CRPC YOU GOT THIS STUDY CARDS -
MEMORIZE AND BE FAMILIAR WITH
THESE AND YOU GOT THIS. FRIGGEN
110% PASSING SCORE. QUESTIONS
AND ANSWERS
PaymentsjcreceivedjcinjcthejcyearsjcBEFOREjcyoujcobtainjcFRAjcwilljcbejcreducedjc$_____
_forjceveryjc$________jcearnedjcabovejcthejcearningsjccap.jc-jcanswer--
Old-
agejcbenefitsjcofjcSocialjcSecurityjcrecipientsjcmayjcbejcreducedjcifjcthejcclientjcearnsjcincom
ejcfromjcwagesjcandjcsalaryjcduringjcretirementjcpriorjctojcSocialjcSecurity'sjcfulljcretirementjc
age.jcByjchowjcmuchjcarejcthejcbenefitsjcreduced?jc-jcanswer--
Benefitsjcpaidjctojcpersonsjcinjcthejcyearsjcpriorjctojcattainingjcfulljcretirementjcagejcarejcreduc
edjcbyjc$1jcforjceveryjc$2jcearnedjcoverjcthejclimit.
HowjcmuchjctaxjcexemptjcinterestjcisjcincludedjcinjcSS?jc-jcanswer--ALLjcTax-
exemptjcinterestjcisjcincludedjcinjcthejccomputationjcofjcthejctaxationjcofjcSSjcbenefits.
Whenjcseekingjcinvestmentsjcthatjchavejcthejcleastjcamountjcofjcrisk,jcwhatjcbetajcdojcyoujcc
hoose?jc-jcanswer--Thejcabsolutejclowestjcone!jc0.5
WhatjcdoesjcthejcCoefficientjcofjcVariationjcmeasure?jcHowjcdojcyoujccalculatejcit?jc-
jcanswer--
Itjcmeasuresjcajcsecuritiesjcriskjcadjustedjcreturn.jcItjcallowsjcyoujctojccomparejc2jcsecuritiesjc
together,jcsojcyoujcDIVIDE.jc
DEVIATIONjcDIVIDEDjcBYjcTHEjcEXPECTEDjcRETURN.
WhatjckindjcofjcmoneyjccomesjcoutjcofjcajcRothjcIRAjcdistributionjcfirst?jc-jcanswer--
ContributionjcamountsjcalwaysjccomejcoutjcofjcajcRothjcIRAjcaccountjcfirst,jcandjcthenjcconv
ersionjcamounts,jcifjcany.
WhenjccanjcajcdistributionjcbejcmadejcfromjcajcTSA?jc4jccategories!jc-jcanswer--
Employeejcseparatesjcfromjcservice,jcattainsjcagejc59jc1⁄2,jcbecomesjcdisabledjcorjcdies,jcor
jcqualifiesjcunderjchardshipjcrules.
NonjcspringjcPOAjcremainsjceffectivejcwhen?jc-jcanswer--
Remainsjceffectivejcafterjcthejcprincipaljcbecomesjcincapacitated.jcNONjcSpring.jcNOTjcspr
ingingjcintojcactionjcuntiljcAFTER.
,SpringingjcPOAjcremainsjceffectivejcwhen?jc-jcanswer--
Becomesjceffectivejcwhenjcthejcprincipaljcbecomesjcincompetentjcorjcincapacitated.jcSPRI
NGING.jcSpringingjcintojcactionjcWHENjcitjchappens.
WhatjcdoesjcMedicarejcPartjcAjccoverjcandjchowjcdojcyoujcpayjcforjcit?jc-jcanswer--
Coversjchospitaljcchargesjcbutjcpatientjcmustjcpayjcforjcalljccostsjcinjcajchospitaljcbeyondjc15
0jcdays.
Providedjcatjcnojccharge.jcNojcpremium.
WhatjcdoesjcMedicarejcPartjcBjccoverjcandjchowjcdojcyoujcpayjcforjcit?jc-jcanswer--
Coversjcphysicianjcservices
Premiumjccharge!
jcIfjcyou'rejceligiblejcforjcPartjcA,jcyou'vejcgotjcPartjcB,jcBUTjcFORjcAjcCHARGE!
WhatjcmakesjcyoujceligiblejcforjcMedicarejccoverage?jc-jcanswer--
Overjc65jcandjcinjcajccoveredjcoccupationjcmeaningjcyou'rejcgettingjcsocialjcsecurity.
Whatjcsituationsjcarejcexemptjcfromjcthejc10%jcpenaltyjconjcqualifiedjcplanjcdistributionsjcm
adejcbeforejcagejc59jc½?jc-jcanswer--
Distributionsjcbecausejcofjcdeathjcandjcannuitizedjcpaymentsjcbasedjconjcanjcindividual'sjcr
emainingjclifejcexpectancy.
Whatjcdoesjc"Currently"jcinsuredjcmeanjcandjcwhatjcwouldjcyoujcqualifyjcfor?jc-jcanswer--
6jcquartersjcofjccoveragejc(sojcaboutjc2jcyearsjcpayingjcintojcsocialjcsecurity)jcWhatjcwouldjcy
oujcqualifyjcfor?jcONLYjc2jcTHINGS!jcSurvivor'sjcbenefitjcforjcdependentjcchildjcandjcLump-
sumjcdeathjcbenefitjcspousejcorjcchild.jcYourjcspousejcdoesn'tjcgetjcanything!
Whatjcdoesjc"Fully"jcinsuredjcmeanjcandjcwhatjcwouldjcyoujcqualifyjcfor?jc-jcanswer--
40jcquartersjcofjccoveragejc(10jcYEARSjcpayingjcintojcsocialjcsecurity!)jcWhatjcwouldjcyoujcq
ualifyjcfor?
jcEverything.jcSurvivor'sjcbenefitjcforjcyourjcdependentjcparentjcwhojcisjcagejc62jcorjcolder.jcS
urvivor'sjcbenefitjcforjcMaxine'sjcspousejcorjcformerjcspousejcwhojcisjcagejc60jcorjcolder.jcDe
pendentjcchildjcbenefits.
HowjcarejcnetjcLONGjctermjccapitaljcgainsjctaxed?jc-jcanswer--
Subjectjctojcajc0%jctaxjcratejcifjcthejctaxpayerjcisjcinjcajc10%jcorjc15%jcmarginaljcincomejctaxjcb
racket.
HowjcarejcnetjcSHORTjctermjccapitaljcgainsjctaxed?jc-jcanswer--
Subjectjctojcajctaxpayer'sjcordinaryjcincomejctaxjcrate.
What'sjcthejclongjctermjcgainjcratejcappliedjctojclongjctermjccollectibles?jc-jcanswer--
Ajcmaximumjcratejcofjc28%jcappliesjctojclong-termjcgainjconjccollectibles.
Nonperiodicjcdistributionsjcfromjcanjcannuityjccontractjcpriorjctojcthejcannuityjcstartjcdate?jc-
jcanswer--LIFO.jcItjcisjcfirstjcconsideredjcajctaxablejcinterestjcpaymentjcandjcthenjcajctax-
freejcreturnjcofjcprincipal.jcLastjcin,jcfirstjcout.
,Calculatingjcthejcexclusionjcratiojcforjcajcfixedjcannuity?jc-jcanswer--
Thejcinvestmentjcinjcthejcannuityjccontractjcisjcdividedjcbyjcthejctotaljcexpectedjcreturn.
Whatjcisjcthejctaxjctreatmentjcforjcajcshareholderjcparticipatingjcinjcajccommonjcstock'sjcdivid
endjcreinvestmentjcprogram?jc-jcanswer--
Thejcshareholderjcisjctreatedjcasjcifjchejcorjcshejcreceivedjcajccashjcdividendjcequaljctojcthejcfa
irjcmarketjcvaluejcofjcthejcsharesjcpurchasedjcunderjcthejcplan.jcYoujcliterallyjcboughtjcmorejc
stockjcwithjcthejcdividends.jcThejcdividendjcyoujcgotjcisjctreatedjclikejccash.jcThejcdividendjcisj
ccashjcandjcyoujcusedjcthatjccashjctojcbuyjcmorejcstock.jcThejcfairjcmarketjcvaluejcofjcthejcshar
esjcpurchasedjcisjcgenerallyjctaxedjcatjcajc15%jcorjc20%jcrate.
Whatjcisjcthejcvaluationjcdatejcforjcgifts?jc-jcanswer--
Thejcvaluationjcdatejcforjcgiftsjcisjcwhenjcthejctransferjcisjccompleted!
Jointjctenancyjcwithjcrightjcofjcsurvivorshipjc(JTWROS),jctenancyjcbyjcthejcentiretyjc(TBE),jc
andjccommunityjcpropertyjc(CP)jcarejcalljcformsjcofjcco-
ownershipjcthatjccanjcbejcusedjcbyjcwhojconly?jc-jcanswer--Ajchusbandjcandjcajcwife.
Jointjctenantsjcorjctenantsjcinjccommonjcarejcformsjcofjcownershipjcthatjccanjcbejcusedjcbyjcw
hojconly?jc-jcanswer--Nonjcspouses.jcHusbandjcandjcwifejccan'tjcusejcthese.
Dojcrightsjcofjcsurvivorshipjcpropertyjcbypassesjcprobate?jc-jcanswer--Yes.
Propertyjcheldjcasjcajctenantjcinjccommonjcorjcinjcwhichjcthejcdecedentjcsolelyjcownedjchisjcin
terestjcdoesjcnotjcwhat?jc-jcanswer--Bypassjcprobate.
Thejcbasisjcthatjcisjcusedjcinjcdeterminingjcgainsjcfromjcmutualjcfundsjcsalesjcmayjcbejccalcul
atedjcbyjcusingjcwhatjcthreejcmethods?jc-jcanswer--
LIFO,jcAveragejcCost,jcSpecificjcIdentificationjcmethod
Injcajccommunityjcpropertyjcstate,jcajcperson'sjcearningsjcfromjctheirjcjobjcsubsequentjc(afte
r)jctojcthejcdatejcofjctheirjcmarriagejcwilljcbejcconsideredjccommunityjcproperty.jcWejcgetjcmar
ried,jcmyjcearningsjcthenjcbecomejcyoursjcasjcwell.jcWejc"sharejcit".jcCommunityjcproperty.jc
IfjcIjcownjcpropertyjcbeforejcIjcmetjcyou,jcthat'sjcstilljcjustjcmine.jc-jcanswer--Gotjcit?
Whenjcgatheringjcdatajcduringjcthejcretirementjcplanningjcprocess,jcfinancialjcgoalsjcshould
jcbejcquantifiedjcinjcwhatjctwojcways?jc-jcanswer--
Dollarjcamountsjcandjcestablishedjctimejcframes.
ThejcSecuritiesjcActjcofjc1933jc-jcanswer--
Requiredjcthatjcnewjccompaniesjcprovidejcfulljcdisclosurejcthroughjcthejcissuancejcofjcajcpro
spectus.
SecuritiesjcExchangejcActjcofjc1934jc-jcanswer--CreatedjcthejcSEC.
InvestmentjcCompanyjcActjcofjc1940jc-jcanswer--Thejcregulationjcofjcmutualjcfunds.
InvestmentjcAdvisersjcActjcofjc1940jc-jcanswer--
RequiresjcadvisorsjctojcregisterjcwithjcthejcSEC.
, StatementjcofjcFinancialjcPositionjcisjcusedjctojccalculatejcwhat?
jcAndjcwhatjcdoesjcitjchavejconjcit?jc-jcanswer--
AssetsjcandjcLiabilitiesjcwhichjchelpsjcyoujccalculatejcNetjcWorth.
AjcCashjcFlowjcstatementjcisjcusedjctojccalculatejcwhat?jcAndjcwhatjcdoesjcitjchavejconjcit?jc-
jcanswer--Inflowsjcandjcoutjcflows.jcNotjcassetsjcandjcliabilities.
Whenjccalculatingjcnetjcworth,jcwhatjcDON'Tjcyoujcinclude?jc-jcanswer--TaxesjcorjcAuto
Whenjccalculatingjccashjcflow,jcwhatjcDON'Tjcyoujcinclude?jc-jcanswer--
CheckingjcorjcCreditjcCards
Howjcdojcyoujccalculatejcstandardjcdeviation?jc(RememberjcitjcmakesjcyoujcMADjc>:|jc)jc-
jcanswer--MEANjcreturnjcplusjcdeviation
MEANjcreturnjcminusjcdeviation
Whatjcarejcthejc3jclevelsjcofjcStandardjcDeviation?jc-jcanswer--ojc68jc=jc1
ojc95jc=jc2
ojc99jc=jc3
HowjcdojcyoujccalculatejcthejcCoefficientjcofjcVariation?jc-jcanswer--
Deviationjcdividedjcbyjcthejcexpectedjcreturn.
Howjcdojcyoujccalculatejcbeta?jc-jcanswer--Multiply.
WhatjcisjcDollarjcCostjcAveraging?jc-jcanswer--
Purchasingjcsharesjcwithjcequal,jcperiodicjccontributions.
Grahamjcrecommendedjcthatjcnonprofessionaljcinvestorsjcapplyjcwhichjconejcofjcthejcfollo
wingjcrulesjcofjcthumb?jc-jcanswer--Buyjcstocksjcforjctwo-
thirdsjcorjclessjcofjctheirjcnetjccurrentjcassets.
Whatjcdojccashjcequivalentsjcinclude?jcWhatjcDON'Tjctheyjcinclude?jc-jcanswer--
Theyjcinclude:jcTreasuryjcbills,jcnegotiablejccertificatesjcofjcdeposit,jccommercialjcpaper,jca
ndjcbankers'jcacceptances.
Theyjcdojcnotjcinclude:jcTreasuryjcNOTES.
Portfoliojcrebalancingjcinvolvesjcsellingjcthosejcassetsjcthatjchavejcappreciatedjcsignificant
lyjcandjcthenjcwhat?jc-jcanswer--
Andjcthenjcreinvestingjcinjcassetsjcthatjchavejcnotjcperformedjcwelljcinjcorderjctojcgetjcbackjctoj
cyourjcoriginaljcassetjcallocation.
Strategicjcassetjcallocationjcestablishesjcajctargetjcallocationjcforjcajcgivenjcassetjcclassjc(su
chjcasjc60%jctojccommonjcstocks)jcandjcthenjcwhat?jc-jcanswer--
Andjcthenjcrebalancesjcthejcportfoliojcwhenjcnecessaryjctojcmaintainjcthatjctargetjcallocation
.
Thejclowerjcthejccouponjcrate...jc-
jcanswer--...the jcgreaterjcthejcpricejcsensitivityjcofjcthejcbond.
MEMORIZE AND BE FAMILIAR WITH
THESE AND YOU GOT THIS. FRIGGEN
110% PASSING SCORE. QUESTIONS
AND ANSWERS
PaymentsjcreceivedjcinjcthejcyearsjcBEFOREjcyoujcobtainjcFRAjcwilljcbejcreducedjc$_____
_forjceveryjc$________jcearnedjcabovejcthejcearningsjccap.jc-jcanswer--
Old-
agejcbenefitsjcofjcSocialjcSecurityjcrecipientsjcmayjcbejcreducedjcifjcthejcclientjcearnsjcincom
ejcfromjcwagesjcandjcsalaryjcduringjcretirementjcpriorjctojcSocialjcSecurity'sjcfulljcretirementjc
age.jcByjchowjcmuchjcarejcthejcbenefitsjcreduced?jc-jcanswer--
Benefitsjcpaidjctojcpersonsjcinjcthejcyearsjcpriorjctojcattainingjcfulljcretirementjcagejcarejcreduc
edjcbyjc$1jcforjceveryjc$2jcearnedjcoverjcthejclimit.
HowjcmuchjctaxjcexemptjcinterestjcisjcincludedjcinjcSS?jc-jcanswer--ALLjcTax-
exemptjcinterestjcisjcincludedjcinjcthejccomputationjcofjcthejctaxationjcofjcSSjcbenefits.
Whenjcseekingjcinvestmentsjcthatjchavejcthejcleastjcamountjcofjcrisk,jcwhatjcbetajcdojcyoujcc
hoose?jc-jcanswer--Thejcabsolutejclowestjcone!jc0.5
WhatjcdoesjcthejcCoefficientjcofjcVariationjcmeasure?jcHowjcdojcyoujccalculatejcit?jc-
jcanswer--
Itjcmeasuresjcajcsecuritiesjcriskjcadjustedjcreturn.jcItjcallowsjcyoujctojccomparejc2jcsecuritiesjc
together,jcsojcyoujcDIVIDE.jc
DEVIATIONjcDIVIDEDjcBYjcTHEjcEXPECTEDjcRETURN.
WhatjckindjcofjcmoneyjccomesjcoutjcofjcajcRothjcIRAjcdistributionjcfirst?jc-jcanswer--
ContributionjcamountsjcalwaysjccomejcoutjcofjcajcRothjcIRAjcaccountjcfirst,jcandjcthenjcconv
ersionjcamounts,jcifjcany.
WhenjccanjcajcdistributionjcbejcmadejcfromjcajcTSA?jc4jccategories!jc-jcanswer--
Employeejcseparatesjcfromjcservice,jcattainsjcagejc59jc1⁄2,jcbecomesjcdisabledjcorjcdies,jcor
jcqualifiesjcunderjchardshipjcrules.
NonjcspringjcPOAjcremainsjceffectivejcwhen?jc-jcanswer--
Remainsjceffectivejcafterjcthejcprincipaljcbecomesjcincapacitated.jcNONjcSpring.jcNOTjcspr
ingingjcintojcactionjcuntiljcAFTER.
,SpringingjcPOAjcremainsjceffectivejcwhen?jc-jcanswer--
Becomesjceffectivejcwhenjcthejcprincipaljcbecomesjcincompetentjcorjcincapacitated.jcSPRI
NGING.jcSpringingjcintojcactionjcWHENjcitjchappens.
WhatjcdoesjcMedicarejcPartjcAjccoverjcandjchowjcdojcyoujcpayjcforjcit?jc-jcanswer--
Coversjchospitaljcchargesjcbutjcpatientjcmustjcpayjcforjcalljccostsjcinjcajchospitaljcbeyondjc15
0jcdays.
Providedjcatjcnojccharge.jcNojcpremium.
WhatjcdoesjcMedicarejcPartjcBjccoverjcandjchowjcdojcyoujcpayjcforjcit?jc-jcanswer--
Coversjcphysicianjcservices
Premiumjccharge!
jcIfjcyou'rejceligiblejcforjcPartjcA,jcyou'vejcgotjcPartjcB,jcBUTjcFORjcAjcCHARGE!
WhatjcmakesjcyoujceligiblejcforjcMedicarejccoverage?jc-jcanswer--
Overjc65jcandjcinjcajccoveredjcoccupationjcmeaningjcyou'rejcgettingjcsocialjcsecurity.
Whatjcsituationsjcarejcexemptjcfromjcthejc10%jcpenaltyjconjcqualifiedjcplanjcdistributionsjcm
adejcbeforejcagejc59jc½?jc-jcanswer--
Distributionsjcbecausejcofjcdeathjcandjcannuitizedjcpaymentsjcbasedjconjcanjcindividual'sjcr
emainingjclifejcexpectancy.
Whatjcdoesjc"Currently"jcinsuredjcmeanjcandjcwhatjcwouldjcyoujcqualifyjcfor?jc-jcanswer--
6jcquartersjcofjccoveragejc(sojcaboutjc2jcyearsjcpayingjcintojcsocialjcsecurity)jcWhatjcwouldjcy
oujcqualifyjcfor?jcONLYjc2jcTHINGS!jcSurvivor'sjcbenefitjcforjcdependentjcchildjcandjcLump-
sumjcdeathjcbenefitjcspousejcorjcchild.jcYourjcspousejcdoesn'tjcgetjcanything!
Whatjcdoesjc"Fully"jcinsuredjcmeanjcandjcwhatjcwouldjcyoujcqualifyjcfor?jc-jcanswer--
40jcquartersjcofjccoveragejc(10jcYEARSjcpayingjcintojcsocialjcsecurity!)jcWhatjcwouldjcyoujcq
ualifyjcfor?
jcEverything.jcSurvivor'sjcbenefitjcforjcyourjcdependentjcparentjcwhojcisjcagejc62jcorjcolder.jcS
urvivor'sjcbenefitjcforjcMaxine'sjcspousejcorjcformerjcspousejcwhojcisjcagejc60jcorjcolder.jcDe
pendentjcchildjcbenefits.
HowjcarejcnetjcLONGjctermjccapitaljcgainsjctaxed?jc-jcanswer--
Subjectjctojcajc0%jctaxjcratejcifjcthejctaxpayerjcisjcinjcajc10%jcorjc15%jcmarginaljcincomejctaxjcb
racket.
HowjcarejcnetjcSHORTjctermjccapitaljcgainsjctaxed?jc-jcanswer--
Subjectjctojcajctaxpayer'sjcordinaryjcincomejctaxjcrate.
What'sjcthejclongjctermjcgainjcratejcappliedjctojclongjctermjccollectibles?jc-jcanswer--
Ajcmaximumjcratejcofjc28%jcappliesjctojclong-termjcgainjconjccollectibles.
Nonperiodicjcdistributionsjcfromjcanjcannuityjccontractjcpriorjctojcthejcannuityjcstartjcdate?jc-
jcanswer--LIFO.jcItjcisjcfirstjcconsideredjcajctaxablejcinterestjcpaymentjcandjcthenjcajctax-
freejcreturnjcofjcprincipal.jcLastjcin,jcfirstjcout.
,Calculatingjcthejcexclusionjcratiojcforjcajcfixedjcannuity?jc-jcanswer--
Thejcinvestmentjcinjcthejcannuityjccontractjcisjcdividedjcbyjcthejctotaljcexpectedjcreturn.
Whatjcisjcthejctaxjctreatmentjcforjcajcshareholderjcparticipatingjcinjcajccommonjcstock'sjcdivid
endjcreinvestmentjcprogram?jc-jcanswer--
Thejcshareholderjcisjctreatedjcasjcifjchejcorjcshejcreceivedjcajccashjcdividendjcequaljctojcthejcfa
irjcmarketjcvaluejcofjcthejcsharesjcpurchasedjcunderjcthejcplan.jcYoujcliterallyjcboughtjcmorejc
stockjcwithjcthejcdividends.jcThejcdividendjcyoujcgotjcisjctreatedjclikejccash.jcThejcdividendjcisj
ccashjcandjcyoujcusedjcthatjccashjctojcbuyjcmorejcstock.jcThejcfairjcmarketjcvaluejcofjcthejcshar
esjcpurchasedjcisjcgenerallyjctaxedjcatjcajc15%jcorjc20%jcrate.
Whatjcisjcthejcvaluationjcdatejcforjcgifts?jc-jcanswer--
Thejcvaluationjcdatejcforjcgiftsjcisjcwhenjcthejctransferjcisjccompleted!
Jointjctenancyjcwithjcrightjcofjcsurvivorshipjc(JTWROS),jctenancyjcbyjcthejcentiretyjc(TBE),jc
andjccommunityjcpropertyjc(CP)jcarejcalljcformsjcofjcco-
ownershipjcthatjccanjcbejcusedjcbyjcwhojconly?jc-jcanswer--Ajchusbandjcandjcajcwife.
Jointjctenantsjcorjctenantsjcinjccommonjcarejcformsjcofjcownershipjcthatjccanjcbejcusedjcbyjcw
hojconly?jc-jcanswer--Nonjcspouses.jcHusbandjcandjcwifejccan'tjcusejcthese.
Dojcrightsjcofjcsurvivorshipjcpropertyjcbypassesjcprobate?jc-jcanswer--Yes.
Propertyjcheldjcasjcajctenantjcinjccommonjcorjcinjcwhichjcthejcdecedentjcsolelyjcownedjchisjcin
terestjcdoesjcnotjcwhat?jc-jcanswer--Bypassjcprobate.
Thejcbasisjcthatjcisjcusedjcinjcdeterminingjcgainsjcfromjcmutualjcfundsjcsalesjcmayjcbejccalcul
atedjcbyjcusingjcwhatjcthreejcmethods?jc-jcanswer--
LIFO,jcAveragejcCost,jcSpecificjcIdentificationjcmethod
Injcajccommunityjcpropertyjcstate,jcajcperson'sjcearningsjcfromjctheirjcjobjcsubsequentjc(afte
r)jctojcthejcdatejcofjctheirjcmarriagejcwilljcbejcconsideredjccommunityjcproperty.jcWejcgetjcmar
ried,jcmyjcearningsjcthenjcbecomejcyoursjcasjcwell.jcWejc"sharejcit".jcCommunityjcproperty.jc
IfjcIjcownjcpropertyjcbeforejcIjcmetjcyou,jcthat'sjcstilljcjustjcmine.jc-jcanswer--Gotjcit?
Whenjcgatheringjcdatajcduringjcthejcretirementjcplanningjcprocess,jcfinancialjcgoalsjcshould
jcbejcquantifiedjcinjcwhatjctwojcways?jc-jcanswer--
Dollarjcamountsjcandjcestablishedjctimejcframes.
ThejcSecuritiesjcActjcofjc1933jc-jcanswer--
Requiredjcthatjcnewjccompaniesjcprovidejcfulljcdisclosurejcthroughjcthejcissuancejcofjcajcpro
spectus.
SecuritiesjcExchangejcActjcofjc1934jc-jcanswer--CreatedjcthejcSEC.
InvestmentjcCompanyjcActjcofjc1940jc-jcanswer--Thejcregulationjcofjcmutualjcfunds.
InvestmentjcAdvisersjcActjcofjc1940jc-jcanswer--
RequiresjcadvisorsjctojcregisterjcwithjcthejcSEC.
, StatementjcofjcFinancialjcPositionjcisjcusedjctojccalculatejcwhat?
jcAndjcwhatjcdoesjcitjchavejconjcit?jc-jcanswer--
AssetsjcandjcLiabilitiesjcwhichjchelpsjcyoujccalculatejcNetjcWorth.
AjcCashjcFlowjcstatementjcisjcusedjctojccalculatejcwhat?jcAndjcwhatjcdoesjcitjchavejconjcit?jc-
jcanswer--Inflowsjcandjcoutjcflows.jcNotjcassetsjcandjcliabilities.
Whenjccalculatingjcnetjcworth,jcwhatjcDON'Tjcyoujcinclude?jc-jcanswer--TaxesjcorjcAuto
Whenjccalculatingjccashjcflow,jcwhatjcDON'Tjcyoujcinclude?jc-jcanswer--
CheckingjcorjcCreditjcCards
Howjcdojcyoujccalculatejcstandardjcdeviation?jc(RememberjcitjcmakesjcyoujcMADjc>:|jc)jc-
jcanswer--MEANjcreturnjcplusjcdeviation
MEANjcreturnjcminusjcdeviation
Whatjcarejcthejc3jclevelsjcofjcStandardjcDeviation?jc-jcanswer--ojc68jc=jc1
ojc95jc=jc2
ojc99jc=jc3
HowjcdojcyoujccalculatejcthejcCoefficientjcofjcVariation?jc-jcanswer--
Deviationjcdividedjcbyjcthejcexpectedjcreturn.
Howjcdojcyoujccalculatejcbeta?jc-jcanswer--Multiply.
WhatjcisjcDollarjcCostjcAveraging?jc-jcanswer--
Purchasingjcsharesjcwithjcequal,jcperiodicjccontributions.
Grahamjcrecommendedjcthatjcnonprofessionaljcinvestorsjcapplyjcwhichjconejcofjcthejcfollo
wingjcrulesjcofjcthumb?jc-jcanswer--Buyjcstocksjcforjctwo-
thirdsjcorjclessjcofjctheirjcnetjccurrentjcassets.
Whatjcdojccashjcequivalentsjcinclude?jcWhatjcDON'Tjctheyjcinclude?jc-jcanswer--
Theyjcinclude:jcTreasuryjcbills,jcnegotiablejccertificatesjcofjcdeposit,jccommercialjcpaper,jca
ndjcbankers'jcacceptances.
Theyjcdojcnotjcinclude:jcTreasuryjcNOTES.
Portfoliojcrebalancingjcinvolvesjcsellingjcthosejcassetsjcthatjchavejcappreciatedjcsignificant
lyjcandjcthenjcwhat?jc-jcanswer--
Andjcthenjcreinvestingjcinjcassetsjcthatjchavejcnotjcperformedjcwelljcinjcorderjctojcgetjcbackjctoj
cyourjcoriginaljcassetjcallocation.
Strategicjcassetjcallocationjcestablishesjcajctargetjcallocationjcforjcajcgivenjcassetjcclassjc(su
chjcasjc60%jctojccommonjcstocks)jcandjcthenjcwhat?jc-jcanswer--
Andjcthenjcrebalancesjcthejcportfoliojcwhenjcnecessaryjctojcmaintainjcthatjctargetjcallocation
.
Thejclowerjcthejccouponjcrate...jc-
jcanswer--...the jcgreaterjcthejcpricejcsensitivityjcofjcthejcbond.
