Equities, Funds & Alternatives
Series 65 Section II: shareholder rights, offerings, fund structures and share classes, alternatives, annuities and life insurance, commodities, and digital assets.
31 terms in this unit.
Shareholder Rights (Statutory vs. Cumulative Voting)
Voting, preemptive rights, dividends when declared, inspection, limited liability.
Types of Preferred Stock
Cumulative, convertible, callable, participating, and floating-rate preferred.
American Depositary Receipt (ADR)
A dollar-denominated receipt for foreign shares, traded in the US.
Rights vs. Warrants
Rights: short-term, below market. Warrants: long-term, above market.
Restricted & Control Stock (Rule 144)
Unregistered or insider-held stock with resale limits.
Employee Stock Options (ISO vs. NSO)
Incentive options get capital gains treatment; nonqualified options create income at exercise.
Technical Analysis
Forecasting prices from charts, trends, and trading volume.
Fundamental Analysis
Valuing a company from its financial statements, management, and industry.
Dividend Discount Model
A stock is worth the present value of its future dividends.
Initial Public Offering (IPO)
A company's first sale of stock to the public.
Secondary (Follow-On) Offering
A later offering of shares after the IPO.
SPAC / Blank Check / Blind Pool
A shell company that raises money first and picks an acquisition later.
Closed-End Fund
A fund with a fixed number of shares that trades on an exchange.
Unit Investment Trust (UIT)
A fixed, unmanaged portfolio with a set termination date.
Hedge Fund
A lightly regulated private fund for wealthy investors, often using leverage and shorting.
Private Equity & Venture Capital
Funds investing in private companies - buyouts and startups.
Mutual Fund Share Classes (A, B, C)
A: front-end load. B: back-end load. C: level load.
Breakpoints & Letter of Intent
Reduced sales charges on larger Class A purchases.
12b-1 Fee
An annual fee a fund charges to cover distribution and marketing.
Exchange-Traded Note (ETN)
Unsecured bank debt that tracks an index and trades like a stock.
Leveraged & Inverse Funds
Funds targeting a multiple or the opposite of an index's daily return.
Structured Products
Notes combining a bond with a derivative for a customized payoff.
Limited Partnership / Direct Participation Program
A flow-through structure with a managing general partner and passive limited partners.
Variable Annuity
An annuity whose value rides on subaccounts the owner chooses - a security.
Fixed Annuity
An annuity paying a guaranteed rate from the insurer's general account.
Indexed (Equity-Indexed) Annuity
A guaranteed minimum plus credits linked to an index, with caps.
Annuity Payout Options
Life only pays the most per month; joint and survivor pays the least.
Universal Life Insurance
Permanent coverage with flexible premiums and an adjustable death benefit.
Variable Life Insurance
Permanent coverage with cash value invested in subaccounts - a security.
Commodities & Precious Metals
Raw materials and metals, held directly, through futures, or through funds.
Digital Assets
Blockchain-based tokens - some are securities, some commodities, some neither.