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LET’S PRACTICE!
#1. Which of the following is MOST vulnerable to credit spread widening?
#2. The purpose of a GRAT (grantor retained annuity trust) is generally to:
#3. What is the dividend discount model primarily used for?
#4. Which entity sets initial margin requirements for equity options?
#5. An investor employing a barbell bond strategy would purchase:
#6. A client inherits a brokerage account; the cost basis is generally:
#7. Which of the following partnerships can avoid passive activity loss limitations for limited partners?
#8. In Modern Portfolio Theory, the capital market line plots portfolios based on:
#9. A ‘hard dollar’ payment from an adviser to a broker‑dealer is for:
#10. Which statement about subordinated debentures is TRUE?
#11. An ETF using a ‘sampling’ replication method will:
#12. Under ERISA section 404(c), plan participants who direct their own investments must receive:
#13. Which of the following would likely have the LOWEST 12b‑1 fee?
#14. Income from which of the following is INCLUDED when calculating provisional income to tax Social Security benefits?
#15. The ‘step transaction’ doctrine is most relevant to:
#16. Which of the following is subject to AMT preference items?
#17. A client writing uncovered equity calls MUST have:
#18. The SEC Custody Rule requires client assets to be verified by surprise examination at least:
#19. Which metric is used to compare the AFTER‑FEE performance of investment managers relative to risk?
#20. A REIT classified as ‘mortgage REIT’ primarily earns revenue from:
#21. Qualified dividends must generally be held at least:
#22. An investor concerned about rising rates could purchase a bond ETF with:
#23. Which of the following is TRUE regarding Section 529A ABLE accounts?
#24. A mutual fund that charges a fee when shares are redeemed within 12 months is imposing:
#25. A private equity fund using a ‘European waterfall’ distributes carried interest:
#26. Under Regulation S‑P, the privacy notice must be delivered to customers:
#27. The put‑call parity formula can be used to synthetically create which position?
#28. Which of the following actions requires filing Form PR with the SEC?
#29. If a closed‑end fund trades at a premium, its market price is:
#30. Which bond covenant protects bondholders by limiting additional future debt?
#31. Which investment vehicle provides limited liability, pass-through taxation, and centralized management?
#32. Which of the following is not considered a fiduciary under ERISA?
#33. A bond’s yield to worst is:
#34. Which mutual fund share class typically has no front- or back-end load but higher ongoing fees?
#35. What does negative alpha indicate?
#36. Which plan is designed for the self-employed and small business owners?
#37. Which of the following are subject to probate?
#38. Which account type allows tax-deductible contributions and tax-deferred growth?
#39. Which type of mutual fund charge is a 12b-1 fee?
#40. Under the USA, an investment adviser with no place of business in a state does not need to register if:
#41. What is the maximum annual contribution to a 529 plan to avoid gift tax reporting (2024, single filer)?
#42. The benchmark for small-cap U.S. equities is typically the:
#43. Which is the most liquid investment?
#44. A municipal revenue bond is backed by:
#45. Which SEC rule governs adviser advertising practices?
#46. An investor who owns 100 shares and buys a put is executing:
#47. The most common way a hedge fund charges fees is:
#48. What is the principal benefit of diversification?
#49. A money market fund’s NAV is typically:
#50. Which of the following would most concern a value investor?
#51. A client who uses ETFs to gain broad index exposure is practicing:
#52. Which of the following entities is NOT exempt from SEC registration?
#53. When a bond trades at a discount, its yield to maturity is:
#54. Which of the following forms is filed by a registered investment adviser withdrawing from registration?
#55. A fiduciary is required to:
#56. Which type of order becomes a market order once a trigger price is reached?
#57. What is the minimum net worth required to be considered a ‘qualified client’?
#58. Which type of fund uses redemption fees to discourage short-term trading?
#59. A client saving for a disabled adult child should consider a:
#60. If a fund’s Sharpe ratio is increasing, what does that indicate?
#61. An investment adviser must deliver a brochure (Form ADV Part 2) to clients:
#62. What is the primary function of a clearinghouse in options trading?
#63. Which of the following is a leading economic indicator?
#64. A stock is trading at $40 and a client buys a 45 strike call. This position is:
#65. Who is responsible for enforcing the Investment Company Act of 1940?
#66. Under the USA, which of the following is considered an agent?
#67. Which statement best describes volatility?
#68. A foreign stock traded on a U.S. exchange via a certificate is known as a(n):
#69. A conservative investor seeking regular income and safety of principal should consider:
#70. An RIA’s brochure must be updated:
#71. Which account offers the highest contribution limits for a sole proprietor?
#72. Which security has the highest sensitivity to interest rate changes?
#73. A wrap account typically includes:
#74. The best investment for a risk-averse client needing liquidity and stability is:
#75. Which action is a violation of the anti-fraud provisions under the USA?
#76. Which of the following is NOT a feature of a variable annuity?
#77. The break-even for a call option buyer is:
#78. Which factor would most influence a bond’s market price?
#79. Which of the following would be considered a non-systematic risk?
#80. A fiduciary under ERISA must adhere to the:
#81. Which form must be filed by institutional managers with $100 million or more in 13F securities?
#82. Which statement about zero-coupon bonds is TRUE?
#83. Which of the following is an example of a pass-through entity?
#84. Which statement is TRUE about NAV of a mutual fund?
#85. Which of the following is an indirect investment in real estate?
#86. Which type of insurance is typically NOT held inside an irrevocable life insurance trust?
#87. An investment adviser’s compensation must always be:
#88. Which of the following describes a ‘balanced fund’?
#89. A fund with high portfolio turnover may lead to:
#90. What is a key feature of a closed-end fund?
#91. Which of the following is a characteristic of a traditional defined benefit pension plan?
#92. A client wants tax-deferred growth and creditor protection. Recommend:
#93. Which of the following is NOT a qualified distribution from a Roth IRA?
#94. Which investment is most sensitive to changes in interest rates?
#95. Under the Securities Exchange Act of 1934, which entity regulates exchanges?
#96. A client wants capital appreciation and can accept high risk. You suggest:
#97. When must a Form ADV Part 2 be updated?
#98. What is a breakpoint in a mutual fund?
#99. Which of the following is most likely to impact a convertible bond’s value?
#100. A registered investment adviser must deliver a brochure to clients:
#101. The measure of a stock’s volatility compared to the market is called:
#102. Which of the following is NOT subject to regulation under the Investment Advisers Act of 1940?
#103. A client who needs regular income and moderate growth might choose:
#104. Which of the following investors would be considered accredited?
#105. Under the USA, who is responsible for enforcing state securities laws?
#106. Which of the following would reduce the NAV of a mutual fund?
#107. What is the tax consequence of selling a security short?
#108. Which is considered a non-qualified plan?
#109. Which investment vehicle allows investors to pool funds and be taxed as partners?
#110. The most appropriate benchmark for an actively managed bond fund is:
#111. Which of the following is NOT included in a client’s investment policy statement?
#112. Which of the following is TRUE about dollar-cost averaging?
#113. The Uniform Prudent Investor Act focuses primarily on:
#114. What is the main advantage of ETFs over mutual funds?
#115. What type of risk does diversification reduce?
#116. Which of the following is typically used to hedge currency risk?
#117. What is the primary objective of a growth mutual fund?
#118. Which of the following is NOT typically included in a firm’s balance sheet?
#119. Which of the following is true about stop-limit orders?
#120. Which of the following accounts is best suited for a high-income earner saving for college?
#121. Which of the following is least liquid?
#122. A decrease in interest rates will cause bond prices to:
#123. What does Form ADV Part 1 disclose?
#124. Which of the following has the greatest inflation protection?
#125. An investor sells a security for a gain but buys it back within 30 days. This triggers:
