AWMA Unit 8. Exam Investment
Considerations for Small-Business
Owners Exam QUESTIONS AND
VERIFIED CORRECT ANSWERS
GRADED A+ LATEST 100%
GUARANTEED PASS
Since XYZ, Inc., has taxable income of $200,000, that is the amount subject to tax. Dividends are
not deductible.
Which one of the following is most likely to own preferred stocks?
S corporation
C corporation
partnership - CORRECT ANSWER-C corporation
Preferred stocks are attractive to C corporations because C corporations can exclude 70% of the
dividend income if they own less than 20% of the other corporation.
, John Long is a sole proprietor, and he needs cash to invest in some new equipment. His banker
suggests a home equity loan. His brother-in-law offers a loan at 8% over prime. Which one of
the following would be the most appropriate financing method for John's investment
professional to suggest?
margin the stocks in his self-managed IRA
buy government securities and use them as loan collateral
margin the stocks in his personal account
sell naked call options - CORRECT ANSWER-margin the stocks in his personal account
John can borrow up to 50% of the value of the stocks in his personal margin account.
Bill Dunston is the sole shareholder of Dunston Press, a small publishing company. All of the
employees of Dunston Press are considerably younger than Bill, turnover is relatively high, and
twelve of his twenty employees are part time. He is considering implementing a retirement plan
for the company and wants to avoid fixed contribution obligations. He also wants to receive the
maximum benefit possible. Which one of the following plans would be most appropriate,
considering Bill wants to maximize contributions on his behalf relative to those of the other
employees?
money purchase pension plan
salary reduction SEP plan
cross-tested profit sharing plan
Considerations for Small-Business
Owners Exam QUESTIONS AND
VERIFIED CORRECT ANSWERS
GRADED A+ LATEST 100%
GUARANTEED PASS
Since XYZ, Inc., has taxable income of $200,000, that is the amount subject to tax. Dividends are
not deductible.
Which one of the following is most likely to own preferred stocks?
S corporation
C corporation
partnership - CORRECT ANSWER-C corporation
Preferred stocks are attractive to C corporations because C corporations can exclude 70% of the
dividend income if they own less than 20% of the other corporation.
, John Long is a sole proprietor, and he needs cash to invest in some new equipment. His banker
suggests a home equity loan. His brother-in-law offers a loan at 8% over prime. Which one of
the following would be the most appropriate financing method for John's investment
professional to suggest?
margin the stocks in his self-managed IRA
buy government securities and use them as loan collateral
margin the stocks in his personal account
sell naked call options - CORRECT ANSWER-margin the stocks in his personal account
John can borrow up to 50% of the value of the stocks in his personal margin account.
Bill Dunston is the sole shareholder of Dunston Press, a small publishing company. All of the
employees of Dunston Press are considerably younger than Bill, turnover is relatively high, and
twelve of his twenty employees are part time. He is considering implementing a retirement plan
for the company and wants to avoid fixed contribution obligations. He also wants to receive the
maximum benefit possible. Which one of the following plans would be most appropriate,
considering Bill wants to maximize contributions on his behalf relative to those of the other
employees?
money purchase pension plan
salary reduction SEP plan
cross-tested profit sharing plan
