WMCP Exam Questions with Correct Answers Latest Update 2025
Asset only approaches - Answers portfolio strategies that do not consider the liability are often referred
to as _______
R-Squared statistic - Answers The amount of variation in the return on the asset that can't be explained
by the market is captured by the _______
Lifetime gift tax
Estate tax - Answers The wealth transfer tax system includes the _____ and the _______.
Marginal Tax Rate - Answers MTR
Sharpe Ratio - Answers Expected return
-
Risk Free Rate
/
Standard Deviation
Gordon Growth Model - Answers V= D1/(r-g)
V= value
D1= dividend
r= required rate
g= growth
this is known as the _______
Effective Tax Rate - Answers ETR
Personal Property and Manufacturing equipment - Answers Section 1245 property is .......
Hot assets - Answers Substantially appreciated inventory or uncollected receivables is known as .......
Adjusted Basis - Answers Property + Improvements - Depreciation = ?
Stochastic - Answers A _______ return means that the returns are random
Income in respect of a Decedent - Answers IRD
Net return= Mort. rate / (1- marginal tax rate)
,ex: MR= 4%
TR=33%
.04/(1-33)= 6% NR - Answers Calculation for net return on a house is ....
Tax gains harvesting - Answers TGH
Loss Aversion - Answers Having a much greater desire to avoid a loss than to acquire a similar gain is
known as _________
Qualified Business Income Deduction - Answers QBI Deduction
26/32.5
28/35 - Answers The AMT nominal marginal tax rates are ______% + ______% because of phase out
there are 2 more ______% + _______%
Alternative Minimum Taxable Income - Answers AMTI
Principal and Income - Answers ______ and ______ have very specific meanings with respect to trust
assets and distributions.
Contribution Base - Answers AGI minus Net operating losses =
Primary Insurance Amount - Answers Social security's PIA
Insurance Load - Answers The difference between the premium and the average expected claim is
the.....
Capital Asset pricing Model - Answers CAPM
Endowment effect - Answers When people value an item more highly once they own it is called
an_________
1-10 yrs. - Answers Treasury Notes have maturities of ________
Immunization - Answers Future payouts with specific, nominal values that are not flexible can be funded
through safe investments using a technique known as ________.
Regression analysis - Answers A statistical technique used to assess whether some phenomenon
depends on certain Characteristics (age of the fund, turnover, expenses, or etc.)
Value & momentum - Answers What are the 2 Bedrock factors?
Grantor trust - Answers When certain rights that allow the grantor to retain a significant amount of
control over the trust property are written into the trust document.....
Sector - Answers An area of the economy that shares a related product or service is a _______
, Certainty Equivalence - Answers For an investor to accept a possibility of investment risk, they must be
compensated with a higher expected wealth from taking that risk is known as......
Term structure of interest rates - Answers The differentiation in yield by different maturities is known as
the _____
Market Efficiency - Answers How a stock's price responds to new information is referred to as _____
Conditional value at Risk (CVAR) - Answers Reports the average potential loss at a given percentile.
APT
(Asset Protection Trust) - Answers A trust that is used to protect the grantor's assets from creditors is....
Tax Diversification - Answers Holding a meaningful amount of assets in investments that are taxed
differently is known as __________.
Annual coupon payments
----------------------------- = CY
Current mkt price - Answers Equation for current yield is __________.
An Event study - Answers Assesses how the price of stock changes in response to new information.
Survivorship Bias - Answers The outperformance of mutual funds available to investors today as a result
of the disappearance of losing funds is known as _______.
Market Premium - Answers Actuarially FairPrice / (1-Insurance Load)=
Basis - Answers The price we pay for a financial asset
Loss of income
Loss of life
Long Term Care
Longevity - Answers Name 4 Insurable Risks.......
The utility Function - Answers Maps out how much extra happiness we get for each additional dollar we
spend.
Life Cycle Theory - Answers Focuses on maintaining a consistent lifestyle throughout a lifetime by
implementing strategies that combine planning and saving
Price- weighted
Asset only approaches - Answers portfolio strategies that do not consider the liability are often referred
to as _______
R-Squared statistic - Answers The amount of variation in the return on the asset that can't be explained
by the market is captured by the _______
Lifetime gift tax
Estate tax - Answers The wealth transfer tax system includes the _____ and the _______.
Marginal Tax Rate - Answers MTR
Sharpe Ratio - Answers Expected return
-
Risk Free Rate
/
Standard Deviation
Gordon Growth Model - Answers V= D1/(r-g)
V= value
D1= dividend
r= required rate
g= growth
this is known as the _______
Effective Tax Rate - Answers ETR
Personal Property and Manufacturing equipment - Answers Section 1245 property is .......
Hot assets - Answers Substantially appreciated inventory or uncollected receivables is known as .......
Adjusted Basis - Answers Property + Improvements - Depreciation = ?
Stochastic - Answers A _______ return means that the returns are random
Income in respect of a Decedent - Answers IRD
Net return= Mort. rate / (1- marginal tax rate)
,ex: MR= 4%
TR=33%
.04/(1-33)= 6% NR - Answers Calculation for net return on a house is ....
Tax gains harvesting - Answers TGH
Loss Aversion - Answers Having a much greater desire to avoid a loss than to acquire a similar gain is
known as _________
Qualified Business Income Deduction - Answers QBI Deduction
26/32.5
28/35 - Answers The AMT nominal marginal tax rates are ______% + ______% because of phase out
there are 2 more ______% + _______%
Alternative Minimum Taxable Income - Answers AMTI
Principal and Income - Answers ______ and ______ have very specific meanings with respect to trust
assets and distributions.
Contribution Base - Answers AGI minus Net operating losses =
Primary Insurance Amount - Answers Social security's PIA
Insurance Load - Answers The difference between the premium and the average expected claim is
the.....
Capital Asset pricing Model - Answers CAPM
Endowment effect - Answers When people value an item more highly once they own it is called
an_________
1-10 yrs. - Answers Treasury Notes have maturities of ________
Immunization - Answers Future payouts with specific, nominal values that are not flexible can be funded
through safe investments using a technique known as ________.
Regression analysis - Answers A statistical technique used to assess whether some phenomenon
depends on certain Characteristics (age of the fund, turnover, expenses, or etc.)
Value & momentum - Answers What are the 2 Bedrock factors?
Grantor trust - Answers When certain rights that allow the grantor to retain a significant amount of
control over the trust property are written into the trust document.....
Sector - Answers An area of the economy that shares a related product or service is a _______
, Certainty Equivalence - Answers For an investor to accept a possibility of investment risk, they must be
compensated with a higher expected wealth from taking that risk is known as......
Term structure of interest rates - Answers The differentiation in yield by different maturities is known as
the _____
Market Efficiency - Answers How a stock's price responds to new information is referred to as _____
Conditional value at Risk (CVAR) - Answers Reports the average potential loss at a given percentile.
APT
(Asset Protection Trust) - Answers A trust that is used to protect the grantor's assets from creditors is....
Tax Diversification - Answers Holding a meaningful amount of assets in investments that are taxed
differently is known as __________.
Annual coupon payments
----------------------------- = CY
Current mkt price - Answers Equation for current yield is __________.
An Event study - Answers Assesses how the price of stock changes in response to new information.
Survivorship Bias - Answers The outperformance of mutual funds available to investors today as a result
of the disappearance of losing funds is known as _______.
Market Premium - Answers Actuarially FairPrice / (1-Insurance Load)=
Basis - Answers The price we pay for a financial asset
Loss of income
Loss of life
Long Term Care
Longevity - Answers Name 4 Insurable Risks.......
The utility Function - Answers Maps out how much extra happiness we get for each additional dollar we
spend.
Life Cycle Theory - Answers Focuses on maintaining a consistent lifestyle throughout a lifetime by
implementing strategies that combine planning and saving
Price- weighted
