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Question 1 of 10
1. Question
How is active asset management better than passive asset management?
I. Less Fees
II. Returns in short-term
III.Low Tax
IV. Stable ReturnsCorrect
Incorrect
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Question 2 of 10
2. Question
How can you generate risk free income?
I. Buying the Call and Buying the Security
II. Buying the Put and Buying the Security
III. Selling the Call and Buying the Security
IV. Selling the Call and Buying the SecurityCorrect
A “covered call” is a call contract in which the seller owns the underlying security of the call which he or she is selling. This effectively produces risk-free income for the seller, because if the call is exercised the seller will only have to sell the security from his or her inventory of stocks and then usually at a profit over what was paid for the security.
Incorrect
A “covered call” is a call contract in which the seller owns the underlying security of the call which he or she is selling. This effectively produces risk-free income for the seller, because if the call is exercised the seller will only have to sell the security from his or her inventory of stocks and then usually at a profit over what was paid for the security.
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Question 3 of 10
3. Question
Which of these statements is true?
I. Effective Tax Rate is greater than Marginal Tax Rate
II. Long-Term Capital Gains are taxed at higher rate than Short-Term
III. The effective tax rate is a progressive tax rate.
IV. C corporations help in raising huge amount of capital easily.Correct
Incorrect
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Question 4 of 10
4. Question
If an individual earns 20000 $ as self-employed income and 30000 $, how much can he invest in Qualified Keogh Plans
I. 10000$
II. 20000$
III. 30000$
IV. 50000$Correct
Incorrect
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Question 5 of 10
5. Question
Which of these statements regarding 529 college savings plans is false?
I. Many college savings plans allow contributions in excess of $250,000
II. College savings plans do not allow tuition lock in
III. College savings plans are not subject to market risk
IV. College savings plans allow for enrollment year roundCorrect
Whereas prepaid plans are generally guaranteed by the state in which they are purchased, college savings plans are subject to market risk and may lose value.
Incorrect
Whereas prepaid plans are generally guaranteed by the state in which they are purchased, college savings plans are subject to market risk and may lose value.
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Question 6 of 10
6. Question
Which of these statmements regarding Security Order Types are True?
I. Market orders are executed immediately
II. A Limit Order is always executed regardless of the price
III. A Stop Limit ensures the investor gets trigger price or better Price
IV. Market order happens when the investor want to buy a security at a low price.Correct
Incorrect
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Question 7 of 10
7. Question
In which way do the broker-dealers make money?
I. Commission
II. Mark-Up
III.Spreads
IV Buy and Hold StrategyCorrect
Incorrect
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Question 8 of 10
8. Question
Which of these statements is true?
I. Annualized return = rate of return
II. Total return = income from the security + principal growth
III. IRR = yield to maturity
IV. Holding Period Return = Intrest – DividendsCorrect
The total return of a security is made up of the income the investor receives from a security in addition to the growth of the principal invested. This is usually applied to a one-year holding period. In equation form, this would be total return = income from the security + principal growth. IRR is most commonly seen when the yield to maturity of a bond is calculated.
Incorrect
The total return of a security is made up of the income the investor receives from a security in addition to the growth of the principal invested. This is usually applied to a one-year holding period. In equation form, this would be total return = income from the security + principal growth. IRR is most commonly seen when the yield to maturity of a bond is calculated.
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Question 9 of 10
9. Question
Which of these statements is true?
I. If NPV > 0, the project should be invested in.
II. If IRR > Required Rate of return, the project should be invested in.
III. If beta >1, the stock is less volatile as compared to market.
IV. If IRR < required rate of return, the project should be invested in.Correct
Internal rate of return, or IRR, can best be described as a discount rate that causes the future value of an investment to be equal to its present value. When calculating the present and future values of investments, the IRR is the r value in the equation. In summary, IRR is the percentage used to equate the future cash flows of an investment to its present value. If the IRR of a security is higher than the required rate of return, it is viewed as an attractive investment.
Incorrect
Internal rate of return, or IRR, can best be described as a discount rate that causes the future value of an investment to be equal to its present value. When calculating the present and future values of investments, the IRR is the r value in the equation. In summary, IRR is the percentage used to equate the future cash flows of an investment to its present value. If the IRR of a security is higher than the required rate of return, it is viewed as an attractive investment.
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Question 10 of 10
10. Question
Which of these statements is true?
I. Quick Ratio is measure of Company’s Liquidity.
II. P/E ratio is a measure of future earnings.
III. Debt/Equity ratio measures company’s profitability.
IV. P/E as a tool is not indicative of investors earnings in the future.Correct
Incorrect