AAMS MODULE QUIZZES (1-10) | 374 ACTUAL
QUESTIONS AND ANSWERS | WITH COMPLETE
SOLUTION 2026
What are the major steps in the asset management process Answer - 1. gather
data
2. establish goals
3. analyze information
4. make and implement recommendations
5. monitor
Stefan's business plan includes the following goal: "I will contact 50 prospective
clients and document this activity in the CRM for tracking purposes." Which
primary element of a good goal is missing? Answer - This goal is not time-
framed.
The acronym to remember for goal setting is SMART, which stands for Specific,
Measurable, Achievable, Relevant, and Time-Framed. The primary flaw in this
goal is that it is not time-framed. Because it is not time-framed, it is difficult to
tell if this is achievable, but it is certainly measurable and very likely relevant.
Which one of the following is not an invested asset? Answer - 180-day
certificate of deposit
A certificate of deposit is a cash equivalent and therefore should be listed
under Cash and Cash Equivalents.
Victoria Gregory's financial situation is as follows:
,Cash/cash EquivalentsL $15,000
Short Term debts: $23,000
LTDs: $140,000
Taxes: $8000
Invested Assets: $45,000
Use Assets: $192,000
What is her net worth? Answer - $89,000
Assets = Cash/cash equivalents + Invested assets + Use assets ($15,000 +
$45,000 + $192,000 = $252,000). Liabilities = Short-term debts + Long-term
debts ($23,000 + $140,000 = $163,000). Assets - Liabilities = Net Worth, so
$252,000 - $163,000 = $89,000.
Which one of the following statements best describes the income statement
and its major components? Answer - The income statement indicates, for a
certain period of time, an individual's cash inflows and outflows. Its
components include gross income, expenses, and surplus or deficit.
The income statement describes cash flow for a period of time and contains
the components of gross income, from which expenses are subtracted to
determine the surplus or deficit.
All of the following provide a clearer picture of the client's needs Answer - 1.
anticipated retirement lifestyle
2. bad experiences w/ particular investments
3. succession planning in place, if any, for a client involved in ownership of
small business
Which one of the following is considered a "foundation" goal? Answer -
emergency fund
An emergency fund is a "foundation" goal because it is an essential goal for
survival in the event of a dramatic life event.
,Which one of the following is the better written financial goal? Answer - to
accumulate $15,000 for a boat purchase in two years
This goal is well written because it contains a specific dollar amount and a
specific time frame.
When analyzing information gathered from a client, which of the following are
important factors to look for? Answer - 1. mismatches between the current
investment position or resources and stated goals.
This is an important factor in the analysis step. Any mismatches between the
client's goals and the investment vehicles used to attain those goals should be
highlighted.
2. the validity of the client's stated goals.
This is an important factor in the analysis step. If the client's goals are
unrealistic, this problem needs to be addressed immediately.
3. tax problems that might be ameliorated through investment planning.
This is an important factor in the analysis step. Potential tax problems should
be addressed as part of the investment strategy.
Marcia Simpson has analyzed her client's situation and has concluded that her
client will come short of attaining the amount of capital he would like to have
by the time he plans to retire. The client is a low risk taker and will have limited
funds for future periodic investments. Before making a recommendation,
Marcia should do which one of the following? Answer - Discuss the problem
and ask the client to clarify how he wishes to adjust his accumulation goal, risk
level, or periodic investments.
After being informed of the various constraints, implications of their decisions,
and other options they have, the client can choose to make adjustments with
which he is comfortable.
, Which of the following is a matter that needs to be clarified before making
investment recommendations? Answer - 1. client's goals
2. risk parameters of the client
3. time horizons of the goals
Four main attributes of a good business plan Answer - 1. written and shared
with someone who has an interest in your success
2. include realistic action steps and personal goals
3. professional development goals
Which of the following is the more important factor in establishing trust with a
client? Answer - demonstrating professionalism and honesty
Demonstrating professionalism and honesty is the most important factor in
establishing trust with a client.
What are the three characteristics of a well-defined goal? Answer - 1. purpose
2. specific dollar amount
3. defined time frame
Which one of the following is a mismatch between a client's time horizon and
stated goal? Answer - A 55-year-old client with no current retirement savings
says that saving for retirement is her top priority; she plans to retire at age 62.
Seven years is not enough time for this client to amass the principal needed to
support a retirement period of 15 to 20 years (or longer).
Managing client expectations is best achieved through which of the following?
Answer - educate the client
Educating your clients is the best way to help set and manage their
expectations.
QUESTIONS AND ANSWERS | WITH COMPLETE
SOLUTION 2026
What are the major steps in the asset management process Answer - 1. gather
data
2. establish goals
3. analyze information
4. make and implement recommendations
5. monitor
Stefan's business plan includes the following goal: "I will contact 50 prospective
clients and document this activity in the CRM for tracking purposes." Which
primary element of a good goal is missing? Answer - This goal is not time-
framed.
The acronym to remember for goal setting is SMART, which stands for Specific,
Measurable, Achievable, Relevant, and Time-Framed. The primary flaw in this
goal is that it is not time-framed. Because it is not time-framed, it is difficult to
tell if this is achievable, but it is certainly measurable and very likely relevant.
Which one of the following is not an invested asset? Answer - 180-day
certificate of deposit
A certificate of deposit is a cash equivalent and therefore should be listed
under Cash and Cash Equivalents.
Victoria Gregory's financial situation is as follows:
,Cash/cash EquivalentsL $15,000
Short Term debts: $23,000
LTDs: $140,000
Taxes: $8000
Invested Assets: $45,000
Use Assets: $192,000
What is her net worth? Answer - $89,000
Assets = Cash/cash equivalents + Invested assets + Use assets ($15,000 +
$45,000 + $192,000 = $252,000). Liabilities = Short-term debts + Long-term
debts ($23,000 + $140,000 = $163,000). Assets - Liabilities = Net Worth, so
$252,000 - $163,000 = $89,000.
Which one of the following statements best describes the income statement
and its major components? Answer - The income statement indicates, for a
certain period of time, an individual's cash inflows and outflows. Its
components include gross income, expenses, and surplus or deficit.
The income statement describes cash flow for a period of time and contains
the components of gross income, from which expenses are subtracted to
determine the surplus or deficit.
All of the following provide a clearer picture of the client's needs Answer - 1.
anticipated retirement lifestyle
2. bad experiences w/ particular investments
3. succession planning in place, if any, for a client involved in ownership of
small business
Which one of the following is considered a "foundation" goal? Answer -
emergency fund
An emergency fund is a "foundation" goal because it is an essential goal for
survival in the event of a dramatic life event.
,Which one of the following is the better written financial goal? Answer - to
accumulate $15,000 for a boat purchase in two years
This goal is well written because it contains a specific dollar amount and a
specific time frame.
When analyzing information gathered from a client, which of the following are
important factors to look for? Answer - 1. mismatches between the current
investment position or resources and stated goals.
This is an important factor in the analysis step. Any mismatches between the
client's goals and the investment vehicles used to attain those goals should be
highlighted.
2. the validity of the client's stated goals.
This is an important factor in the analysis step. If the client's goals are
unrealistic, this problem needs to be addressed immediately.
3. tax problems that might be ameliorated through investment planning.
This is an important factor in the analysis step. Potential tax problems should
be addressed as part of the investment strategy.
Marcia Simpson has analyzed her client's situation and has concluded that her
client will come short of attaining the amount of capital he would like to have
by the time he plans to retire. The client is a low risk taker and will have limited
funds for future periodic investments. Before making a recommendation,
Marcia should do which one of the following? Answer - Discuss the problem
and ask the client to clarify how he wishes to adjust his accumulation goal, risk
level, or periodic investments.
After being informed of the various constraints, implications of their decisions,
and other options they have, the client can choose to make adjustments with
which he is comfortable.
, Which of the following is a matter that needs to be clarified before making
investment recommendations? Answer - 1. client's goals
2. risk parameters of the client
3. time horizons of the goals
Four main attributes of a good business plan Answer - 1. written and shared
with someone who has an interest in your success
2. include realistic action steps and personal goals
3. professional development goals
Which of the following is the more important factor in establishing trust with a
client? Answer - demonstrating professionalism and honesty
Demonstrating professionalism and honesty is the most important factor in
establishing trust with a client.
What are the three characteristics of a well-defined goal? Answer - 1. purpose
2. specific dollar amount
3. defined time frame
Which one of the following is a mismatch between a client's time horizon and
stated goal? Answer - A 55-year-old client with no current retirement savings
says that saving for retirement is her top priority; she plans to retire at age 62.
Seven years is not enough time for this client to amass the principal needed to
support a retirement period of 15 to 20 years (or longer).
Managing client expectations is best achieved through which of the following?
Answer - educate the client
Educating your clients is the best way to help set and manage their
expectations.
