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LET’S PRACTICE!
#1. Which of the following would best protect a portfolio from inflation?
#2. An investor receiving variable interest payments likely holds:
#3. What type of mutual fund is most suitable for income-seeking investors?
#4. The capital asset pricing model (CAPM) uses which variable to measure risk?
#5. Which investment would be most appropriate for a client in a low tax bracket seeking regular income?
#6. The yield curve is typically upward-sloping because:
#7. Which of these accounts does NOT have required minimum distributions?
#8. An index fund is an example of:
#9. Who is responsible for regulating investment advisers under the Investment Advisers Act of 1940?
#10. Which of the following investments is most likely to be illiquid?
#11. A market order guarantees:
#12. A bond has a 6% coupon and trades at a discount. Its current yield is:
#13. Which of the following is subject to double taxation?
#14. Which of these is a short-term U.S. government debt instrument?
#15. A client is investing for a child’s education in 15 years. What is most suitable?
#16. The benefit of using a target-date fund is:
#17. Which of the following is the most tax-efficient investment?
#18. The SEC’s primary mission is to:
#19. Which plan offers tax-free withdrawals for qualified education expenses?
#20. Which economic indicator reflects price changes paid by consumers?
#21. An investor buying a bond at a premium will experience:
#22. Who can revoke a revocable trust?
#23. An option contract gives the buyer:
#24. A client asks you to manage their account without prior approval. This requires:
#25. A municipal revenue bond is secured by:
#26. Which of the following is a benefit of diversification?
#27. A growth stock is characterized by:
#28. Form CRS is designed to:
#29. Which of the following best describes duration?
#30. A bond’s YTM is best described as:
#31. Which of the following would reduce a client’s estate value for tax purposes?
#32. Which of the following is true about Roth IRAs?
#33. Which of these securities would most likely be included in a conservative income portfolio?
#34. Which regulation focuses on full and fair disclosure in new offerings?
#35. What is one advantage of using ETFs in a portfolio?
#36. A client wants to set aside funds for a grandchild’s education. Which account is appropriate?
#37. A high standard deviation in a fund’s performance indicates:
#38. Which of the following does NOT require SEC registration?
#39. An income statement shows:
#40. Who is responsible for safeguarding a mutual fund’s assets?
#41. What is the tax treatment of qualified dividends for individuals in the 22% bracket?
#42. What is the primary risk of mortgage-backed securities?
#43. An investor holding a bond to maturity avoids:
#44. Which security is least affected by changes in interest rates?
#45. A long-term investor looking for diversification would benefit most from:
#46. The price-to-earnings ratio is used to:
#47. An adviser must maintain client records for how many years after termination?
#48. What is required before making a recommendation to a new client?
#49. Which of the following can be purchased on margin?
#50. An investment adviser who charges fees must disclose this in:
#51. An example of a derivative is a:
#52. A client wishes to invest $500/month regardless of market conditions. This is called:
#53. When does an investor pay taxes on capital gains in a mutual fund?
#54. Which of the following is subject to self-employment tax?
#55. An investor worried about systematic risk should understand that it:
#56. A convertible bond gives the investor the option to:
#57. Which of these reports earnings and expenses?
#58. Which account allows for pre-tax contributions?
#59. Which of the following is a non-cash expense?
#60. The Sharpe ratio is used to evaluate:
#61. A fund with a beta of 1.2 is expected to be:
#62. An adviser offering investment advice to only insurance companies is:
#63. What type of risk is least likely to impact all companies?
#64. A ‘qualified institutional buyer’ (QIB) must have:
#65. A mutual fund’s turnover ratio indicates:
#66. A simplified prospectus is known as:
#67. An investment adviser’s code of ethics must include:
#68. Which of these accounts allows tax-deductible contributions?
#69. Form U4 is used for:
#70. A portfolio’s alpha of 0.5 suggests:
#71. A fund with high R-squared and low beta is:
#72. A client’s investment objective is current income. Which is suitable?
#73. Which law requires mutual fund prospectus delivery?
#74. Who must sign the Form ADV?
#75. A ‘wrap fee’ covers:
#76. When must Form CRS be delivered?
#77. A hedge fund is typically organized as a:
#78. A client seeking low-cost broad market exposure should consider:
#79. Which account type provides tax-free withdrawals if conditions are met?
#80. Which of these is typically used for estate planning and avoids probate?
#81. A mutual fund that reinvests capital gains will:
#82. Which of the following is not traded on an exchange?
#83. A bond with a call feature is most attractive to issuers when:
#84. An investor who wants steady retirement income should consider:
#85. A stop order is triggered when:
#86. A portfolio with a high Sharpe ratio indicates:
#87. A UTMA account is owned by:
#88. Which financial statement shows cash inflows and outflows?
#89. A covered call is best described as:
#90. Interest from corporate bonds is taxed at:
#91. Which plan allows high contribution limits for small business owners?
#92. A client with a high-risk tolerance and long time horizon is most suited for:
#93. A REIT must distribute at least:
#94. What is the primary function of a custodian?
#95. Which fund charges a fee when shares are redeemed?
#96. Which product combines insurance and investment features?
#97. A bond selling above par is:
#98. A client is worried about interest rate risk. Recommend:
#99. Which of these must register under the Investment Advisers Act of 1940?
#100. A 12b-1 fee covers:
#101. A 457 plan is available to:
#102. What does alpha measure?
#103. Which of the following is an example of passive investing?
#104. A client seeking tax-deferred retirement savings should open a:
#105. In a mutual fund, what determines the NAV?
#106. Which plan is best for saving for K-12 expenses?
#107. The ex-dividend date determines:
#108. A municipal bond’s yield is adjusted for taxes using:
#109. An investor buying a zero-coupon bond receives income:
#110. A firm must deliver Form CRS to a retail client:
#111. A bond’s interest rate is also called its:
#112. Which type of bond is backed by collateral?
#113. An investor in a high tax bracket may benefit most from:
#114. What is the maximum contribution to a 529 plan annually (without gift tax filing)?
#115. If interest rates fall, which investment benefits most?
#116. What is the primary risk of investing in high-yield bonds?
#117. Which financial metric measures leverage?
#118. A registered rep must update Form U4 within:
#119. Who pays capital gains tax in a mutual fund?
#120. Which of the following is a qualified dividend?
#121. Which of these is not an ERISA plan?
#122. Which index tracks large-cap U.S. stocks?
#123. A portfolio manager who outperforms the benchmark has positive:
#124. A client withdrawing from a traditional IRA before age 59½ may incur:
#125. Which of these indicates market volatility?
