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What is the function of the International Organization of Securities Commissions (IOSCO)?
Which one of the following is the better way to operate as a financial adviser?
Under normal economic conditions what part of the business cycle typically follows recession?
What does ‘layering’ refer to when speaking about money laundering?
What are the two employer/employee components of a “tax wedge”?
In most regulatory environments, which of the following should be disclosed to clients and potential clients?
I. Fees and other expenses
II. Disciplinary actions and current licenses
III. Agency relationships and affiliations
IV. Home address and phone number
Assume a financial adviser is considering two investment recommendations for a client. One involves payment to the adviser from the investment’s issuer and the other does not. Both options are suitable. Which option should the adviser choose to comply with a “client first†standard?
What are employment, consumer spending, housing, wages and prices components of?
What is an important component of enabling a financial adviser to address conflicts of interest?
In addition to identifying and verifying the customer’s identity, what additional identification requirement does the Financial Action Task Force (on Money Laundering), or FATF, say should be met?
What’s the term that refers to when a territory imports from another territory more than it exports?
What does prudential regulation require of financial firms?
What does a stop order mandate when buying or selling a security?
Which of the following standard rights typically are extended to both common and preferred stockholders?
What generally happens on the secondary securities market?
What two categories of information in the mutual fund registration statement (prospectus) are most important for potential investors to consider when they are trying to select the best fund to achieve their goals?
Do exchange traded funds (ETFs) that passively track an index normally have higher or lower fees compared with typical mutual funds and are they more or less tax-efficient?
Why is a mutual fund (collective or pooled investment scheme) technically called an open-end investment company?
Which one of the following is a correct example of non-systematic risk?
Covariance is the statistical term for the correlation between two variables multiplied by the standard deviation for each variable. What does covariance show?
n a normally distributed sample, approximately what percentage of the data (returns) will lie within one standard deviation either side of the mean?
What is the problem represented by using the LBMA Gold Price (bullion) as a benchmark to compare a fund of large-cap stocks?
What is the correct Sharpe Ratio (S) given the following parameters: Portfolio return = 8.0% Risk-free return = 3.0% Standard deviation of the portfolio = 10.0% Market return = 7.0%?
What is the holding period return (HPR) for an investor who purchased 100 shares of stock for $40 per share and held the stock for four years, during which it paid dividends of $0.25, $0.26, $0.27 and $0.28 per share, respectively; then she sold the stock at the end of the four-year period for $50 per share?
Which one of the following assumptions of Markowitz’s Modern Portfolio Theory directly contrasts with a basic assumption of behavioral finance?
Arbitrage pricing theory (APT) can be used to determine an asset’s required return by looking at which two influences?
What does the capital market line (CML) show?
Once per year often is considered a good time-frame to evaluate a portfolio. What rationale should support the decision to rebalance a portfolio?
In addition to security selection, what activity best reflects tactical asset allocation?
What is the most professional way to develop a client investment portfolio?
Executive stock options typically cannot be exercised immediately following the date they are awarded by the company. What is the common term to identify the options status at which it can be used to purchase or receive company stock?
People may believe they are better at many things than other people around them, That is, they have unrealistically positive self-evaluations. What is the name of this bias?
What term is used to describe those who try to avoid having too much money?
What is the science of applying psychology to finance called?
In addition to supporting compliance to the exact letter of the law, what should a business culture promote if it’s focused on protecting consumers?
At its core, what does a reasonable definition of fiduciary state?
What is the definition of money laundering?
What is the ultimate objective of mandating compliance with regulatory requirements?
What is the primary purpose of financial regulation according to the International Monetary Fund?
Fiscal drag and fiscal boost are variations of what type of fiscal policy?
What is a typical business response when the government enacts legislation that increases costs to the business?
What are the three stages of money laundering (in order)?
Which one of the following best summarizes investment adviser responsibility toward clients?
Governments focus on using two primary policies to impact their economy, one of which is monetary. What is the second?
Selective perception is most likely an aspect of what type of behavioural bias?
The point of tangency between the capital market line (CML) and the efficient frontier of risky assets most likely identifies the:
How is nominal yield calculated compared with current yield?
What sequence best represents the risk-return trade-off from lowest risk to highest?
Although there is flexibility regarding specific priorities and focus of each life stage, which life stage is likely to primarily be concerned with funding children’s education and establishing peak earning potential?
Regarding core/satellite asset allocation, which of the following statement is true?
Factors such as changes in interest rates and changes in inflation contribute to:
Which one of the following would be true if an adviser agrees with the strong form of the Efficient Market Hypothesis (EMH)?
Which of the following equations correctly identifies the process to determine a company’s liquidity ratio?
What behavioral bias is an individual most likely exhibiting when they have unrealistically positive self-evaluations relative to the people around them?
A diversified portfolio will most likely result in the reduction of:
What is most likely not an advantage of an ETF?
Shares of a closed-end fund are trading at a 5% discount under NAV. If NAV is $10 per share, what is the current market price of the fund’s shares?
To what investment risk may a bond be subject if it is not held to maturity that will not be present if it is held to maturity?
The lowest risk is most likely associated with the following mutual fund type:
The slope of the security market line (SML) represents the portion of an asset’s expected return attributable to:
Regarding Strategic asset allocation, which of the following statement is true?
Which one of the following best illustrates a correctly-stated client’s SMART goal?
The standard deviation of returns for Stock S and Bond B are 20% and 8% respectively. If the correlation between the two stocks is 0.50, a portfolio consisting of 50% invested in Stocks and 50% in Bonds has a standard deviation closest to:
Regarding ‘market timing’ as an investment strategy, which of the following statement is true?
What is the name of a behavioral bias that places a higher value on an owned asset over assets that are not owned?
Which of the following is a reasonable description of duration in reference to bonds?
Several methods exist to address a concentrated stock position. Which one of these is most similar to an equity collar?
Which of the following is not an example of collecting a client’s quantitative information?
The focus of any financial management strategy will be on helping the client:
The first step in the financial management process is:
Your client is considering the purchase of a seven-year term deposit for $150,000 that pays an annual nominal interest rate of 2.65% compounded quarterly. The maturity value of the term deposit is most likely closest to:
Your client has an open-end lease for a car and will purchase the car at the end of the five year lease period for $7,800. Using an annual nominal interest assumption of 5.25% compounded annually, calculate the present value of the $7,800 that will be paid in five years time.
Your client has invested $8,000 in a term deposit that will mature in exactly 8 years time from today. The term deposit pays 4.8% annual interest compounded once each year. The maturity value of the term deposit is most likely closest to:
Which of the following is most likely to be considered a fixed cash outflow?
A cash flow statement most likely identifies a person’s:
Which of the following statements is most likely correct?
Which of the following is least likely to be a disadvantage of working through the budgeting process?
Which of the following is most likely a disadvantage of working with a client through the personal budgeting process?
Which of the following is most likely a step in assessing the client’s situation in the analysis stage of the client relationship?
Which of the following statements is most likely correct?
A lender evaluates how much income is available for debt service when evaluating a potential borrower. This is known as evaluating a borrower’s:
Which of the following is an example of a step in the collection of client information stage of financial management?
Which of the following statements is not true with regards to bankruptcy?
The goal of strategic optimization is best described as:
Which of the following is not a step in the synthesis and recommendation stage of financial management?
What Should a client do in a situation with two Goals, but with only enough time and money to fund one of them?
A client wants to purchase an automobile for $10000 and can finance the purchase at 12 percent compound annually for four years. The value of the interest payment at end of the third year is most likely closet to
A client plans to establish a fund from which their son will draw $1200 at the beginning of each month for the next 5 years as a support payment for the university. Assuming an annual nominal rate is at 3% compounded monthly, how much does your client need to deposit now as a one time amount to cover this flow of funds?
Which of the following is an example of a step in the collection of client information stage of financial management?
A client wants to purchase an automobile for $10000 and can finance the purchase at 12 percent compounded annually for four years. The value of the principal payment at the end of the second year is most likely closet to
Which of the following is most likely a step in creating a budget?
Which of the following is least likely to be a general guideline for a clients personal budget.
Your client states a goal to accumulate $100000 in 10 years. She further states that goal is to buy a vacation property that currently cost $100000. You explain that with inflation running at an annualized average of 2.5% the goal needs to be higher than the $100000 as that is in today’s dollars. If your client can earn 5% compounded monthly on savings what is the amount your client needs to save at the end of each month is most likely closest to meet the inflation adjusted goals.
Your client has the opportunity to invest in a project that requires an initial investment of $50000 and an additional investment of $10000 at the end of the first year. In year two through five, she will receive payment of: Yr 2: $10000 – Yr 3: $15000 – Yr4: $25000 – Yr5: $35000. The internal rate of return for this class flow is most likely closet to:
Your client has the opportunity to invest in a project that requires initial investments of $50000 and an additional investment of $10000 at the end of the first year. In years two through five, she will receive payments of: Yr 2: $10000 – Yr 3: $15000 – Yr4: $25000 – Yr5: $35000. Assume a 7% opportunity cost. The net present value for this class flow is most likely closet to:
A family’s cash flow statements is most likely
A client’s Net worth is calculated by
Which of the following is not a possibility for increasing income in the short term?
Which of the following is not a strategy to raise money to pay off other debt
Which of the following piece of information is not used to base a person’s credit score on
A common result of incentive stock options, or an executive stock ownership plan, is an increase in the size of the executive’s stock position with the company over time. The Question is whether the concentrated position increases potential portfolio risk to an unacceptable degree. If it’s the cash, which options do you have to reduce the position.
Which of the following correctly describes factors in an investor’s risk profile
Several method exits to address a concentrated stock position, Which one of these is most similar to an Equity collar
In money psychology, which of the following most likely represents a combination of a hoarders and spender?
In what type of environment of an economic environment might a corporation call a preferred stock or bond
You are advising a new client; He has a good understanding of the markets but is very focused on the shares of his employer because the price has been rising for a long time and he is confident about what they are doing. Which of the following alternatives is good solution for the issue.
Stock S has a Standard Deviation of 0.20 and Stock T has a SD of 0.14 Stock S and Stock T have a perfect positive co-relation of +1, According to Markowitz portfolio theory how much should be invested in each stock to minimize the portfolio’s variance?
The risk-free interest rate is 5% and the return on market portfolio is 8%. A stock with a beta of 0.5 that has an estimated rate of return of 7% is most likely
Which of the following investment categories are listed from those generally considered to lowest risk to highest risk
Regarding sAtrategic asset allocation, which of the following statement is true
The lowest risk is most likely associated with the following mutual fund type
Which one of the following correctly describes the P/E ratio?
Under typical scenarios what type of risk cannot be mitigated through diversification?
What term correctly identifies the difference between the risk-free return and an investment’s total return?
What is the most accurate description of what portfolios on the Efficient Frontier represent?
What does Modern Portfolio Theory (MPT) identify as the two factors (under certain conditions) that should be balanced when an individual determines investment choices?
Once per year often is considered a good time-frame to evaluate a portfolio. What rationale should support the decision to rebalance a portfolio?
What type of asset allocation strategy is (1) long-term, (2) generally passive once the asset mix has been determined, and (3) rebalanced periodically to return to original allocation percentages?
What is a simple way to describe the primary objective of the discovery process?
What are the four key phases of an appreciative inquiry process?
Which one of the following correctly describes the primary characteristics of the four investor types?
What is the definition of money laundering?
What is the primary purpose of financial regulation according to the International Monetary Fund?
In addition to supporting compliance to the exact letter of the law, what should a business culture promote if it’s focused on protecting consumers?
At its core, what does a reasonable definition of fiduciary state?
Which of the following is most likely a disadvantage of working with a client through the personal budgeting process?
Which of the following is least likely to be a disadvantage of working through the budgeting process?
Which of the following is most likely a step in assessing the client’s situation in the analysis stage of the client relationship?
A lender evaluates the asset that could be sold in the event of a loan default when evaluating a potential borrower. This is known as evaluating a borrower’s:
Which of the following is an example of a step in the collection of client information stage of financial management?
Which of the following is least likely correct?
Which of the following statements is not true with regards to bankruptcy?
Which of the following is not a step in the synthesis and recommendation stage of financial management?
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