Flashcards
A living trust is a trust that is created while the donor is alive. Living trusts are also called intro vivos trusts
Long is used to describe owning a security.
A long-term capital gain or loss occurs on securities that were held for longer than 12 months.
Coverage for individuals who require assistance with activities of daily living in homes or a nursing facility. Many states require additional training before an agent (producer) can sell long-term care products.
Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living such as dressing or bathing. Long-term care services can be provided at home, in the community, in assisted living, or nursing homes. Individuals may need long-term care services at any age. Medicare and most health insurance plans don’t pay for long-term care.
The long-term disability income policy provides benefits, often a portion of lost income, lasting for an extended time as defined in the insurance policy.
LEAPS are long-term options, good for two to three years.
The amount an insurance company pays on a claim. On a property and casualty policy, physical damage to property or bodily injury, including loss of use or loss of income.
A maintenance call will occur when the client’s equity falls below the minimum requirements. Clients can meet a maintenance call by depositing cash, fully paid securities, or selling securities out of the margin account. A maintenance call is also called a margin call.
In a margin account, FINRA sets ongoing equity requirements. For long accounts, the maintenance requirement is a minimum equity of 25% of the market value long. For a short margin account, the maintenance requirement is a minimum equity of 30% of the market value short.
Dealers make the market. Market making involves a firm buying a particular over-the-counter stock for its own account at its own risk (taking a position).
Managed care is a healthcare delivery system organized to manage cost, utilization, and quality. Managed care may be offered by prepaid health plans, often health maintenance organizations (HMOs). HMOs provide care through a network of providers within a fixed budget. Managed care may also be offered through preferred provider organizations (PPOs). Hallmarks of managed care include provider networks, provider oversight, prescription drug tiers, and utilization management.
Management companies actively buy, sell and trade the securities that are held in the company’s portfolio according to a prescribed investment objective. All mutual funds are management companies. Management companies may be open end funds, closed end funds, ETFs, diversified or non-diversified.
Manager tenure is the length of time that an investment manager has been at the helm of an investment fund.
This disclosure document is designed to remind the client of the risks involved in margin accounts. It must be given to the client as part of the account opening, and again annually.
The margin agreement contains three separate agreements: the credit agreement, the hypothecation agreement, and the loan consent agreement. The margin agreement must be obtained from the client promptly after the initial transaction in the account.
A margin sale involves the purchase of a security with the use of borrowed money. The Federal Reserve Board sets the percentage of the price that the buyer must provide under Regulation T as initial equity, currently, 50% or $2,000, whichever is greater. To buy securities on margin is risky.
Federal Reserve Board Regulation T identifies which securities may be purchased on margin, these securities are called marginable securities. In general, marginable securities include listed securities as well as listed warrants.
The market maker is the dealer side of broker-dealer. The dealer takes an inventory position in a security, making the market.
A market order is an order that will be executed immediately at the best available price.
Market risk is a type of systematic risk. The markets will go up and they will go down. Market risk is the uncertainty about the loss of capital due to changes in the market price of the security. Market risk cannot be reduced with diversification. Diversifying by asset class helps to reduce market risk.
The market value is the price an investor will pay for each share of common stock at any given time. Market value is determined by the laws of supply and demand. Market value is also known as market price.
The fair value or the price that could be derived from current sale of an asset.
Marketability refers to the ease with which a security can be bought or sold. Also known as liquidity risk.
Shorthand for the “Health Insurance Marketplace®,” a shopping and enrollment service for medical insurance created by the Affordable Care Act in 2010. In most states, the federal government runs the Marketplace (sometimes known as the “exchange”) for individuals and families. On the web, it’s found at HealthCare.gov. Some states run their Marketplaces on different websites.
The markup is the amount added to the lowest current offering price when the broker-dealer is acting as a dealer and trading with a client.
Matched orders are a form of market manipulation where simultaneous trading of a security is done to create the misleading appearance of active trading. Matched orders are prohibited.
A significant misstatement on an application form. If a company had access to the correct information at the time of application, the company might not have agreed to accept the application.
The maturity date is the date on which a company is scheduled to repay the principal of a bond to the bondholder. Corporate bonds mature in up to 30 years.
It is this 1945 Act that exempts insurance from federal law to the extent that it is regulated by state law.
The mean is the average of the set of numbers.
The median is the middle number of the set of numbers.
Insurance program that provides free or low-cost health coverage to some low-income people, families and children, pregnant women, the elderly, and people with disabilities. Many states have expanded their Medicaid programs to cover all people below certain income levels.
An organization that collects medical data on life and health insurance applicants for member insurance companies.
A process used by insurance companies to try to figure out a person’s health status when they are applying for health insurance coverage to determine whether to offer you coverage, at what price, and with what exclusions or limits.
Health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.
A federal health insurance program for people 65 and older and certain younger people with disabilities. It also covers people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
A type of Medicare health plan offered by a private company that contracts with Medicare to provide an individual with Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. When a person is enrolled in a Medicare Advantage Plan, most Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
A program that helps pay for prescription drugs for people with Medicare who join a plan that includes Medicare prescription drug coverage. There are two ways to get Medicare prescription drug coverage: through a Medicare Prescription Drug Plan or a Medicare Advantage Plan that includes drug coverage. These plans are offered by insurance companies and other private companies approved by Medicare.
Medicare supplement insurance (Medigap) is extra insurance an individual can buy from a private health insurance company to help pay the out-of-pocket costs in Original Medicare. Generally, an individual must have Original Medicare – Part A (Hospital Insurance) and Part B (Medical Insurance) – to buy a Medigap policy.
Mining refers to complex mathematical processes used to develop new coins, such as bitcoin, or verify new transactions. Mining usually involves many computers working to solve complex mathematical calculations on a block of transactions. Once solved or “mined,” the new coin is added to the blockchain.
A false statement of a material fact, accidental or intentional.
The falsification of the applicant’s birth date or gender on the insurance application. When discovered, the coverage will be adjusted to reflect the correct age or gender according to the premium paid in.
Master Limited Partnerships (MLPs) are publicly listed limited partnerships that trade on a national securities exchange, therefore they are typically more liquid than traditional limited partnerships. Most MLPs have general partners and many limited partners (the investors). The general partners manage the day-to-day operations, while the limited partners purchase shares in the MLP and provide capital in return for cash distributions from the entity’s operations. MLPs primarily focus on natural resource-related activities, including oil, gas, coal, timber, and certain ways of transporting commodities.
The mode is the number that occurs most frequently in the set of numbers.
The frequency of premium payment is referred to as the mode of payment. The more often the premium is paid the more expensive it will be due to service fees.
Modern Portfolio Theory is the work of Harry Markowitz. Modern Portfolio Theory states that investments should not be viewed in isolation but in relationship to each other. Modern portfolio theory’s goal is to build the most efficient portfolio. An efficient portfolio offers the most return for a given level of risk or the least risk for a given amount of return. A collection of efficient portfolios is called an efficient frontier.
A MEC is a whole life insurance policy that fails the seven-pay test. When a life insurance policy’s cash value exceeds the premiums paid in the first seven years the policy loses its tax favorability. Any withdrawals (including loans and partial surrenders) taken from cash value accumulation are taxed LIFO (last in, first out – earnings come out first). Earnings are taxable as ordinary income. Additionally, MECs have a 10% penalty for distributions made under age 59 1/2 (premature distributions).
Monetary policy is set by the Federal Reserve. Monetary policy includes buying and selling U.S. government securities through open market operations, setting the target for the federal funds rate, setting the discount rate, and determining banks’ reserve requirements. Monetary policy is designed to control the economy through manipulation of the money supply.
Money laundering involves the conversion of illegally obtained funds into legal tender. There are three stages to money laundering: placement, layering, and integration. Broker-dealers must have Anti-Money Laundering procedures designed to detect this practice.