Investment vehicle types and portfolio strategy concepts an investment adviser representative must know for the Series 65 and 66 exams.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is an open-end mutual fund?
- A mutual fund that continuously issues new shares and redeems existing shares at net asset value.
- Define dollar-cost averaging.
- A strategy of investing a fixed amount at regular intervals regardless of market price.
- What is a closed-end fund?
- A mutual fund with a fixed number of shares issued once, traded on an exchange like stocks.
- What does beta measure?
- The volatility of a security or portfolio relative to the overall market.
- What is the efficient frontier?
- The curve showing optimal portfolio combinations with the highest expected return for each level of risk.
- Define rebalancing.
- Reallocating a portfolio periodically to restore it to its target asset allocation.
- What is a REIT?
- A real estate investment trust that pools investor capital to invest in real estate properties or mortgages.
- What is an ETF?
- An exchange-traded fund that trades like a stock but holds a basket of underlying securities.
- Define liquidity risk.
- The risk that an investor cannot quickly sell a security without significantly impacting its price.
- What is asset allocation?
- The distribution of investments across different asset classes to achieve financial objectives.
- What does the Sharpe ratio measure?
- Excess return per unit of risk, calculated as return minus risk-free rate divided by standard deviation.
- Define diversification.
- Spreading investments across multiple securities to reduce unsystematic risk.
- What is a unit investment trust?
- A registered investment company that invests in a fixed portfolio of securities and issues redeemable units.
- What is systematic risk?
- Market-wide risk that cannot be eliminated through diversification.
- What is unsystematic risk?
- Company or industry-specific risk that can be reduced through diversification.
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