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Study Session 4-5: Private Wealth Management

Estate tax freeze

Hello friends. What is this ‘non-voting common stock’? Does it have a nominal value just because there are no voting rights? 

Equity monetization

Hello friends. I have some questions on short sale against the box. 

1) Why would one give away the dividends earned in a long position to a dealer in this strategy? 

2) This strategy is more of a delayed outright sale. Is this strategy only pursued in markets which lack a derivatives market?

R13 - Conc Single-Asset Positions - Equity Monetization Tools

Hello Guys,

Have a question regarding establishing short position in stock as outlined under Equity Monetizations tools. 

Could somebody explain - 

1) Total Return Equity Swap - How money market rate of return (i.e. Rf rate) is being earned on full value of hedged position? Since $100 MM fully hedged value (ABC Corp. example) isn’t actually invested in money market . 

Accrual Equivalent Return

What is the definition of accrual equivalent return and how is it calculated?


Charitable gratuitous transfers

Why should equation 8 numerator not contain a (1-Tg) at the end to also indicate savings on gift transfer tax?

Errata - reading 12 (Estate planning)

The errata says delete the first paragraph of the equation. (Really? It explains the new terms). And they have struck through/deleted the first line of next para. 

BB&K categories - reading 9 vs 10

Can someone reconcile the categories? I tried and got most of it by lining up the 2 dimensions, but a few of the descriptions seem fairly off (categories marked with “?”)

Reading 9 (p.109-110) vs reading 10 (p.169-170)

Individualist = individualist

Adventurer = spontaneous

Guardian = methodical?

Celebrity = cautious?