This module, which contains questions and answers regarding NASD Series 7 topics covered in the NASD exam. Get the NASD exam preparation you need.
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These flashcards will cover these topics:
A. Customer Accounts & Orders – new accounts, types of customer accounts, custodian accounts, restrictions on new accounts, deceased persons’ accounts, order procedures, regulation of margin accounts, characteristics of margin accounts, margin requirements, calculations involving margin accounts, restricted accounts, industry requirements, SMAs, short sales, rights of lendors, closing out short sales, margin requirements of short sales, regulation of short sales, calculations involving short sales.
B. Investment Environment – liquidity vs. marketability, bull vs. bear markets, long vs. short position, pink sheets, primary market, firm-commitment underwriting, best efforts underwriting, private placement, secondary market, New York Stock Exchange, commission vs. floor broker, specialists, over the counter market, market makers, third market, fourth market, market order, limit order, stop-loss order, odd lots, Investment Company Act of 1940, SEC influence on standard setting, purpose of securities laws, SEC Form S-1, S-2 S-3, S-4 and S-8, Regulation S-X and S-K, Securities Act of 1933 and 1934, proxy statements, Form 8-K, SEC safe harbor rule, Form 10-Q, Form 10-K, purpose of independent auditors’ report, red herring prospectus, shelf-registration.
C. Investment Vehicles – common stock, blue chip stocks, growth stocks, income stocks, cyclical stocks, defensive stocks, interest-sensitive stocks, cumulative vs. noncumulative voting rights, par value, short selling, uptick rule, American depository receipts, dividend dates, stock dividends, stock splits, basic vs. diluted EPS, preferred stock, simple vs. complex capital structures, dilution, anti-dilution, treasury stock method, compensatory stock options, options, put options, call options, option premium, exercise price, intrinsic value, in the money, at the money, out of the money, Black-Scholes option valuation model, straddle, zero cost collar, naked options vs. covered options, American vs. European options, option price, stock warrants, futures contracts, hedging, swaps, types of option plans, stock appreciation rights, maturity matching, reasons for holding marketable securities, liquidity determination of marketable securities, risk and return factors of marketable securities, certificates of deposit, treasury bills, money-market accounts, commercial paper, Federal funds, guaranteed investment contracts, return comparisons, treasury bills, treasury notes, treasury bonds, mortgage bonds, income bonds, agency securities, bankers’ acceptances, repurchase agreements, commercial paper, unsecured credit, corporate bonds, zero coupon bonds, Series E & EE bonds, Series HH bonds, municipal bonds, coupon rate, yield to maturity, convertible bonds, conversion ratio, call provisions, mutual funds, benefits of mutual funds, open-end mutual funds, closed-end investment companies, stock mutual funds, bond mutual funds, balanced funds, global mutual funds, index mutual funds, sector funds, front-end load, back-end load, Class A shares, Class B shares, Class C shares, unit investment trusts, precious metals, futures contracts, long vs. short positions, futures price, spot price, daily limit, derivatives, annuities, advantages of real estate, developed land, undeveloped land, real estate investment trusts, points, calculation of premium or discounts on forward exchange contracts, speculative forward contracts, effect of overvalued exchange rates on exports and imports, determination of exchange rates, spot rate, forward rate, political risk.
D. Investment Risk – definition of investment risk, systematic risks, market risk, exchange rate risk, reinvestment rate risk, purchasing power risk, interest rate risk, unsystematic risk, business risk, financial risk, default risk, regulation risk, liquidity risk, commodity risk, beta coefficient, mutual exclusivity, conditional probability, joint probability, independent probability, discrete distributions, continuous distributions, expected value of alternatives, probability of success and failure, critical probability, inequity functions, stages of the simulation process, objective vs. subjective probabilities, correlation analysis, coefficient of correlation, coefficient of determination, sensitivity analysis, simulation, and standard deviation.
E. Investment Returns – expected return, required return, realized return, holding point return, internal rate of return, arithmetic average return, geometric average return, real return, total return, tax-adjusted return, weighted average return, Sharpe Performance Index, Treynor Performance Index, Jensen Performance Index, fundamental analysis, technical analysis, Dow Theory, odd-lot short sales theory, market breadth, immunization, laddered bond approach, dumbbell strategy, bond swapping, substitution swap, intermarket spread swap, rate anticipation swap, pure yield pickup swap, yield curve.
F. Investment Valuation – constant dividend growth model, perpetuity, capitalized earnings approach, margin accounts, maintenance margin, margin call, real estate valuation, sales comparison approach, cost approach, capitalization approach, net operating income, bond rating agencies, interest rate impacts on bond prices, bond terms & volatility, coupon rates, yield curves, liquidity premium theory, market segmentation theory, expectations theory, duration. |
