AAMS Module All Quizzes (1-10)
Complete Questions And 100%
Verified Answers
\.What are the major steps in the asset management process - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-$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? - ANSWERS✔-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 - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-1. client's goals
2. risk parameters of the client
3. time horizons of the goals
\.Four main attributes of a good business plan - ANSWERS✔-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? -
ANSWERS✔-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? - ANSWERS✔-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? -
ANSWERS✔-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? - ANSWERS✔-
educate the client
Educating your clients is the best way to help set and manage their expectations.
\.Who ultimately makes the investment decision in the asset management process? -
ANSWERS✔-the client
\.Which one of the following is not included in an investment policy statement? - ANSWERS✔-
which securities to include in the portfolio
While an investment policy statement determines which types of securities may be included in
a portfolio, it does NOT make recommendations as to specific securities to purchase.
Complete Questions And 100%
Verified Answers
\.What are the major steps in the asset management process - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-$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? - ANSWERS✔-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 - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-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? - ANSWERS✔-1. client's goals
2. risk parameters of the client
3. time horizons of the goals
\.Four main attributes of a good business plan - ANSWERS✔-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? -
ANSWERS✔-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? - ANSWERS✔-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? -
ANSWERS✔-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? - ANSWERS✔-
educate the client
Educating your clients is the best way to help set and manage their expectations.
\.Who ultimately makes the investment decision in the asset management process? -
ANSWERS✔-the client
\.Which one of the following is not included in an investment policy statement? - ANSWERS✔-
which securities to include in the portfolio
While an investment policy statement determines which types of securities may be included in
a portfolio, it does NOT make recommendations as to specific securities to purchase.
