Flashcards
A non-exempt security must be registered prior to sale.
These options apply to the cash value of a lapsed life insurance policy. Options available are to take the cash value in cash, use it to purchase extended term insurance, or reduced paid-up insurance.
Non-fungible tokens (NFTs) are digital assets that reside as code on a blockchain, often, but not exclusively, on the Ethereum blockchain. When an investor buys an NFT, they buy ownership of that particular bit of alphanumeric code associated with whatever has been tokenized. NFTs can be digital representations of artwork, a video, music, or even a tweet. Each NFT is minted by an issuer or creator and bought and sold in primary and secondary marketplaces, generally using cryptocurrency. Each NFT is unique, making the tokens “non-fungible,” meaning an investor can’t exchange one NFT for another just like it, as can be done with dollars or Bitcoin.
Generally, REITs are publicly traded on a financial exchange just like stocks; however, some REITs are not publicly listed. Because non-traded REITs are not traded in the secondary market, they are much more illiquid than their publicly listed counterparts. REITs that are not publicly listed are referred to as non-liquid or non-traded REITs. Non-traded REITs, although not publicly listed, must still be registered with the SEC. They also must still make regulatory filings as well, including quarterly and annual financial reports. Non-traded REITs have an expected investment life, typically 7-10 years.
Generally, REITs are publicly traded on a financial exchange just like stocks; however, some REITs are not publicly listed. Because non-traded REITs are not traded in the secondary market, they are much more illiquid than their publicly listed counterparts. REITs that are not publicly listed are referred to as non-liquid or non-traded REITs. Non-traded REITs, although not publicly listed, must still be registered with the SEC. They also must still make regulatory filings as well, including quarterly and annual financial reports. Non-traded REITs have an expected investment life, typically 7-10 years.
An insurance company that is not licensed to operate within a state.
In a noncontributory plan, the employee does not pay any of the premium, the employer pays 100% of the premium. In a noncontributory group, the participation percentage is 100%. 100% of eligible employees must be enrolled.
Nonissuer transactions are secondary market transactions, shareholder to shareholder.
A life insurance policy that does not grant the policy owner the right to policy dividends. Nonparticipating policies are issued by stock insurers.
Nonqualified plans do not have to follow ERISA. Deferred compensation is an example of a nonqualified plan. Nonqualified plans are discriminatory.
Nonqualified plans do not follow ERISA. They are retirement plans offered to highly paid executives. Deferred compensation is a nonqualified plan.
A nonqualified stock option is a stock option that an employer may grant to its employees. With an NSO the difference between the current market price at the time of exercise and the strike price is reported as wages on the employee’s and the employer’s tax return.
Nonsystematic risks are risks related to the actual investment itself. Also called unsystematic risk, it can be reduced through diversification. Business risk, credit risk, legislative risk, and regulatory risk are all types of nonsystematic risk.
A normal yield curve is an upward sloping curve. Normally, short-term debt pays the lowest yield, mid-term a bit higher and long-term pays the highest yield. Normal yield curves are also called positive yield curves.
NASAA was founded in 1919 in Kansas. It is the oldest investor protection organization. Its members include securities Administrators from over 65 states, territories, and districts in the United States. The Series 63, 65, and 66 exams are written by NASAA and administered by FINRA.
A note is a short-term debt instrument, maturing in five years or less.
Notice filing is required at the state level when an issuer that has previously sold securities will be selling more securities across state lines. Registration by notice filing is also called registration by filing. Federally covered advisers are also required to do notice filings in each state in which they do business, paying fees at the state level in addition to their federal fees.
A requirement that describes the policyowner’s obligation to provide notification of loss to the insurer within a reasonable period of time.
The NYSE is the New York Stock Exchange. The NYSE has a physical trading floor. Historically trading was conducted by the specialists at auction. Today the NYSE is a hybrid marketplace, with trading occurring both electronically and on the floor. The NYSE is the largest stock exchange in the United States.
An odd lot involves the trading of fewer than 100 shares or five bonds. Odd lot traders are small investors.
OEX is shorthand for the S&P 100 stock index. OEX index options trade on the Cboe.
Under the Uniform Securities Act an offer includes any attempt to solicit a purchase or sale of a security for value.
For an insurance policy to be a legal contract it must include four elements. C – O – A – L. O stands for offer. In general, the applicant makes the offer when they fill out the application and submit the first premium payment.
The offering price of an open-end mutual fund share is net asset value per share plus the sales charge. The offering price is also known as the ask price. When it is a no-load fund the nav per share is equal to the offering price.
Every broker-dealer must have at minimum one OSJ. The OSJ is where the principal works. The OSJ is responsible for the supervision of the activities of the associated persons at the branch offices of the member firm.
The official notice of sale is published by a municipality inviting investment firms to submit competitive bids for an upcoming bond issue.
An official statement is the equivalent of a prospectus for a municipal issue.
The acronym for social security, sometimes seen as OASHI.
An omnibus account is an account opened for an investment adviser or a broker-dealer for the benefit of their customers. The carrying firm does not know the individual customers’ names or holdings.
An open-end investment company is a mutual fund company that is managed according to a specific investment objective and continuously offers new redeemable shares in the primary market.
The total number of options currently outstanding in a series. This includes only options that have not been exercised, closed out, or allowed to expire.
The Federal Reserve engages in open market operations, the buying and selling of U.S. government securities, to control the money supply. When buying securities, they are injecting cash into the economy, to fight a recession. When selling securities, they are pulling cash out of the economy, in an attempt to control inflation.
An opening purchase consists of the purchase of a call or a put. To close an opening purchase the investor would engage in a closing sale.
An opening sale consists of the sale of a call or a put. To close an opening sale the investor would engage in a closing purchase.
There are many ongoing expenses related to the day-to-day running of a business, these expenses are referred to as operating expenses.
The option agreement is a form that the customer must sign and return to the broker-dealer within 15 days of being approved for options trading. If the form is not returned, the client will not be able to open any additional positions until it is returned. The options agreement requires the client to abide by options rules, including market position limits and exercise limits.
The holder of an option has the right to buy or sell a security at a predetermined price for a period of time, usually nine months.
The Options Clearing Corporation is the guarantor of all listed options. They issue standardized options contracts.
The Options Disclosure Document is a document that must be given to all options trading clients, at the opening of the account. It is written by the OCC. It includes an explanation of the risks and rewards of investing in options.
The order ticket contains the customer’s instructions regarding a securities transaction. Information that is included on an order ticket includes the customer’s name and account number, description of the security, type of order (buy, sell, short), and any price qualifications (such as stops or limits). The order ticket is also sometimes referred to as the order memorandum.
Ordinary income includes earnings other than capital gains.
The age of the insured when they originally purchased the life insurance policy.
An OTC margin security is a security that does not trade on an exchange but that the Federal Reserve Board has approved for margin trading. The Fed publishes a list of marginable securities.
The OTC market is a negotiated market. Both listed and unlisted securities trade in the OTC market. Municipal and U.S. government securities also trade in the OTC market.
A term rider, covering a family member other than the insured, attached to a whole life policy covering the insured.
An options contract is out-of-the-money when it does not have intrinsic value. When an option is out-of-the-money the owner of the option cannot exercise the option. A call is out-of-the-money when the market price is below the strike price. A put is out-of-the-money when the market price is above the strike price.
Once the stock is sold and in the hands of the public, the stock is outstanding. The total of a company’s outstanding stock is equal to issued stock minus any treasury stock that is held by the company. A company’s market capitalization is determined by taking the outstanding stock and multiplying it by the current market price.
Overlapping debt occurs when the same taxpayers cover municipal debt that is issued by more than one taxing authority or district.
The owner of a life policy has the right to pay the premium, the right to select and/or change the beneficiary, the right to take a loan, and the right to choose a non-forfeiture option (such as cash surrender). The owner may or may not be the insured. The owner does not have the authority to change a policy provision.
This event occurs when a life insurance policy will not require any further premiums to keep the coverage in force.