AAMS All Chapters Questions with Verified
Correct Answers
Which one of these best describes the requirements of an investment strategy?
Competencies, resources, goal, method
Which one of the following industries would be expected to perform well in the early
stage of an economic expansion?
Consumer credit
Which one of the following indicators would a contrarian investor interpret as a bearish
indicator?
A decreased short-interest ratio
All of the follow are true regarding the P/E ratio, except
it is an absolute measure of a stock valuation.
Which one of the following is a bearish contrarian signal?
A low put-call ratio
One reason to use active investment management is
the potential for downside protection.
Which one of the following industries tends to do well in the late stage of an economic
expansion?
capital goods
Dreman's advice to the investor centers on three rules. Which of the following is NOT
one of those rules?
, Select only industry average P/E stocks
Growth stocks typically have which of these characteristics?
I. Low P/E ratios
II. High profit margins
III. High betas
IV. Large dividends
II and III
One of the characteristics regarding growth stocks is that the earnings per share growth
rate should be at least what percentage?
15%
Which one of the following is not a characteristic of a growth stock?
low to average betas
Assume an investor sells a 25-year, A rated, 2% municipal bond and reinvests in a 30-
year A rated 3% municipal bond. Both bonds are callable in five years. Which one of
the following is likely to occur with this pure yield pickup strategy?
Call risk is increased.
All of these are itemized deductions from adjusted gross income EXCEPT
traditional IRA contributions.
Which one of the following is a tax preference item or adjustment for purposes of the
alternative minimum tax?
bargain element on exercise of an ISO
When determining the taxation on capital gains or losses, the first step is
Correct Answers
Which one of these best describes the requirements of an investment strategy?
Competencies, resources, goal, method
Which one of the following industries would be expected to perform well in the early
stage of an economic expansion?
Consumer credit
Which one of the following indicators would a contrarian investor interpret as a bearish
indicator?
A decreased short-interest ratio
All of the follow are true regarding the P/E ratio, except
it is an absolute measure of a stock valuation.
Which one of the following is a bearish contrarian signal?
A low put-call ratio
One reason to use active investment management is
the potential for downside protection.
Which one of the following industries tends to do well in the late stage of an economic
expansion?
capital goods
Dreman's advice to the investor centers on three rules. Which of the following is NOT
one of those rules?
, Select only industry average P/E stocks
Growth stocks typically have which of these characteristics?
I. Low P/E ratios
II. High profit margins
III. High betas
IV. Large dividends
II and III
One of the characteristics regarding growth stocks is that the earnings per share growth
rate should be at least what percentage?
15%
Which one of the following is not a characteristic of a growth stock?
low to average betas
Assume an investor sells a 25-year, A rated, 2% municipal bond and reinvests in a 30-
year A rated 3% municipal bond. Both bonds are callable in five years. Which one of
the following is likely to occur with this pure yield pickup strategy?
Call risk is increased.
All of these are itemized deductions from adjusted gross income EXCEPT
traditional IRA contributions.
Which one of the following is a tax preference item or adjustment for purposes of the
alternative minimum tax?
bargain element on exercise of an ISO
When determining the taxation on capital gains or losses, the first step is
