Packaged Products: Rapid Fire
Chapters in this video
- 0:00 The three ICA investment-company types
- 1:36 Open-end buffet versus closed-end dinner
- 2:50 Forward pricing and the 4 PM ET cutoff
- 3:59 UITs: the unmanaged odd duck
- 4:40 Class A breakpoints and the expensive Class C trap
- 5:46 Rights of accumulation and letter of intent mechanics
- 6:59 Variable annuity dual regulation and tax treatment
- 8:27 Seven calendar days versus seven business days
- 9:00 Rapid-fire exam recap
What this video covers
- The three Investment Company Act of 1940 (ICA) types: face-amount certificate companies, unit investment trusts (UITs), and management companies, with emphasis on what makes UITs non-management companies
- How open-end funds continuously issue and redeem shares at net asset value (NAV) using forward pricing, versus closed-end funds with fixed shares that trade at premiums or discounts on an exchange
- The public offering price (POP) formula: NAV plus sales charge, and why only closed-end funds can trade away from NAV
- Class A, B, and C share distinctions: which classes get breakpoints, which 12b-1 fees apply, and why Class C becomes the most expensive over time
- The volume-discount trio (breakpoints, rights of accumulation, letter of intent) and the 8.5% maximum front-end load with its three required conditions
- Variable annuity dual personality as insurance product and security, dual licensing requirement, 10% early-withdrawal penalty before age 59 1/2, and ordinary-income tax treatment
- Prospectus delivery timing, Statement of Additional Information (SAI) delivery on request only, and why sales charges are excluded from the expense ratio
Read the full lesson, free
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