65 - Unit 17

An agent must obtain written verification of an investor's net worth for which of the following investments?

Direct participation programs

Which of the following must be considered in evaluating the suitability of a DPP investment for a customer?

Risk tolerance Other holdings Financial situation Age

In a DPP, a general partner is all of the following

a key executive who makes day-to-day business decisions. one who buys and sells the program's property. one who appoints the property manager.

An investment adviser who is discussing forward contracts with a client would most likely be referring to an investment in

an agricultural commodity

Active real estate investment would include all of the following

build new and sell. buy, renovate, and sell. buy, hold, and rent.

Lead is

considered a precious metal.

You have a 70-year-old client with a $500,000 whole life insurance policy purchased 25 years ago. The policy currently has a cash value of approximately $150,000. With all of the children on their own and successful, the client no longer feels the need for the insurance, and asks you if there is any option that might result in netting more than surrendering the policy for its cash value. You might recommend

engaging in a life settlement

Among the differences between an investment in a limited partnership offering and in a corporation is that

limited partnership offerings do not pay dividends; corporations do.

Lisa Brownard is considering investing in gold. She owns a portfolio of stocks, bonds, and money market securities. Relative to her existing portfolio, the primary benefit of the gold investment is most likely

low correlation between traditional asset returns and gold.

Many sophisticated investors have added alternative investments to their portfolios. Benefits in doing so would include

portfolio diversification

Commodities contracts are available on

precious metal

A RELP is a

real estate limited partnership (DPP) and, as a limited partner, legally, the investor can only take a passive role

A life settlement, involves

selling an existing life insurance policy for an amount in excess of the cash value

In search of higher returns, many investors have turned to alternative investments, such as structured products. Non-exchange-traded structured securities products (SSPs) typically have

some form of embedded derivatives

Section 1031 permits a

tax-free exchange of one property for another

It would be correct to state that an inverse ETF

utilizes derivatives to achieve its objectives.

A viatical sale would generally involve

an individual with a terminal illness.

If an investor was of the opinion that the market was going to have a bad day, to maximize that investor's gains, you might recommend

an inverse leveraged ETF

Commodity futures contracts are available on all of the following

industrial metals. soybeans. eggs.

A feature common to all passive real estate investing is

someone other than the investor is doing the management.

One of your clients is considering allocating about 10% of her portfolio to commodities. Her current portfolio is a mix of stocks, bonds, and broad market index ETFs. Relative to her existing portfolio, you would explain to her that the primary benefit of the commodity investment is most likely

commodity returns have a low or negative correlation to the other assets in her portfolio.

When a client is interested in investing in commodities, you would expect to discuss

soybeans, wheat, and corn

A number of different pooled investment vehicles are included in the term "alternative investment." One of them, a synthetic investment instrument that has been created to meet a specific need that cannot be met by a standardized financial instrument, is known as

a structured product

Among the characteristics of leveraged exchange-traded funds is that

leveraged ETFs may be purchased on margin