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Question 1 of 10
1. Question
Which of the following statements are true of the Uniform Prudent Investor Act (UPIA)
I. It makes it possible for investment managers and fiduciaries to manage a portfolio using methodologies from modern portfolio theory.
II. Measurement of a portfolio’s performance is based on the entire portfolio and not each individual underlying asset.
III. It puts greater emphasis on the total return of a portfolio.
IV. Individual securities, once considered too risky to include in a portfolio, such as commodities, futures, and derivatives, now are acceptable, based on the concept of managing a portfolio’s overall risk.Correct
UPIA makes it possible for investment managers and fiduciaries to manage a portfolio using methodologies from modern portfolio theory. Measurement of a portfolio’s performance is based on the entire portfolio and not each individual underlying asset. Individual securities, once considered too risky to include in a portfolio, such as commodities, futures, and derivatives, now are acceptable, based on the concept of managing a portfolio’s overall risk.
Incorrect
UPIA makes it possible for investment managers and fiduciaries to manage a portfolio using methodologies from modern portfolio theory. Measurement of a portfolio’s performance is based on the entire portfolio and not each individual underlying asset. Individual securities, once considered too risky to include in a portfolio, such as commodities, futures, and derivatives, now are acceptable, based on the concept of managing a portfolio’s overall risk.
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Question 2 of 10
2. Question
Both Uniform Management of Institutional Funds Act (UMIFA) and Uniform Prudent Management of Institutional Funds Act (UPMIFA) are at the core of law for endowments and charities. They provide which of the following?
I. Rules regarding the guidelines for amounts an endowment can spend and on what they can spend the funds.
II. Rules regarding the guidelines for amounts a charity can spend and on what they can spend the funds.
III. Rules regarding the investment of funds.
IV. Rules regarding ethical procedures for investments.Correct
Both Uniform Management of Institutional Funds Act (UMIFA) and Uniform Prudent Management of Institutional Funds Act (UPMIFA) are at the core of law for endowments and charities. They provide rules regarding the guidelines for amounts a charity or endowment can spend and on what they can spend the funds. They also provide rules for the investment of funds.
Incorrect
Both Uniform Management of Institutional Funds Act (UMIFA) and Uniform Prudent Management of Institutional Funds Act (UPMIFA) are at the core of law for endowments and charities. They provide rules regarding the guidelines for amounts a charity or endowment can spend and on what they can spend the funds. They also provide rules for the investment of funds.
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Question 3 of 10
3. Question
UPMIFA provides a guideline for amounts a charity or endowment can spend on and what they can spend the funds on. Which of the following is(are) part of the UPMIFA guideline?
I. Duration and preservation of the endowment fund
II. The purposes of the institution and the endowment fund
III. General economic conditions
IV. Effect of deflationCorrect
UPMIFA also provides the following seven specific guidelines for amounts a charity or endowment can spend and on what they can spend the funds:
1. Duration and preservation of the endowment fund
2. The purposes of the institution and the endowment fund
3. General economic conditions
4. Effect of inflation or deflation
5. The expected total return from income and the appreciation of investments
6. Other resources of the institution
7. The investment policy of the institutionIncorrect
UPMIFA also provides the following seven specific guidelines for amounts a charity or endowment can spend and on what they can spend the funds:
1. Duration and preservation of the endowment fund
2. The purposes of the institution and the endowment fund
3. General economic conditions
4. Effect of inflation or deflation
5. The expected total return from income and the appreciation of investments
6. Other resources of the institution
7. The investment policy of the institution -
Question 4 of 10
4. Question
Which of the following is(are) core agencies for federal regulation in investment management?
I. The Securities and Exchange Commission
II. The Financial Industry Regulatory Agency
III. The District Finance Attorney
IV. The Security Indices AgencyCorrect
The two core agencies for federal regulation in investment management are the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Agency (FINRA).
Incorrect
The two core agencies for federal regulation in investment management are the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Agency (FINRA).
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Question 5 of 10
5. Question
What is the mission of the U.S. Securities and Exchange Commission?
I. To protect investors
II. To maintain fair, orderly, and efficient markets
III. To facilitate capital formation
IV. To oversee self-regulatory organizationsCorrect
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
Incorrect
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
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Question 6 of 10
6. Question
Which of the following is(are) required to register with the SEC?
I. Brokers
II. Dealers
III. Clearing agencies
IV. Self-regulatory organisationsCorrect
The Securities Exchange Act of 1934 created the SEC to interpret securities law, to provide rules regarding the disclosure of information by public companies, and to enforce those rules. Market participants, including securities exchanges, brokers and dealers, self-regulatory organizations, clearing agencies, and others are required to register with the SEC.
Incorrect
The Securities Exchange Act of 1934 created the SEC to interpret securities law, to provide rules regarding the disclosure of information by public companies, and to enforce those rules. Market participants, including securities exchanges, brokers and dealers, self-regulatory organizations, clearing agencies, and others are required to register with the SEC.
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Question 7 of 10
7. Question
The SEC administers the examination and inspection programs for which of the following?
I. Market participants
II. Registered self-regulatory agencies
III. Investment companies
IV. Broker–dealersCorrect
the SEC administers the examination and inspection programs for all registered self-regulatory agencies, investment companies, broker–dealers, and advisors, among others in the securities business.
Incorrect
the SEC administers the examination and inspection programs for all registered self-regulatory agencies, investment companies, broker–dealers, and advisors, among others in the securities business.
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Question 8 of 10
8. Question
Which of the following statements are NOT true of the Financial Industry Regulatory Authority (FINRA)?
I. It is the largest independent, nonprofit self-regulatory organization (SRO) registered under the SEC.
II. It enforces rules related to federal securities law to protect and educate investors.
III. It writes rules related to federal securities law to protect and educate investors.
IV. It examines firms and can punish individuals and firms through fines, suspensions, and expulsion from the securities industry.Correct
FINRA is the largest independent, nonprofit self-regulatory organization (SRO) registered under the SEC for all securities firms doing business in the United States. It writes and enforces rules related to federal securities law to protect and educate investors. FINRA examines firms and can punish individuals and firms through fines,
suspensions, and up to and including expulsion from the securities industry.Incorrect
FINRA is the largest independent, nonprofit self-regulatory organization (SRO) registered under the SEC for all securities firms doing business in the United States. It writes and enforces rules related to federal securities law to protect and educate investors. FINRA examines firms and can punish individuals and firms through fines,
suspensions, and up to and including expulsion from the securities industry. -
Question 9 of 10
9. Question
All brokers must do which of the following it they wish to be licensed and registered by FINRA?
I. Disclose disciplinary action against registered advisers.
II. Satisfy continuing-education requirements.
III. Pass monthly inspections.
IV. Pass qualification exams.Correct
All brokers must be licensed and registered by FINRA, pass qualification exams, and satisfy continuing-education requirements.
Incorrect
All brokers must be licensed and registered by FINRA, pass qualification exams, and satisfy continuing-education requirements.
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Question 10 of 10
10. Question
Investment advisors managing less than $100 million must do which of the following?
I. Register and file Form ADV with the state securities agency.
II. Register and file Form ADV with FINRA.
III. Register and file Form ADV with SEC.
IV. Register and file Form ADV with both FINRA and SEC.Correct
Investment advisors managing less than $100 million must register and file Form ADV with the state securities agency in their principal location.
Incorrect
Investment advisors managing less than $100 million must register and file Form ADV with the state securities agency in their principal location.