AAMS All Modules exam review question
and answers 2024
An employer plans to use corporate-owned life insurance to informally fund a
nonqualified deferred compensation agreement and wants flexibility regarding
investment choices. Which one of the following types of life insurance should this
employer choose? - Variable life insurance
The latest economic reports have been gloomy, and the stock market is in a
protracted slump. Most of your regular stock customers are selling out their
positions. A new client, Mr. Jones, sees these conditions as a buying opportunity.
You would define his investment personality as - contrarian
As of December 31, 20X1, Bob Larkin has the following financial data:
Bond fund $17,000
Residence$400,000
Vested 401(k) plan$95,000
Auto notes$16,000
Residence mortgage$285,000
Auto payments$7,000
Automobiles$45,000
Checking account$8,000
,AAMS All Modules exam review question
and answers 2024
Utilities$4,000
CD$15,000
Stock$125,000
Home equity loan$40,000
What is Bob's net worth? - $364,000
Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 + $125,000 =
$705,000. Liabilities = $16,000 + $285,000 + $40,000 = $341,000, so net worth is
$364,000. Notice that auto notes of $16,000 are included in this calculation, but
auto payments of $7,000 is a cash flow item and therefore not included.
For the year ending December 31, 20X2, Ted Jones has the following financial
information:
Salaries$70,000
Auto payments$5,000
Insurance$3,800
Food$8,000
,AAMS All Modules exam review question
and answers 2024
Credit card balance$10,000
Dividends$1,100
Utilities$3,500
Mortgage payments$14,000
Taxes$13,000
Clothing$9,000
Interest income$2,100
Checking account$4,000
Vacations$8,400
Donations$5,800
What is the surplus or (deficit) for Ted? - $2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 +
$8,000 + $3,500 + $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so
there is a surplus of $2,700
, AAMS All Modules exam review question
and answers 2024
Which one of the following statements comparing the suitability and fiduciary
standards is correct? - Legally, suitability disputes are often resolved in arbitration
whereas fiduciary disputes are ultimately resolved in the courts.
Which one of the following types of distributions from a qualified retirement plan
may be subject to mandatory 20% withholding? - indirect rollover
Which one of the following statements regarding a qualified plan is correct? - The
employer's deduction is available in the year that a contribution is made.
All of the following should be agreed upon between the client and the investment
professional when making recommendations based on an investment policy
statement EXCEPT - specific investments.
Which of the following has a direct bearing on which investments are appropriate
for achieving a goal? - the investor's time horizon
One purpose of an investment policy statement is to - provide guidelines around
which the portfolio is to be constructed and managed.
and answers 2024
An employer plans to use corporate-owned life insurance to informally fund a
nonqualified deferred compensation agreement and wants flexibility regarding
investment choices. Which one of the following types of life insurance should this
employer choose? - Variable life insurance
The latest economic reports have been gloomy, and the stock market is in a
protracted slump. Most of your regular stock customers are selling out their
positions. A new client, Mr. Jones, sees these conditions as a buying opportunity.
You would define his investment personality as - contrarian
As of December 31, 20X1, Bob Larkin has the following financial data:
Bond fund $17,000
Residence$400,000
Vested 401(k) plan$95,000
Auto notes$16,000
Residence mortgage$285,000
Auto payments$7,000
Automobiles$45,000
Checking account$8,000
,AAMS All Modules exam review question
and answers 2024
Utilities$4,000
CD$15,000
Stock$125,000
Home equity loan$40,000
What is Bob's net worth? - $364,000
Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 + $125,000 =
$705,000. Liabilities = $16,000 + $285,000 + $40,000 = $341,000, so net worth is
$364,000. Notice that auto notes of $16,000 are included in this calculation, but
auto payments of $7,000 is a cash flow item and therefore not included.
For the year ending December 31, 20X2, Ted Jones has the following financial
information:
Salaries$70,000
Auto payments$5,000
Insurance$3,800
Food$8,000
,AAMS All Modules exam review question
and answers 2024
Credit card balance$10,000
Dividends$1,100
Utilities$3,500
Mortgage payments$14,000
Taxes$13,000
Clothing$9,000
Interest income$2,100
Checking account$4,000
Vacations$8,400
Donations$5,800
What is the surplus or (deficit) for Ted? - $2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 +
$8,000 + $3,500 + $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so
there is a surplus of $2,700
, AAMS All Modules exam review question
and answers 2024
Which one of the following statements comparing the suitability and fiduciary
standards is correct? - Legally, suitability disputes are often resolved in arbitration
whereas fiduciary disputes are ultimately resolved in the courts.
Which one of the following types of distributions from a qualified retirement plan
may be subject to mandatory 20% withholding? - indirect rollover
Which one of the following statements regarding a qualified plan is correct? - The
employer's deduction is available in the year that a contribution is made.
All of the following should be agreed upon between the client and the investment
professional when making recommendations based on an investment policy
statement EXCEPT - specific investments.
Which of the following has a direct bearing on which investments are appropriate
for achieving a goal? - the investor's time horizon
One purpose of an investment policy statement is to - provide guidelines around
which the portfolio is to be constructed and managed.
