Quotes in the Investment-Company and Variable-Contract Context
Chapters in this video
- 0:00 Open-end vs closed-end fund quoting and the bakery analogy
- 1:58 ETF iNAV, the 15-second rule, and execution trap
- 3:58 Variable annuity AUV and the dual nature trap
- 5:17 Municipal fund securities and MSRB rule kicker
- 5:51 Order mechanics and the no-secondary-market trap
- 6:41 Rapid-fire exam recap
What this video covers
- Why the forward-pricing rule means an open-end mutual fund has no continuous intraday quote, and the exact meaning of NAV (bid) and public offering price, or POP (ask)
- How closed-end funds differ: continuous secondary-market trading at a premium or discount to NAV, with live bid/ask spreads like a stock
- What intraday indicative value, or iNAV, actually is for an ETF, why it updates roughly every 15 seconds, and why execution still happens at the market bid/ask
- How variable annuities quote per sub-account in accumulation unit value, or AUV, during deferral, and why AUV is forward priced under the same rule as mutual funds
- The dual nature of variable annuities (insurance contract under state law, securities transaction under federal law) and which FINRA and state rules apply
- Why municipal fund securities like 529 plans and ABLE accounts use plan-calculated unit values and are governed by Municipal Securities Rulemaking Board, or MSRB, rules even when holding mutual funds
- How the absence of a secondary market for open-end funds means shares must be redeemed directly to the fund at NAV, never sold to another investor
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 6 course also includes adaptive practice questions and spaced-repetition flashcards.