Which of the following is NOT a financial factor that an investment adviser should include their customer's investment profile?
a. Other assets
b. Net worth
c. Political party
d. Federal tax rate
C
What is it called when an investment advisor takes reasonable steps to make appropriate recommendations to a consumer?
a. Due diligence
b. Research
c. Fiduciary responsibility
d. Suitability analysis
A
Which of the following is an investment concept that should be applied to a customer's financial profile to determine the best investment for a customer?
a. Turnover ratio
b. Total investment porfolio
c. Current financial status
d. Risk vs. return
D
Diana and Greg are a newly retired couple. Which of the following would be the most appropriate investment vehicle for them?
a. Stocks
b. Options
c. Roth IRAs
d. Money market funds
D
How much money is an employee allowed to contribute to their 401k on a pre-tax basis?
a. $5,000
b. $15,000
c. $18,000
d. $10,000
C
Which of the following investments have tax advantages for an investor?
a. Treasury bonds
b. Partnerships
c. Options
d. Convertible stock
B
What do the horizontal and vertical axis of the capital asset pricing model (CAPM) represent?
a. Assets, rate
b. Equities, bonds
c. Risk, expected return
d. Volatility, willingness
C
Which of the following would be expected to earn a risk free rate?
a. Short term treasury bonds
b. Equities
c. Options
d. Commodities
A
The S&P 500 return for a time period was 7%. Maggie, a fund manager had a benchmark in the S&P 500 that returned 9%. What was the Alpha generated?
a. 2%
b. -2%
c. 14%
d. 9%
A
What are the three areas where investment advisers should consider municipal investment diversification?
a. Equities, bonds, money market funds
b. Geographical, type, rating
c. State, tax yield, government type
d. Long-term, short-term, mid-range
B
What is a stated period of time when an investor can withdraw funds without penalty?
a. Deferred charge
b. Potential return
c. Investment lag
d. Surrender period
D
What two factors from an investor's investment profile are most important when considering the suitability of options as an investment vehicle?
a. Liquidity and net worth
b. Age and marital status
c. Objectives and educational needs
d. Experience and empl
A
What is the correlation between a stock and the broader market index called?
a. Alpha
b. Beta
c. Delta
d. Benchmark
B