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Question 1 of 10
1. Question
How can inflation be measured?
I. Using the Supplier Price Index
II. Using the Consumer Price Index
III. Using the Producer Price Index
IV. Using the Inflation Price IndexCorrect
There are two common indices for evaluating inflation. The Consumer Price Index is calculated using statistics from the Bureau of Labor. This index, commonly known as the CPI, measures the cost of a basket of goods and services over a set time period. The Producer Price Index, known as the PPI, is calculated by the United States Department of Labor. It takes a slightly different look at the price of goods by measuring the wholesale cost of a certain set of goods over a determined period of time.
Incorrect
There are two common indices for evaluating inflation. The Consumer Price Index is calculated using statistics from the Bureau of Labor. This index, commonly known as the CPI, measures the cost of a basket of goods and services over a set time period. The Producer Price Index, known as the PPI, is calculated by the United States Department of Labor. It takes a slightly different look at the price of goods by measuring the wholesale cost of a certain set of goods over a determined period of time.
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Question 2 of 10
2. Question
How does the government deal with recession?
Correct
Typically, the Fed will try to jolt the economy out of a recession by putting more money in circulation and expanding the supply of credit. Meanwhile, the federal government will implement expansionary fiscal policy, lowering taxes and increasing government expenditures. Investors will then attempt to move out of short-term money market instruments and into the stocks of firms that will benefit from expansionary monetary and fiscal policy.
Incorrect
Typically, the Fed will try to jolt the economy out of a recession by putting more money in circulation and expanding the supply of credit. Meanwhile, the federal government will implement expansionary fiscal policy, lowering taxes and increasing government expenditures. Investors will then attempt to move out of short-term money market instruments and into the stocks of firms that will benefit from expansionary monetary and fiscal policy.
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Question 3 of 10
3. Question
Which phase is an individual in during 40-60 years of age?
Correct
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family. In the consolidation phase, individuals are usually less willing to accept high-risk ventures, but will attempt some moderate-risk investment. Individuals are usually in the consolidation phase between the ages of 40 and 60. The spending phase typically begins at retirement. The gifting phase is basically an individual’s preparations for death.
Incorrect
The accumulation phase is typically the client’s first forty years, during which he or she wants to earn funds to help his or her family. In the consolidation phase, individuals are usually less willing to accept high-risk ventures, but will attempt some moderate-risk investment. Individuals are usually in the consolidation phase between the ages of 40 and 60. The spending phase typically begins at retirement. The gifting phase is basically an individual’s preparations for death.
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Question 4 of 10
4. Question
What factors must be considered by a financial planner while planning finances for a client?
I. Age of the client
II. Risk Tolerance of the client
III. Culture of the client
IV. Education of the clientCorrect
The aspects of a client’s culture that are relevant to financial planning may be obvious, as in the cases of language or race, or less obvious, as in the cases of obscure customs or beliefs. As a client develops his or her knowledge and experience in investment, he or she is likely to be more tolerant of risk. However, clients who are approaching retirement will probably be less willing to make risky investments. A financial planner should acknowledge four main phases in the life cycle.
Incorrect
The aspects of a client’s culture that are relevant to financial planning may be obvious, as in the cases of language or race, or less obvious, as in the cases of obscure customs or beliefs. As a client develops his or her knowledge and experience in investment, he or she is likely to be more tolerant of risk. However, clients who are approaching retirement will probably be less willing to make risky investments. A financial planner should acknowledge four main phases in the life cycle.
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Question 5 of 10
5. Question
Which type of public communication is not required to be filed with FINRA?
Correct
Written communication – written communication that is a road show is not required to be filed. A road show written communication does have to be filed if the offering is for common equity or convertible equities under an issuer that is not at the time required to file reports with the SEC, unless there is a bona fide electronic version of the road show made available.
Incorrect
Written communication – written communication that is a road show is not required to be filed. A road show written communication does have to be filed if the offering is for common equity or convertible equities under an issuer that is not at the time required to file reports with the SEC, unless there is a bona fide electronic version of the road show made available.
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Question 6 of 10
6. Question
What information is allowed to be not provided in the communication of options?
I. Information about how the options disclosure document can be obtained.
II. Information regarding past or future performance of the options.
III. Information regarding the pricing of the options.
IV. Information regarding the rates of return of the options.Correct
The standards that must be followed in communications regarding options include:
Options communications must only provide general descriptions, including the registered clearing agency, the way in which the exchange on which the options trade operates, and a basic description of how options are priced
Options communications must provide the ways in which a copy of the options disclosure document may be obtained
Options communications may not provide statements regarding performance (past or future), rates of return, or the names of any specific options
Options communications must include any statements so dictated by state laws
Options communications may include marketing designs (logos, pictures, graphics, etc.) so long as they are not misleadingIncorrect
The standards that must be followed in communications regarding options include:
Options communications must only provide general descriptions, including the registered clearing agency, the way in which the exchange on which the options trade operates, and a basic description of how options are priced
Options communications must provide the ways in which a copy of the options disclosure document may be obtained
Options communications may not provide statements regarding performance (past or future), rates of return, or the names of any specific options
Options communications must include any statements so dictated by state laws
Options communications may include marketing designs (logos, pictures, graphics, etc.) so long as they are not misleading -
Question 7 of 10
7. Question
What is the specific characteristic of Chapter 11 of Bankruptcy?
Correct
In Chapter 11 bankruptcy, the person, firm, or corporation is allowed to reorganize in order to meet the obligations of debt. After this is done, the court will either confirm or reject the plan of reorganization. Typically, the debtor will remain in possession of his or her assets and will continue to operate the business, though these operations may be subject to the oversight of the court.
Incorrect
In Chapter 11 bankruptcy, the person, firm, or corporation is allowed to reorganize in order to meet the obligations of debt. After this is done, the court will either confirm or reject the plan of reorganization. Typically, the debtor will remain in possession of his or her assets and will continue to operate the business, though these operations may be subject to the oversight of the court.
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Question 8 of 10
8. Question
Which category does the Coverdell ESA fall in?
Correct
An education IRA, also known as a Coverdell ESA, is an education savings plan used for undergraduate and graduate-level expenses.
Incorrect
An education IRA, also known as a Coverdell ESA, is an education savings plan used for undergraduate and graduate-level expenses.
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Question 9 of 10
9. Question
Which of the following are the characteristics of an insurance contract?
I. It is not subject to rescission under any circumstances.
II. It is an aleatory contract, wherein one party receives more benefits than the other.
III. It is a bilateral contract.
IV. It should not include any form of concealment.Correct
Insurance contracts are specific to the person who is being insured. They are unilateral, meaning that only one party may be forced into compliance. They are also considered contracts of adhesion, meaning that the insured can only accept or reject the contract as it is written. They are also called aleatory contracts, because it is possible for one party to receive much larger benefits than the other. Insurance contracts are contracts of utmost good faith, meaning that they can be voided if one party commits fraud or misrepresentation. In an insurance contract, a warranty is a statement made by one party to another that, if false, would have the effect of voiding the contract.
Incorrect
Insurance contracts are specific to the person who is being insured. They are unilateral, meaning that only one party may be forced into compliance. They are also considered contracts of adhesion, meaning that the insured can only accept or reject the contract as it is written. They are also called aleatory contracts, because it is possible for one party to receive much larger benefits than the other. Insurance contracts are contracts of utmost good faith, meaning that they can be voided if one party commits fraud or misrepresentation. In an insurance contract, a warranty is a statement made by one party to another that, if false, would have the effect of voiding the contract.
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Question 10 of 10
10. Question
What is the most specific requirement of a hospital-surgical insurance policy?
Correct
Hospital-surgical insurance policies provide benefits only when the insured needs surgery or needs to be hospitalized; in other words, they do not cover trips to the doctor’s office. These policies may not be adequate to cover long-term illness. Hospital-surgical plans often have the lowest premiums because they offer the fewest benefits.
Incorrect
Hospital-surgical insurance policies provide benefits only when the insured needs surgery or needs to be hospitalized; in other words, they do not cover trips to the doctor’s office. These policies may not be adequate to cover long-term illness. Hospital-surgical plans often have the lowest premiums because they offer the fewest benefits.