Weekend Before SIE Notes
Term Bond: A bond issue where every bond has the same interest rate and maturity.
Corporate bond issues and US Government bond issues are typically an example of this
bond.
Serial Bond: A bond issue with different maturities and different interest rates per
maturity. Most municipal bond issues and corporate equipment trust certificates are serial
bonds.
Series Bond: A bond issue where the bonds have the same maturity but different dates of
issuance. Long-term construction projects where all the money is not needed at once. Total
interest cost to the issuer is reduced.
● Thetypicalcallprotectionperiodfornewissuesofbondsis10years.
T-Bill Weekly
Auction | All Other Treasury Debt Monthly Auction
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Foreigncurrenciestradeintheinterbankmarket.
Tradingofforeigncurrencyoptioncontractstakesplaceonthe
Philadelphia Stock Exchange.
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TradingoflistedequityoptionstakesplaceontheCBOE,AMEX,PHLX,
PAC and ISE.
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TradingofbankeracceptancestakesplaceintheOTCmarket.
Order Ticket must include size of transaction, execution price if the order is not a
market order, and the customer account name/number.
Intrastate Offering Rule 147: Resale of the securities is permitted within that state
immediately following the offering but resale outside that state is prohibited for the
6 month period following the initial offering.
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AnygiftintheUGMAisirrevocable,oncegiventotheminoritcannotbe taken
back.
● Acorporatesecuritywithatleast5yearstomaturityisanon-callable funded
debt. The term funded refers to corporate debt that is considered a part of
company’s permanent long term financing. Included is all corporate debt with
5 years or more to maturity.
● Rule144allowsthesale,every90days,ofthegreaterof1%ofthe outstanding
shares of that company; or the weekly average of the prior 4 week’s trading
volume.
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BidandNAVarethesametermsforinvestmentcompanyshares.Askis the same
thing as POP.
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Moneysupplyisaleadingeconomicindicator.PersonalIncomeLevels| GDP |
Employment levels are all coincident or current indicators.
● Ifachildgetsascholarshipfor529Plan,thenfundscanbewithdrawn from the
account up to the amount of the scholarship and used for another purpose.
They are only subject to ordinary income tax on the build-up and there is no
10% penalty tax.
● IndustrialDevelopmentBondareguaranteedbythecorporatelessee.
● Acopyofthememberfirm’sBusinessContinuityPlanmustbeprovided
to each customer at account opening.
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Advaloremtaxesdonotbackspecialtaxbonds.Advaloremtaxesback
GO bonds. The definition of a special tax bond is one which is not backed by
ad valorem taxes, but rather by another tax source (such as excise, sales and
income taxes).
A broker-dealer must check each new customer’s name against the Specially
Designated Nationals List to comply with anti-money laundering regulations.
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Moneymarketinstrumentsareoneofthebestinvestmentsduring inflationary
times as they have no purchasing power risk.
● RegulationTdefines3typesofaccounts:MarginAccount,Cash Account, and
Arbitrage Account (short against the box). Discretionary account is defined by
the regulations of the SROs such as FINRA.
● Themostcommonmaturityforcommercialpaperis30days.
● Thedifferencebetweenthe30yearBond(higher)and30yearTips
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(lower) is the expectation of the inflation rate.
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Intangibledrillingcostsare100%deductibleasdrilled,andrepresentthe costs
of drilling holes in the ground to find oil and gas reserves. These costs include
drilling equipment rental fees, labor, fuel, materials etc. Once the holes are
drilled, there is no residual value to these costs, hence they are termed
“intangible”.
● MaximumSalesChargeofNAVis8.5%fornon12b-1funds.For12b-1 funds it is
7.25%. Maximum 12b-1 fee is not allowed to exceed 0.75% in this case. Noload funds, can only charge a 12b-1 fee up to 0.25%.
● JumboCertificatesofDepositinamountsabove$250,000are guaranteed by the
issuing bank since any amount over $250k is not guaranteed by FDIC.
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SeriesEEbondsareredeemedatparplusinterestearned.
Theex-dateforamutualfundissetbytheBoardofDirectors.
● LGIPsarelocalgovernmentinvestmentpoolsthatallowmunicipalentities to
invest their money in a variety of securities.
● Arrangingyieldsfromhighesttolowest,itsCorporateBondFund>US
Government Fund > Municipal Bond Fund. The yield on munis is much lower
because they are often entirely tax free, which is reflected in the yield.
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