AAMS
All of the following are major steps in the asset management process except A) Making and implementing recommendations
B) Gathering Data
C) Establishing Goals
D) Establishing an asset allocation policy - Answer D) Establishing an asset allocation policy
Stefan's business plan includes the following goal: "I will contact 50 prospective clients and document this activity in the CRM for tracking purposes."
Which primary element of a good goal is missing? This goal is not A) achievable.
B )relevant.
C) time-framed.
D) specific. - Answer C) time-framed.
The acronym to remember for goal setting is S.M.A.R.T, which stands for Specific, Measurable, Achievable, Relevant, and Time-Framed. The flaw in this goal is that it is not time-framed
Which one of the following is NOT an invested asset?
A) Real estate investment trust
B) 401(k) account
C) 180-day certificate of deposit D) Individual brokerage account - Answer C) 180-day certificate of deposit
Victoria Gregory's financial situation is as follows:
Cash/cash equivalents$15,000
Short-term debts$23,000
Long-term debts$140,000
Taxes$8,000
Invested assets$45,000
Use assets$192,000
What is her net worth?
A) $112,000
B) $89,000
C) $81,000
D) $252,000 - Answer B) $89,000
Assets = Cash/cash equivalents + Invested assets + Use assets ($15,000 + $45,000 + $192,000 = $252,000). Liabilities = Short-term debts + Long-term debts ($23,000 + $140,000 = $163,000). Assets - Liabilities = Net Worth, so $252,000 - $163,000 = $89,000.
Which one of the following statements best describes the income statement?
A) The income statement indicates, as of a definite date, the client's receipts and disbursements.
B) The income statement indicates, as of a definite date, what an individual owns and owes.
C) The income statement indicates, for a certain period of time, the growth of a client's assets and liabilities.
D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. - Answer D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. All of the following provide a clearer picture of the client's needs except
A) anticipated retirement lifestyle.
B) the current rate of inflation.
C) bad experiences with particular investments.
D) Succession planning in place for a client involved in ownership of a small business. - Answer B) the current rate of inflation.
The current rate of inflation does not specifically provide insight into a client's needs, although the rate of future inflation anticipated by the client will have an impact on the client's future needs.
Which one of the following is considered a "foundation" goal?
A) College funding
B) Emergency fund
C) Mortgage payoff
D) Retirement savings - Answer B) Emergency fund
Which one of these is the best written financial goal?
A) Acquire $300,000 for retirement
B) Accumulate $15,000 for a boat purchase in two years
C) Make money in the stock market
D) Establish a fund for purchasing a second home in five years - Answer B) Accumulate $15,000 for a boat purchase in two years
What is the appropriate date to identify the statement of financial position of a calendar-year client for the year 20XX?
A) At December 31, 20XX
B) For the period beginning January 1, 20XX
C) For the period from January 1 to Decemebr 31, 20XX
D) At January 1, 20X1 - Answer A) At December 31, 20XX How are assets valued on a statement of financial position?
A) Residual value
B) Actual cash value
C) Replacement value
D) Fair market value - Answer D) Fair market value
All of these are topics that needs to be clarified before making investment recommendations except
A) the client's goals.
B) risk parameters of the client.
C) basis for portfolio review.
D) time horizons of the goals. - Answer C) basis for portfolio review.
All of these are attributes of a good business plan except the plan
A) is written.
B) only includes business-related goals.
C) includes realistic action steps.
D) is shared with someone. - Answer B) only includes business-related goals.
When the personal circumstances of a client change, which asset management step does the investment professional return to?
A) Analyzing information
B) Monitoring performance
C) Implementing recommendations
D) Data gathering - Answer D) Data gathering
Which of these is the most important factor in establishing trust with a client?
A) Speaking with confidence
B) Demonstrating professionalism and honesty
C) Having a pleasant manner
All of the following are major steps in the asset management process except A) Making and implementing recommendations
B) Gathering Data
C) Establishing Goals
D) Establishing an asset allocation policy - Answer D) Establishing an asset allocation policy
Stefan's business plan includes the following goal: "I will contact 50 prospective clients and document this activity in the CRM for tracking purposes."
Which primary element of a good goal is missing? This goal is not A) achievable.
B )relevant.
C) time-framed.
D) specific. - Answer C) time-framed.
The acronym to remember for goal setting is S.M.A.R.T, which stands for Specific, Measurable, Achievable, Relevant, and Time-Framed. The flaw in this goal is that it is not time-framed
Which one of the following is NOT an invested asset?
A) Real estate investment trust
B) 401(k) account
C) 180-day certificate of deposit D) Individual brokerage account - Answer C) 180-day certificate of deposit
Victoria Gregory's financial situation is as follows:
Cash/cash equivalents$15,000
Short-term debts$23,000
Long-term debts$140,000
Taxes$8,000
Invested assets$45,000
Use assets$192,000
What is her net worth?
A) $112,000
B) $89,000
C) $81,000
D) $252,000 - Answer B) $89,000
Assets = Cash/cash equivalents + Invested assets + Use assets ($15,000 + $45,000 + $192,000 = $252,000). Liabilities = Short-term debts + Long-term debts ($23,000 + $140,000 = $163,000). Assets - Liabilities = Net Worth, so $252,000 - $163,000 = $89,000.
Which one of the following statements best describes the income statement?
A) The income statement indicates, as of a definite date, the client's receipts and disbursements.
B) The income statement indicates, as of a definite date, what an individual owns and owes.
C) The income statement indicates, for a certain period of time, the growth of a client's assets and liabilities.
D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. - Answer D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. All of the following provide a clearer picture of the client's needs except
A) anticipated retirement lifestyle.
B) the current rate of inflation.
C) bad experiences with particular investments.
D) Succession planning in place for a client involved in ownership of a small business. - Answer B) the current rate of inflation.
The current rate of inflation does not specifically provide insight into a client's needs, although the rate of future inflation anticipated by the client will have an impact on the client's future needs.
Which one of the following is considered a "foundation" goal?
A) College funding
B) Emergency fund
C) Mortgage payoff
D) Retirement savings - Answer B) Emergency fund
Which one of these is the best written financial goal?
A) Acquire $300,000 for retirement
B) Accumulate $15,000 for a boat purchase in two years
C) Make money in the stock market
D) Establish a fund for purchasing a second home in five years - Answer B) Accumulate $15,000 for a boat purchase in two years
What is the appropriate date to identify the statement of financial position of a calendar-year client for the year 20XX?
A) At December 31, 20XX
B) For the period beginning January 1, 20XX
C) For the period from January 1 to Decemebr 31, 20XX
D) At January 1, 20X1 - Answer A) At December 31, 20XX How are assets valued on a statement of financial position?
A) Residual value
B) Actual cash value
C) Replacement value
D) Fair market value - Answer D) Fair market value
All of these are topics that needs to be clarified before making investment recommendations except
A) the client's goals.
B) risk parameters of the client.
C) basis for portfolio review.
D) time horizons of the goals. - Answer C) basis for portfolio review.
All of these are attributes of a good business plan except the plan
A) is written.
B) only includes business-related goals.
C) includes realistic action steps.
D) is shared with someone. - Answer B) only includes business-related goals.
When the personal circumstances of a client change, which asset management step does the investment professional return to?
A) Analyzing information
B) Monitoring performance
C) Implementing recommendations
D) Data gathering - Answer D) Data gathering
Which of these is the most important factor in establishing trust with a client?
A) Speaking with confidence
B) Demonstrating professionalism and honesty
C) Having a pleasant manner
