Unit 5 - Questions

benefits of investing in a DPP would include I. high liquidity II. flow through of operating losses III. limited liability IV. immunization against tax audit

II and III

although there can be many benefits to investing in an oil and gas limited partnership drilling program, risks include

all of the above

all of the following would be considered passive real estate investing except

buying homes and managing the rental of them

a DPP is a form of business entity, it may purchase real estate, drill for oil or gas, or engage in a number of other business activities. which of the following statements is true?

management of the enterprise is always in the hands of the general partner(s)

many investors look at precious metals as a hedge against inflation. those investors would be most likely to own

platinum

all of the following are characteristics of equity linked notes (ETNs) except

they are equity securities

inverse ETFs are least suitable for investors

with a long time horizon

among the reasons for investors to consider investing in real estate would be all of the following except

a high correlation with stock market returns

one of the ways that investing in real estate limited partnership (RELP) differs from investing in a REIT that

the DPP is a pass-through for both income and loss, while the REIT does not pass through losses

in a direct participation program, liability for the debts of the buiness falls upon the

general partner(s)

although it is widely agreed that adding precious metals to a portfolio can potentially increase returns, doing so is not without risk. risks that investors face with this asset class include

all of the above

investors interested in adding precious metals to their portfolios would likely consider

gold

your customer, age 68, is in reasonably good health. after the sale of her business, the need for maintaining a $1 million whole life insurance policy is questionable. which of the following would be a reasonable recommendation if the decision were made that the policy is no longer needed?

engage in a life settlement sale

an investor is reading a report that industrial demand for copper is expected to double in the next 5 years. this might lead the investor to

invest in several copper mining companies