SERIES 7 SUITABILITY EXAM
QUESTIONS AND ANSWERS
C A balanced fund (Asset Allocation/Portfolio Construction) - ANSWER
Which investment portfolio is the most stable among the following?
A vigorous growth fund
B A fund for income
C A well-rounded fund
D A fund for specialization
B Active asset management (Asset Allocation/Portfolio Construction)
ANSWER The following is the name of the portfolio management strategy that
uses a market index as a performance standard that the asset manager must
surpass:
An approach to asset management that is passive
B Strategic asset management C Tactical asset management C Active asset
development
C tactical asset management (asset allocation/portfolio construction) ANSWER
According to an asset allocation plan, the goal allocation for a certain asset class
has been set at 20% of total assets. This proportion may be decreased to 15% by
the manager, or it may be raised to 25% if the manager so chooses. If the
manager takes this step, it is referred to as:
A rebalance of the portfolio
B. Strategic asset management
C asset management that is tactical D asset management that is active
C The anticipated lifespan of that individual (Asset Allocation/Portfolio
Construction) ANSWER When building a portfolio for someone who will
retire in a few years, the following time horizon should be used:
A person's remaining time till retirement B their anticipated time until they are
unable to care for themselves C their anticipated lifetime D their beneficiaries'
expected lifetime
QUESTIONS AND ANSWERS
C A balanced fund (Asset Allocation/Portfolio Construction) - ANSWER
Which investment portfolio is the most stable among the following?
A vigorous growth fund
B A fund for income
C A well-rounded fund
D A fund for specialization
B Active asset management (Asset Allocation/Portfolio Construction)
ANSWER The following is the name of the portfolio management strategy that
uses a market index as a performance standard that the asset manager must
surpass:
An approach to asset management that is passive
B Strategic asset management C Tactical asset management C Active asset
development
C tactical asset management (asset allocation/portfolio construction) ANSWER
According to an asset allocation plan, the goal allocation for a certain asset class
has been set at 20% of total assets. This proportion may be decreased to 15% by
the manager, or it may be raised to 25% if the manager so chooses. If the
manager takes this step, it is referred to as:
A rebalance of the portfolio
B. Strategic asset management
C asset management that is tactical D asset management that is active
C The anticipated lifespan of that individual (Asset Allocation/Portfolio
Construction) ANSWER When building a portfolio for someone who will
retire in a few years, the following time horizon should be used:
A person's remaining time till retirement B their anticipated time until they are
unable to care for themselves C their anticipated lifetime D their beneficiaries'
expected lifetime
