Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemy free practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
What is an example of a security that provides current income through semiannual coupon payments?
Correct
Corporate bonds are a common example of a security that provides current income through semiannual coupon payments. Additionally, large, stable equity securities can also provide current income through relatively predictable and stable dividend payments.
Incorrect
Corporate bonds are a common example of a security that provides current income through semiannual coupon payments. Additionally, large, stable equity securities can also provide current income through relatively predictable and stable dividend payments.
-
Question 2 of 10
2. Question
Achieving a very high level rate of return through capital appreciation is the goal of…
Correct
The goal of an aggressive growth investment objective is to achieve a very high level rate of return through capital appreciation. This investment objective is a specific subset of the capital appreciation objective in which the securities that are targeted include only those with extremely high expected rates of return.
Incorrect
The goal of an aggressive growth investment objective is to achieve a very high level rate of return through capital appreciation. This investment objective is a specific subset of the capital appreciation objective in which the securities that are targeted include only those with extremely high expected rates of return.
-
Question 3 of 10
3. Question
Investors with which objective have a much longer time horizon?
Correct
Investors with this objective typically have a much longer time horizon in order to minimize the impacts of market downturns.
Incorrect
Investors with this objective typically have a much longer time horizon in order to minimize the impacts of market downturns.
-
Question 4 of 10
4. Question
What is one example of a security for a tax exempt income investment objective?
Correct
One example of a security for a tax exempt income investment objective is a municipal bond, which is exempt from federal taxes and, possibly, many state and local taxes as well.
Incorrect
One example of a security for a tax exempt income investment objective is a municipal bond, which is exempt from federal taxes and, possibly, many state and local taxes as well.
-
Question 5 of 10
5. Question
Which of the following statements is true regarding a defensive investment strategy?
Correct
A defensive investment strategy is one in which an investor is primarily concerned with protection of investment principal rather than potential gains. Put into the context of the trade-off between risk and return, an investor utilizing a defensive strategy would be primarily concerned with mitigating risk and would try to maximize expected returns given an acceptable level of risk. Typically, a defensive investment strategy would be utilized by investors who are either older or would have a shorter investing time horizon. Contrary to younger investors, older investors or those saving for a near-term event do not have sufficient time to wait through market fluctuations.
Incorrect
A defensive investment strategy is one in which an investor is primarily concerned with protection of investment principal rather than potential gains. Put into the context of the trade-off between risk and return, an investor utilizing a defensive strategy would be primarily concerned with mitigating risk and would try to maximize expected returns given an acceptable level of risk. Typically, a defensive investment strategy would be utilized by investors who are either older or would have a shorter investing time horizon. Contrary to younger investors, older investors or those saving for a near-term event do not have sufficient time to wait through market fluctuations.
-
Question 6 of 10
6. Question
Which type of investors would choose an defensive investment strategy?
Correct
Typical investments within an aggressive investment strategy may include small and mid-cap equity securities and international securities, all of which have potential for higher returns but also substantially higher levels of risk. As such, investors choosing to invest in aggressive strategies typically have longer time horizons so that market fluctuations should have time to correct prior to the point at which they will need to liquidate or begin drawing down funds. Younger investors who are saving for a retirement that is 30 or 40 years in the future will likely pursue an aggressive investment strategy. Additionally, investors who need to achieve a high level of return may choose to pursue an aggressive strategy. Typically, a defensive investment strategy would be utilized by investors who are either older or would have a shorter investing time horizon.
Incorrect
Typical investments within an aggressive investment strategy may include small and mid-cap equity securities and international securities, all of which have potential for higher returns but also substantially higher levels of risk. As such, investors choosing to invest in aggressive strategies typically have longer time horizons so that market fluctuations should have time to correct prior to the point at which they will need to liquidate or begin drawing down funds. Younger investors who are saving for a retirement that is 30 or 40 years in the future will likely pursue an aggressive investment strategy. Additionally, investors who need to achieve a high level of return may choose to pursue an aggressive strategy. Typically, a defensive investment strategy would be utilized by investors who are either older or would have a shorter investing time horizon.
-
Question 7 of 10
7. Question
Which of the following provides more flexibility in risk tolerance?
Correct
Long-term liquidity needs provide for much more flexibility in risk tolerance than do short-term liquidity needs. While short-term liquidity needs make it more difficult to appropriately time withdrawals so that withdrawals are not taken at times of low performance, with a longer time horizon until liquidity is needed, an investor can increase the risk in his portfolio without being adversely impacted by the fluctuations in portfolio value. With longer term liquidity needs, an investor has more time to experience the fluctuations in the price of a security without having immediate needs to withdraw those funds.
Incorrect
Long-term liquidity needs provide for much more flexibility in risk tolerance than do short-term liquidity needs. While short-term liquidity needs make it more difficult to appropriately time withdrawals so that withdrawals are not taken at times of low performance, with a longer time horizon until liquidity is needed, an investor can increase the risk in his portfolio without being adversely impacted by the fluctuations in portfolio value. With longer term liquidity needs, an investor has more time to experience the fluctuations in the price of a security without having immediate needs to withdraw those funds.
-
Question 8 of 10
8. Question
What is the impact of significant increase in an investor’s income?
Correct
A significant increase in an investor’s income will, all other factors remaining constant, increase an investor’s risk tolerance because his discretionary income will have also increased.
Incorrect
A significant increase in an investor’s income will, all other factors remaining constant, increase an investor’s risk tolerance because his discretionary income will have also increased.
-
Question 9 of 10
9. Question
Which of the following statement is NOT true regarding an investor’s willingness to take risk?
Correct
An investor’s willingness to take risk is a behavioral trait that is not related to an investor’s personal financial situation. It is driven by each investor’s personal preferences and willingness to accept and live with volatility. On the other hand, an investor’s ability to take risk is driven by an investor’s financial situation and objectives.
Incorrect
An investor’s willingness to take risk is a behavioral trait that is not related to an investor’s personal financial situation. It is driven by each investor’s personal preferences and willingness to accept and live with volatility. On the other hand, an investor’s ability to take risk is driven by an investor’s financial situation and objectives.
-
Question 10 of 10
10. Question
From which rule is this statement taken: “a member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade?”
Correct
FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade states that “a member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”
Incorrect
FINRA Rule 2010 Standards of Commercial Honor and Principles of Trade states that “a member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”