Practice Exam 1 Review
T/F? A global Mutual Fund will consist of securities domiciled outside the US only
false
T/F? An International Mutual Fund will consist of securities domiciled inside and outside the US
false
T/F? An adviser who exercises discretion in client accounts would be required to include a balance sheet in their brochures
false
T/F? An adviser who maintains less than $35,000 in net worth would be required to include a balance sheet in their brochures
false
T/F? An investment adviser may not have custody of a customer's funds and securities under the Uniform Securities Act if the adviser is not a registered broker-dealer
false
T/F? Any security issued by a bank that is federally regulated is covered under the USA.
false
T/F? Class A shares are less expensive for investors with a short time horizon
false
T/F? Class B shares are less expensive for investors with a short time horizon
false
T/F? Current yield is calculated using Annual interest payment divided by par value
false
T/F? Current yield is calculated using Yield to maturity divided by current market price
false
T/F? Current yield is calculated using Yield to maturity divided by par value
false
T/F? ERISA regulations are primarily focused on the tax-related aspects of qualified plans, such as qualification of contributions and rollover distributions
false
T/F? If a person is over the income limit, they may not contribute to a traditional IRA
false
T/F? If a policy is surrendered, it is always tax free
false
T/F? In order to allow for performance based compensation while managing an investment company a majority of the shareholders in the investment company are qualified investors
false
T/F? In order to allow for performance based compensation while managing an investment company the individual in charge of the investment company is a qualified investor
false
T/F? In order to determine initial deposit requirements to fund a child's college expenses, the least important information is the age of the child
false
T/F? In order to determine initial deposit requirements to fund a child's college expenses, the least important information is the current college costs
false
T/F? In order to determine initial deposit requirements to fund a child's college expenses, the least important information is the expected inflation rate
false
T/F? Investment advisers whose only clients are banks are exempt from registration requirements of the Investment Advisers Act of 1940
false
T/F? Life insurance policies are transferrable
false
T/F? Municipal bonds are exempt from the USA if issued by a municipality in the United States only
false
T/F? Only people under the income limit can open a traditional IRA
false
T/F? Section 404(c) of ERISA deals with tax qualifications of the plan
false
T/F? State banks are covered by the USA if regulated by that state
false
T/F? The death benefit paid on an variable life insurance policy is always tax free
false
T/F? The death of a partner with a minority interest in an IA firm would be considered assignment of a contract
false
T/F? The investment adviser has discretionary authority over the client's account would be considered custody
false
T/F? Under ERISA, The fiduciary is required to specifically invest for maximum gain.
false
T/F? When a tenant of a TIC account passes away, their share of the account goes to the surviving tenant
false
T/F? When acting in principal capacity, an IA must obtain consent of the advisory client in any circumstance
false
T/F? A global Mutual Fund will consist of securities domiciled inside and outside the US
true
T/F? A loan taken against the policy cash value is always tax free
true
T/F? An International Mutual Fund will consist of securities domiciled outside the US only
true
T/F? An S Corporation would lose their tax benefits if 1 new member is a nonresident alien.
true
T/F? An S Corporation would lose their tax benefits if 150 new investors buy into the corporation during the year.
true
T/F? An S Corporation would lose their tax benefits if 50% of the corporation's income is derived from passive investments in limited partnerships.
true
T/F? An S Corporation would lose their tax benefits if The corporation issues several classes of stock.
true
T/F? An adviser who maintains custody over client funds and securities would be required to include a balance sheet in their brochures
true
T/F? An adviser who, 6 or more months in advance, collects prepaid fees of more than $500 would be required to include a balance sheet in their brochures
true
T/F? An investment adviser may not have custody of a customer's funds and securities under the Uniform Securities Act if there is a rule in the state barring such custody
true
T/F? Any security issued by a bank that is federally regulated is exempt under the USA
true
T/F? Anyone with earned income can open a traditional IRA
true
T/F? Class C shares are less expensive for investors with a short time horizon
true
T/F? Client funds and securities are kept at a qualified custodian would be considered custody
true
T/F? Current yield is calculated using Annual interest payment divided by current market price
true
T/F? ERISA regulations are primarily focused on the non-tax aspects of qualified plans, such as nondiscrimination rules and fiduciary obligations
true
T/F? Foreign investment advisers with fewer than 15 clients per year who do not hold themselves out as investment advisers to the public and have less than $25 million in AUM in the United States are exempt from registration requirements of the Investment Advisers Act of 1940
true
T/F? If a person is over the income limit, their traditional IRA contributions may not be deducted
true
T/F? In order to allow for performance based compensation while managing an investment company the investment company has net worth of at least in excess of $2.2 million or will place at least $1 million in assets under management with the IA
true
T/F? In order to determine initial deposit requirements to fund a child's college expenses, the least important information is the Parent's salary
true
T/F? Investment advisers who conduct all of their business in 1 state and who do not provide advice on securities listed on an exchange and have no private funds as clients are exempt from registration requirements of the Investment Advisers Act of 1940
true
T/F? Life insurance policies are nontransferrable
true
T/F? Municipal bonds are exempt from the USA if issued by a municipality in the United States or Canada
true
T/F? Section 404(c) of ERISA deals with fiduciary responsibilities
true
T/F? State banks are exempt from the USA if regulated by that state
true
T/F? State banks are exempt if regulated by that state
true
T/F? The client makes a partial purchase, and the broker-dealer holds the securities until full payment is made would be considered custody
true
T/F? The death of a partner with a minority interest in an IA firm would not be considered assignment of a contract
true
T/F? Under ERISA, The fiduciary is not required to specifically invest for maximum gain.
true
T/F? When a tenant of a TIC account passes away, their share of the account goes to their estate
true
T/F? When acting in principal capacity, an IA does not need to obtain consent if the transaction was unsolicited
true
