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
