Question 1
Which of the following statements about contributions to 403(b) plans are TRUE?
I Employees may contribute by salary reduction
II An employee may transfer funds from a savings account to make up for prior years
III An employee may contribute up to $19,000 by means of salary reduction for 2019
IV The employer decides the amount of the contribution to be made on behalf of the
employees
CORRECT ANSWER
I & III
Question 2
Couple with 2 adult children have established a revocable trust to remove assets from
their taxable estate. After doing so, they find that they are $100,000 over the estate tax
exclusion that qualifies for the maximum unified tax credit of $4,371,600 in 2019. In order
to reduce the size of their taxable estate by $100,000, they can donate:
CORRECT ANSWER
50K to one charity & 50K to another (any charitable contributions reduce the size of the
taxable estate)
Question 3
When looking at the Price/Book Value of a corporation, the numerator on the equation is
based on (market/accounting) value and the denominator is based on the
(market/accounting)
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,CORRECT ANSWER
Market, accounting (market price/common stockholder's equity)
Question 4
A business form that gives a "flow-through" tax benefit and limited liability to owners is
a(n):
CORRECT ANSWER
S Corporation (general partnerships have UNLIMITED liability)
Question 5
For bonds trading at a discount, rank the yield measures from lowest to highest:
- YTM
- YTC
- Current
- Nominal
CORRECT ANSWER
Nominal, Current, YTM, YTC
Question 6
Insurance company that sells an EIA could use what methods to credit the change in
investment value?
CORRECT ANSWER
Annual reset, point-to-point, and high water mark
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, Question 7
A customer who buys a 10 year zero coupon bond with the intention of holding it to
maturity would be MOST concerned with what type of risk?
CORRECT ANSWER
Inflation risk
Question 8
A 75 year-old man (can/cannot) make contributions & (must/is not required) to take
distributions from a Roth IRA
CORRECT ANSWER
Can & is not required
Question 9
Which of the following statements are TRUE regarding customer consent for certain
actions taken by an investment adviser?
I If the investment adviser and its accounts are acquired by another investment advisory
firm, consent of the adviser's existing customers is required
II If the investment adviser and its accounts are acquired by another investment advisory
firm, consent of the adviser's existing customers is not required
III If the investment adviser were to acquire another advisory firm, consent of the adviser's
existing customers is required
IV If the investment adviser were to acquire another advisory firm, consent of the adviser's
existing customers is not required
CORRECT ANSWER
I & IV (the clients accounts that will be impacted)
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Which of the following statements about contributions to 403(b) plans are TRUE?
I Employees may contribute by salary reduction
II An employee may transfer funds from a savings account to make up for prior years
III An employee may contribute up to $19,000 by means of salary reduction for 2019
IV The employer decides the amount of the contribution to be made on behalf of the
employees
CORRECT ANSWER
I & III
Question 2
Couple with 2 adult children have established a revocable trust to remove assets from
their taxable estate. After doing so, they find that they are $100,000 over the estate tax
exclusion that qualifies for the maximum unified tax credit of $4,371,600 in 2019. In order
to reduce the size of their taxable estate by $100,000, they can donate:
CORRECT ANSWER
50K to one charity & 50K to another (any charitable contributions reduce the size of the
taxable estate)
Question 3
When looking at the Price/Book Value of a corporation, the numerator on the equation is
based on (market/accounting) value and the denominator is based on the
(market/accounting)
1
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,CORRECT ANSWER
Market, accounting (market price/common stockholder's equity)
Question 4
A business form that gives a "flow-through" tax benefit and limited liability to owners is
a(n):
CORRECT ANSWER
S Corporation (general partnerships have UNLIMITED liability)
Question 5
For bonds trading at a discount, rank the yield measures from lowest to highest:
- YTM
- YTC
- Current
- Nominal
CORRECT ANSWER
Nominal, Current, YTM, YTC
Question 6
Insurance company that sells an EIA could use what methods to credit the change in
investment value?
CORRECT ANSWER
Annual reset, point-to-point, and high water mark
2
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, Question 7
A customer who buys a 10 year zero coupon bond with the intention of holding it to
maturity would be MOST concerned with what type of risk?
CORRECT ANSWER
Inflation risk
Question 8
A 75 year-old man (can/cannot) make contributions & (must/is not required) to take
distributions from a Roth IRA
CORRECT ANSWER
Can & is not required
Question 9
Which of the following statements are TRUE regarding customer consent for certain
actions taken by an investment adviser?
I If the investment adviser and its accounts are acquired by another investment advisory
firm, consent of the adviser's existing customers is required
II If the investment adviser and its accounts are acquired by another investment advisory
firm, consent of the adviser's existing customers is not required
III If the investment adviser were to acquire another advisory firm, consent of the adviser's
existing customers is required
IV If the investment adviser were to acquire another advisory firm, consent of the adviser's
existing customers is not required
CORRECT ANSWER
I & IV (the clients accounts that will be impacted)
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