SIE Chapter 8

A registered representative must obtain written verification of an investor's net worth in the form of a subscription agreement for which of the following investments? a. variable contract b. direct participation program c. real estate investment trust d. unit investment trust

B

Qualified disability-related expenses for an ABLE account include all of the following EXCEPT a. rent b. college textbooks for a sibling c. wheelchair d. doctor's visits

B

All of the following are oil and gas DPPs, EXEPT a. income programs b. new construction c. wildcatting d. exploratory drilling

B - new construction is a type of real estate LP

In evaluating a limited partnership, which is the most important consideration? a. avoidance of IRS audit b. tax benefits c. liquidity d. economic viability

D. or profit motive - if a LP's primary goal is tax advantage, the IRS will deem the LP to be abusive

Which of the following is NOT correct regarding 529 plans? a. contributions grow tax deferred b. they allow for an accelerated gift per donor c. qualified withdrawals are taxed as ordinary income d. rules and provisions may vary by state

C

Local government investment pools (LGIPs) offer all of the following benefits EXCEPT a. check writing features b. protection of principal c. wide array of investment options d. cash managment

C.

A parent has been using distributions from a 529 plan to pay for her son's college education. In his spare time and unrelated to his college curriculem, the son decides to start a business and needs $15000 in seed money. If $15000 is withdrawn from the 529 plan to cover this venture, what are the implications? a. 10% penalty, but no tax implications b. no penalty, no tax implications c. no penalty, but ordinary income taxes on earnings d. 10% penalty and ordinary income taxes on earnings

D

An investor's eldest child is about to graduate from high school and is not planning on attending any higher education program. What options does the investor have regarding the 529 plan which was established for this child? a. the balance may be withdrawn without penalty b. the parent may use the funds to purchase a primary residence c. the funds will be forfeited d. the funds may be transferred to a sibling without penalty

D

Qualified higher education expenses in a 529 plan include which of the following expenses for elementary and secondary public school? a. books and supplies b. none; only postsecondary education expenses are allowed c. unlimited expenses d. $10000 in tuition

D

When a general partner is organizing and establishing a limited partnership, the general partner is acting as a a. property manager b. partnership manager c. underwriter d. syndicator

D

A subscription for a limited partnership(LP) is deemed to be accepted when a. the general partner reviews, approves, and signs the subscription agreement b. the certificate is filed with the state c. the limited partner signs the subscription agreement d. the limited partner's check clears

A

All of the following are benefits of direct-sold 529 plans EXCEPT a. fees related to sales charges b. lower fees in general c. possible reduced administrative and maintenance charges for residents d. ease of enrolling online and electronic document delivery

A

The best definition of a local governments investment pool (LGIP) is an investment pool established to provide a. short-term funding for state and local government entities b. long-term funding for state and local government entities c. long-term funding for federal government entities d. short-term funding for federal government entities

A

In a limited partnership (LP), a. distributions avoid double taxation b. the general partner has limited liability c. the general partner and limited partner have the same liability d. the primary goal of the entity is to provide tax advantages to the owners

A.

Which of the following is NOT a municipal fund security? a. REIT b. ABLE account c. LGIP d. 529 college savings plan

A. - municipal funds securities are issued by state and local governments and are not reuqired to register with the SEC and are exempt from the rules of the Investment Company Act of 1940 - they are regulated by the Municipal Securities Rulemaking Board