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