AWMA LATEST EVALUATION 2026 SET
QUESTIONS AND ANSWERS SURE A+
✔✔Which of these would a contrarian investor interpret as a bullish indicator?
A) Decreased short selling
B) Bullish specialist sentiment
C) Low put-call ratio
D) Small cash positions in mutual funds - ✔✔Bullish specialist sentiment
Specialists are considered "smart money" and, therefore, if they are bullish a contrarian
investor would follow their sentiment. If the specialist's total short sales are 65% or more
that is a bearish sign, and if they are 40% or less it is a bullish sign.
Module 3-1
✔✔When a high net worth client is planning to live overseas for an extended length of
time, she should obtain international property insurance for her belongings and
international auto insurance if she intends to drive in the foreign county because her
current policies won't provide the coverage she will need overseas. Which of their other
current insurance policies won't cover this client overseas?
A) Health insurance policy
B) Inland marine policy with worldwide coverage
,C) Liability umbrella policy with worldwide coverage
D) None of these. They all provide coverage overseas the same as they would in the
U.S. - ✔✔A) Health insurance policy
Module 4-4
✔✔Your client, John, is 72 years old. He has started taking required minimum
distributions from his 401(k), which has grown to over $3 million. He currently has no
IRA account. His RMDs are mostly an annoyance, as he does not need the funds to
cover his living expenses, and he does not want to leave too much of an inheritance to
his children. What planning option might you discuss with John?
A) None of these.
B) John could utilize a qualified charitable distribution from his 401(k) to his favorite
veteran's group.
C) John could roll over a portion of the funds from his 401(k) to an IRA, and then
execute a qualified charitable distribution from his IRA to his alma mater, the University
of Notre Dame.
D) John could utilize a qualified charitable distribution from his 401(k) to his alma mater,
the University of Notre Dame. - ✔✔C) John could roll over a portion of the funds from
his 401(k) to an IRA, and then execute a qualified charitable distribution from his IRA to
his alma mater, the University of Notre Dame.
Because John is over age 70½, he may utilize a qualified charitable distribution;
however, the distribution must be made to a 50% organization—churches, schools, Red
Cross, governmental units, etc. The contribution may not go to a 30% organization—
veteran's groups, fraternal organizations, etc. The distribution must be from an IRA, and
it is perfectly acceptable for the IRA funds to come from a rollover.
Module 5-5
✔✔Brant is a participant in his company's stock bonus plan that was established many
years ago when the company contributed 1,000 shares of its stock to Brant's plan
account. At the time, these shares were each valued at $15. During the current year,
Brant took a lump-sum distribution from the plan and sold his shares for $25 each. Brant
elects to use NUA treatment. Brant will have to report ordinary income for the current
year equal to which amount?
A) $5,000
B) $20,000
C) $15,000
D) $10,000 - ✔✔C) $15,000
Brant is immediately taxed on the cost, or basis, of the securities received, and at
ordinary income rates. Hence, he would have to include $15,000 (1,000 shares × $15
cost basis) as ordinary income for the current year. Brant's net unrealized appreciation
(NUA) in the distribution is taxed during the current year. His NUA equals $10 per share
, ($25 per share less $15 per share), so he also will have to report a long-term capital
gain of $10,000 ($10 NUA per share × 1,000 shares).
Module 5-5
✔✔Which statement correctly describes when a bypass trust should be used by a
grantor?
A) When the grantor wants to give their spouse a general power of appointment over
trust assets
B) When the grantor wants to include persons other than their spouse as income
beneficiaries
C) When the grantor wants to be able to make an election to receive a marital deduction
for trust assets
D) When a grantor wants to use the marital deduction for the value of all assets placed
in trust - ✔✔B) When the grantor wants to include persons other than their spouse as
income beneficiaries
All trusts that qualify for the marital deduction must name the grantor's spouse as the
sole income beneficiary. Because the grantor of a bypass trust wants to control who will
receive the trust assets at the spouse's death, the spouse should not be given a general
power of appointment. A bypass trust cannot qualify for the marital deduction
automatically or by election.
Module 7-4
✔✔One provision of the Sarbanes-Oxley Act of 2002 requires
A) measures to combat money laundering.
B) investment advisers to register with the SEC.
C) the CEO and CFO of a public company to certify the financial information in the
annual report.
D) the SEC to develop a national securities market. - ✔✔C) the CEO and CFO of a
public company to certify the financial information in the annual report.
Module 8-2
✔✔An adviser remains professional while a client is acting agitated during a meeting,
and is actually able to calm the client's emotions and have a successful meeting. Which
level of emotional intelligence is the highest level that adviser has reached?
A) Emotional facilitation
B) Emotional understanding
C) Emotional regulation
D) Emotional perception - ✔✔C) Emotional regulation
Module 1-2
QUESTIONS AND ANSWERS SURE A+
✔✔Which of these would a contrarian investor interpret as a bullish indicator?
A) Decreased short selling
B) Bullish specialist sentiment
C) Low put-call ratio
D) Small cash positions in mutual funds - ✔✔Bullish specialist sentiment
Specialists are considered "smart money" and, therefore, if they are bullish a contrarian
investor would follow their sentiment. If the specialist's total short sales are 65% or more
that is a bearish sign, and if they are 40% or less it is a bullish sign.
Module 3-1
✔✔When a high net worth client is planning to live overseas for an extended length of
time, she should obtain international property insurance for her belongings and
international auto insurance if she intends to drive in the foreign county because her
current policies won't provide the coverage she will need overseas. Which of their other
current insurance policies won't cover this client overseas?
A) Health insurance policy
B) Inland marine policy with worldwide coverage
,C) Liability umbrella policy with worldwide coverage
D) None of these. They all provide coverage overseas the same as they would in the
U.S. - ✔✔A) Health insurance policy
Module 4-4
✔✔Your client, John, is 72 years old. He has started taking required minimum
distributions from his 401(k), which has grown to over $3 million. He currently has no
IRA account. His RMDs are mostly an annoyance, as he does not need the funds to
cover his living expenses, and he does not want to leave too much of an inheritance to
his children. What planning option might you discuss with John?
A) None of these.
B) John could utilize a qualified charitable distribution from his 401(k) to his favorite
veteran's group.
C) John could roll over a portion of the funds from his 401(k) to an IRA, and then
execute a qualified charitable distribution from his IRA to his alma mater, the University
of Notre Dame.
D) John could utilize a qualified charitable distribution from his 401(k) to his alma mater,
the University of Notre Dame. - ✔✔C) John could roll over a portion of the funds from
his 401(k) to an IRA, and then execute a qualified charitable distribution from his IRA to
his alma mater, the University of Notre Dame.
Because John is over age 70½, he may utilize a qualified charitable distribution;
however, the distribution must be made to a 50% organization—churches, schools, Red
Cross, governmental units, etc. The contribution may not go to a 30% organization—
veteran's groups, fraternal organizations, etc. The distribution must be from an IRA, and
it is perfectly acceptable for the IRA funds to come from a rollover.
Module 5-5
✔✔Brant is a participant in his company's stock bonus plan that was established many
years ago when the company contributed 1,000 shares of its stock to Brant's plan
account. At the time, these shares were each valued at $15. During the current year,
Brant took a lump-sum distribution from the plan and sold his shares for $25 each. Brant
elects to use NUA treatment. Brant will have to report ordinary income for the current
year equal to which amount?
A) $5,000
B) $20,000
C) $15,000
D) $10,000 - ✔✔C) $15,000
Brant is immediately taxed on the cost, or basis, of the securities received, and at
ordinary income rates. Hence, he would have to include $15,000 (1,000 shares × $15
cost basis) as ordinary income for the current year. Brant's net unrealized appreciation
(NUA) in the distribution is taxed during the current year. His NUA equals $10 per share
, ($25 per share less $15 per share), so he also will have to report a long-term capital
gain of $10,000 ($10 NUA per share × 1,000 shares).
Module 5-5
✔✔Which statement correctly describes when a bypass trust should be used by a
grantor?
A) When the grantor wants to give their spouse a general power of appointment over
trust assets
B) When the grantor wants to include persons other than their spouse as income
beneficiaries
C) When the grantor wants to be able to make an election to receive a marital deduction
for trust assets
D) When a grantor wants to use the marital deduction for the value of all assets placed
in trust - ✔✔B) When the grantor wants to include persons other than their spouse as
income beneficiaries
All trusts that qualify for the marital deduction must name the grantor's spouse as the
sole income beneficiary. Because the grantor of a bypass trust wants to control who will
receive the trust assets at the spouse's death, the spouse should not be given a general
power of appointment. A bypass trust cannot qualify for the marital deduction
automatically or by election.
Module 7-4
✔✔One provision of the Sarbanes-Oxley Act of 2002 requires
A) measures to combat money laundering.
B) investment advisers to register with the SEC.
C) the CEO and CFO of a public company to certify the financial information in the
annual report.
D) the SEC to develop a national securities market. - ✔✔C) the CEO and CFO of a
public company to certify the financial information in the annual report.
Module 8-2
✔✔An adviser remains professional while a client is acting agitated during a meeting,
and is actually able to calm the client's emotions and have a successful meeting. Which
level of emotional intelligence is the highest level that adviser has reached?
A) Emotional facilitation
B) Emotional understanding
C) Emotional regulation
D) Emotional perception - ✔✔C) Emotional regulation
Module 1-2
