AWMA Exam Study Guide With 100% Complete Solution

AWMA Exam Study Guide With 100%
Complete Solution
BabyiboomersiandiolderiGeniXers,iasicompareditoimil
lennialsiandiyoungeriGeniXers
haveifinancialiplanningineedsithatihaveistayedirelativ
elyitheisameioverimanyiyears.



Danihasibondsimaturingiinitwoiweeks.iSinceiheiboug
htitheibonds,iinterestiratesihaveifallen.iToiwhichioneit
heseirisksiareiDan'sibondsimostilikelyitoibeisubject?
Reinvestmentirateirisk


Theirelationshipibetweeniinvestmentistrategyiandiin
vestmentipolicyiisioneiiniwhich
investmentistrategyiisisubservientitoiinvestmentipoli
cy.


IfiABCiCorporationihasinetiprofitsiofi$100,000iandidis
tributesi$50,000iasidividends,iwhatiisiitsitaxableiinco
me?
$100,000



Joseph,iagei60,iisiaitaxpayeriwhoihasiaiconsiderableia
mountiofiincomeithatiisinotisubjectitoiwithholding.iH
eihasinotimadeianyiestimatedipaymentsiduringitheiye
ar.iAtiaiplanningireviewisessioniinimid-

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,December,ihisiadviseriinformsihimithatihe'siapproxi
matelyi$25,000iunderwithheld.iWhaticourseiofiaction
imightiJosephifollowitoiavoidianiunderpaymentipenalt

y?
Initiateiai$25,000idistributionifromihisiIRAiaccount,i
andidirectithati100%iofitheidistributionibeiwithheldif
orifederaliincomeitaxibeforeiyear-
end.iThisiwillimakeiupiforianyiunderwithholding.


Whichiofitheseistatementsiaccuratelyidescribeichara
cteristicsiofiusingilifeiinsuranceiforitheiinformalifund
ingiofiainonqualifiedideferredicompensationiplan?

1.)iItirepresentsianiassetithatimayibeipurchaseditoifu
nditheiemployer'siunsecuredipromiseitoipayideferredi
amountsitoitheiemployee.

2.)iItioffersitheiadvantageiofibeingiableitoifundiaideat
hibenefitiimmediately.

3.)iItioffersitheiadvantageiofivariousisettlementioptio
ns.

4.)iItioffersitheiadvantageiofisimplifiediadministratio
nisinceideathiproceedsiareipaididirectlyitoianiemploye
e'sisurvivingispouseioriotheribeneficiary.
1,2,iandi3


Whichistatementibestiexplainsitheiunauthorizediprac
ticeiofilaw?




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,Ainon-
attorneyiwhoiadvisesiaiclientitoitakeiactionsithatiwilli
affectitheiripropertyiorilegalirights



Changesithatihaveioccurredisinceiinvestmentifirmsic
hangedifromiprivateipartnershipsitoipubliclyitradedic
ompaniesiincludeialliofitheseiexcept
thereiisigreateriindividualiaccountability.



Theimostiimportantistatedilifeigoaliofiwealthyiindivid
ualsiis
maintainingigoodihealth.


Wilsonihasiai$20,000iportfolioiofifouridifferentistock
s.iTheidistributioniofithisicapitalianditheibetasiofithes
eistocksiareishownibelow.

Ai10%i1.1
Bi20%i1.15
Ci30%i1.3
Di40%i1.25
WeightediBetai=i1.23


WhichiofitheseiisianiadvantageiofiequityiREITsioverim
ortgageiREITs?
EquityiREITsicaniparticipateiinitheiappreciationiofith
eiunderlyingiproperties.



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, Susan,iagei50,iisitheisoleishareholderiofiMarketiDesig
nsiInc.,iaismalliconsultingifirm.iAlliofitheiemployeesio
fiMarketiDesignsiareiconsiderablyiyoungerithaniSusa
n,ianditurnoveriisirelativelyihigh.iSusaniisipaidimoreit
hanithreeitimesitheisalaryiofitheinextihighestipaidiem
ployeeiandiwantsitoiinstalliairetirementiplaniforitheic
ompany.iExcludingiSusan,itheioldestiemployeeiisi32.i
Whichitypeiofiplaniwouldibeimostiappropriate,iassum
ingisheiwantsitoimaximizeitheicontributionsiforiheria
ccountiandiminimizeitheicostiofitheiotheriemployees?
Age-weightediprofitisharingiplan



Foritheicurrentitaxiyear,iBob,ianiindividualitaxpayerifi
lingiaijointireturn,ihasi$6,000iofiinvestmentiinterestie
xpenseiandi$11,000iofinetiinvestmentiincomei(intere
stiincomeiandidividends).iHowimuchiinvestmentiinte
restiexpense,iifiany,imayiBobideductiinitheicurrentitax
iyear?

$6,000



Whichistatementibelowidoesinoticorrectlyidescribeiai
conceptirelateditoinonqualifiedideferredicompensati
on?
Aniexampleiofisubstantialiriskiofiforfeitureiprovision
siwouldibeitheiemployee'silossiofirightsitoitheiplanibe
nefitsiatideathioridisability.




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