocation VALUE
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1. Front-end load
2. Back-end load 3. Contingent deferred sales change 4. Exchange fee 5. All of the above are fees that may be charged by the mutual fund: T/F? |
True:
1. Front-end load 2. Back-end load 3. Contingent deferred sales change 4. Exchange fee |
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12-B1 Fees are the fees paid by a mutual fund for marketing, distribution expenses and certain shareholder services: True/False?
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True.
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True/False: The “Junk Ratio” is computed by dividing the value of the fund by the number of shares.
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FALSE. There is no such thing as junk ratio.
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The “NAV” is computed by taking the change in value plus the dividends all divided by the cost of the initial investment: True/False?
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False. The NAV is computed by dividing the value of the fund by the number of shares.
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True/False: The “Yield” or “Income Yield” is derived by dividing the total distribution per share by the price per share.
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False.
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True/False: The report that lists all of the fees of a mutual fund is called “The Prospectus”.
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True.
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Types of 401Ks:
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401, Roth 401, 403, 457
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Contributions are fixed: T/F?
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True.
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Rollover: 401 will NOT follow you from job to job.
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False.
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Define Vesting
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Vesting means that you're at a certain place for a certain time in order to pull the money that the firm has invested in you.
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You pay taxes when you pull money out on a tradition IRA account: T/F?
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True.
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ROTH IRA: You pay taxes up-front and nothing when you pull it out: T/F
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True.
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Percent of taxation when you out money from your IRA before you're 59.5
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10%
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Percent of taxation when you out money from your IRA before you're 70.5
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50%
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First question to ask your HR rep when you start a new job:
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Do you want to participate in a 401K plan?
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403(b) Plan is for ___________
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Charities and Education Entities
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Max dollar amount you could contribute to your IRA account in 2012:
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$5000 and an additional $1000 if you're over 50
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Contributions to IRAs may be tax deductible: T/F?
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True.
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Interest and growth in an IRA account is NOT tax deferred: True/False?
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False! It is tax deferred.
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Fund Yield Equation:
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Distribution Per Share / NAV
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Total Fund Percentage Return Equation:
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Change in Value + Dividends / Cost of Initial Investment
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Define: Load Fund
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Investors pay a commission (sales charge) up to 8.5% every time they purchase shares. This is sometimes called an “A” fund.
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Average Charge for a Load Fund:
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3 - 5% of the Fund
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Define: NO-load Fund
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Investors pay no sales charge up front.
You deal directly with the investment company via 800 numbers or websites, or from discount brokers. |
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The "A" Fund
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Load Fund
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Front End Load Fund:
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The fees are charged up-front WITH the initial investment.
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Back-end Load Fund:
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Charged upon withdrawal of funds (1-5%).
Generally decreases on a sliding scale depending on the number of years shares are held. |
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Define: Management Fee
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Charged yearly (.25%-1.5% average) based on a percentage of the fund’s asset value.
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(Mutual Funds) Expense Ratio:
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The total expenses associated with the management fees & operating costs of the fund
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Classification of Mutual Funds:
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Stock Funds/Equity Funds
Bond Funds Money Market Funds Balanced Funds |