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LET’S PRACTICE!
#1. Which type of bond has the greatest interest rate risk?
#2. An investor looking for tax-free income would be most interested in:
#3. What is the primary purpose of diversification?
#4. Which of the following best describes the ‘fiduciary duty’ of an adviser?
#5. An investor wants to limit downside while retaining upside potential. Recommend:
#6. What is the effect of inflation on purchasing power?
#7. Which of the following statements about ETFs is FALSE?
#8. Which of the following is a characteristic of a revocable trust?
#9. A mutual fund with a front-end load charges:
#10. Which entity is responsible for enforcing the Investment Company Act of 1940?
#11. Which of the following is an advantage of Roth IRAs?
#12. A REIT is required to distribute at least what percentage of income to shareholders?
#13. What is a key feature of a money market fund?
#14. Which of these is subject to market risk?
#15. What does ‘alpha’ measure?
#16. Which of the following would be most suitable for capital preservation?
#17. Which retirement plan is only available to employees of public schools and nonprofits?
#18. An investor sells a bond before maturity for more than the purchase price. The gain is:
#19. Which of the following is TRUE about TIPS?
#20. A ‘stop order’ becomes a market order when:
#21. What is the tax treatment of qualified dividends?
#22. Which of the following is NOT considered a derivative?
#23. A mutual fund’s turnover ratio reflects:
#24. A bond is selling at a discount when:
#25. Which of the following is an example of a leading economic indicator?
#26. The Sharpe ratio is used to assess:
#27. Which regulatory body oversees broker-dealers?
#28. Which of the following is an example of a capital market instrument?
#29. An investor with low risk tolerance and a short time horizon should invest in:
#30. The purpose of a balance sheet is to show:
#31. Which type of risk is most associated with international investing?
#32. A bond with a 6% coupon trading at 102 has a yield to maturity that is:
#33. Which of the following is a lagging economic indicator?
#34. What is the benefit of a 1031 exchange?
#35. Which index best represents small-cap stocks?
#36. An investor receiving dividends from a foreign company may be subject to:
#37. Which of the following is TRUE of a stop-limit order?
#38. A married couple can contribute how much to a traditional IRA for 2024 if under age 50?
#39. Which investment is most appropriate for a long-term investor seeking inflation protection?
#40. An investor who sells short is anticipating:
#41. Which of the following would be included in a client’s net worth calculation?
#42. Which type of mutual fund share class typically has no front-end load but higher 12b-1 fees?
#43. Which of the following is NOT subject to market risk?
#44. An income statement shows a firm’s:
#45. A fixed annuity is most susceptible to which risk?
#46. Which strategy limits gains and losses?
#47. Which of the following is typically considered the safest investment?
#48. Who can contribute to a 403(b) plan?
#49. The NAV of a mutual fund is calculated:
#50. A ‘bull call spread’ strategy is used when an investor expects:
#51. Which of these securities pays taxable interest?
#52. What is the role of a custodian in a retirement plan?
#53. Which of the following investments is considered illiquid?
#54. An investor receives a Schedule K-1 from which type of investment?
#55. A ‘wash sale’ disallows a loss deduction if repurchased within:
#56. Which plan allows both employee and employer contributions?
#57. The standard deduction reduces a taxpayer’s:
#58. An asset has a beta of 1.3. What does this mean?
#59. The primary advantage of a SEP IRA is:
#60. Which of the following accounts is not tax-advantaged?
#61. What does ‘rebalancing’ a portfolio accomplish?
#62. Who must register with the SEC under the Investment Advisers Act?
#63. Which option strategy is best if you expect a stock’s price to stay flat?
#64. The yield curve reflects the relationship between:
#65. Which of the following is a use of Monte Carlo simulation?
#66. Which document discloses a mutual fund’s expenses and risks?
#67. An investor who wants to speculate on volatility would use a:
#68. A hedge fund is usually limited to:
#69. Which of the following is an indirect investment in real estate?
#70. In a 529 plan, who controls the assets?
#71. Which of these is NOT included in a credit score calculation?
#72. What is the primary purpose of the Securities Act of 1933?
#73. Which index includes the broadest range of U.S. stocks?
#74. A qualified dividend is taxed at:
#75. Which of the following is used to measure bond credit quality?
#76. A mutual fund is required to send shareholders a prospectus:
#77. A UTMA account belongs to:
#78. Which of the following is NOT a characteristic of preferred stock?
#79. Which of the following is a benefit of municipal bonds?
#80. An investor holding a growth stock expects primarily:
#81. Which of these is most affected by interest rate risk?
#82. What is the primary function of an investment adviser representative (IAR)?
#83. What is the main advantage of an index fund?
#84. Which of the following is NOT typically included in a financial plan?
#85. A ‘margin call’ occurs when:
#86. Which tax form reports capital gains and losses?
#87. A ‘bullish’ investor expects:
#88. Which of the following provides the LEAST diversification?
#89. Which type of account has no contribution limits and no tax benefits?
#90. Which of the following best defines ‘duration’?
#91. A bond’s yield to maturity assumes:
#92. The bid price of a stock is the:
#93. An ETF that tracks gold is an example of:
#94. What is the goal of asset allocation?
#95. A high Sharpe ratio indicates:
#96. Which of the following is a qualified retirement plan?
#97. Which investment is most exposed to reinvestment risk?
#98. In a variable annuity, investment risk is borne by the:
#99. Which of the following is a key feature of a hedge fund?
#100. A long-term investor concerned about inflation may invest in:
#101. The main purpose of a prospectus is to:
#102. Which regulatory body enforces insider trading laws?
#103. A corporate bond rated BB is considered:
#104. Which of these is most suitable for a conservative investor?
#105. A brokerage firm fails to deliver securities. This is a violation of:
#106. An ETF with leverage 2x is designed to:
#107. A time-weighted return is used to evaluate:
#108. The SEC regulates investment advisers under:
#109. Which of the following accounts is designed for health expenses?
#110. A bond’s current yield is calculated by:
#111. Which of the following is true of a traditional IRA?
#112. Beta measures a stock’s:
#113. What is the benefit of dollar-cost averaging?
#114. Which of the following would be subject to AMT?
#115. Which entity sets monetary policy?
#116. Which investment vehicle may offer tax-deferred growth and professional management?
#117. A variable life policy has which of the following features?
#118. An investor wants automatic diversification with a single purchase. Recommend:
#119. Which of the following describes an illiquid asset?
#120. An accredited investor must meet income or net worth criteria defined by:
#121. Which of the following reports inflation?
#122. Which of the following has the highest potential for long-term capital growth?
#123. A registered rep recommending only mutual funds that offer high commissions is violating:
#124. Which tax form is used to report retirement account distributions?
#125. What is the maximum contribution to a 401(k) for someone under 50 (2024)?
#126. Which of the following is NOT a fiduciary?
#127. A variable annuity’s performance is based on:
