Orion Series 65 Exam 5 (Sept. 2021)
Timing
A popular funding technique that involves investing the same amount at regular intervals is known as dollar cost averaging. Participating in this funding approach tends to lessen which risk?
Complex trust
A professional tennis player comes to you seeking advice on setting up a trust. She is interested in giving to charity and also wants discretion as to when income is distributed to the beneficiaries, her parents. Which trust do you advise she use?
growth investing.
An investment strategy where a higher price is paid for a stock based on expected returns is:
domicile of the investor
An investor diversifying a corporate bond portfolio does NOT consider:
long-term capital loss
An investor purchaes 500 shares of stock on January 10th at $50 per share and sells it on August 4th of the following year for $40 per share. As a result, the investor has realized a:
dollar cost averaging.
An investor wishes to save for her retirement. She arranges to ahve $250 per month withdrawn from her account to be invested into a community fund. This type of saving plan is called:
II and III, gold watch and Keogh plan
Assets that might be found on a family balance sheet include:
Growth.
Buying stocks with high PE ratios normally reflects which of the following investment styles?
Which of the following statements about C corporations are TRUE?
I and II; A C corporation pays income tax on its earnings at the corporate level; The income of C corporations is subject to double taxation.
Asset allocation is an important element of the portfolio management process because:
I, II, III, and IV; different asset classes have different risk and return characteristics; research indicates that asset allocation is much more important than security selection; portfolios that are focused on different asset classes will have very different returns over time; investors may prefer returns in different forms (e.g., income or capital appreciation)
C corporation
If 150 investors want to form a corporation to limit their financial liability to the amount of money they invest and do not want to be responsible for any debt that the corporation incurs, they would most likely form a(n):
Current income and cash flow requirements.
If a new client has $200,00 to invest and wants to retire in 15 years, which of the following client information is least necessary for an adviser to recommend a suitable investment program?
portfolio optimization.
The concept of creating a model protfolio, through asset allocation principles, taht both increases return and reduces risk is known as:
the company's financial statements.
There are several popular investment styles and, in many cases, portfolio managers use a blended approach to security selection. If a portfolio manager adhered to a pure value style, he would put most of his focus on:
Municipal bond interest.
Which of the following is federally tax exempt for a corporation?
An analyst picks company names out of a hat
Which of the following market analysts is using the efficient market theory?
No tax.
Your daughter is getting married and, to celebrate, you give her fiance a beautiful watch that you purchased for $5,575. What are the tax consequences of this gift?
A limited liability company is
a company with tax consequences similar to a partnership
Value investors
seek securities that are undervalued or selling for less than their intrinsic value.
Tactical asset allocation
Which of the following portfolio management styles would most likely incur the highest transaction costs?
