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Question 1 of 10
1. Question
An insurance policy that helps the insured, injured party, usually for a specific period of time;
I. Provides relief to the injured party to cope with his injury.
II. Provides payment to the injured party, to cope with the loss of income.
III. Provides payment to the injured, based on the extent of his injury.
IV. Provides payment to the injured, based on his present income.Correct
Disability insurance is an insurance policy that helps the insured cope with the loss of income resulting from disability by providing payments to the injured party, usually for a specific period of time. Needs for disability insurance vary from client to client. The main and most obvious need for compensation is replacement of current income. A client with a high income will require a higher disability income. Also of consideration is the client’s occupation.
Incorrect
Disability insurance is an insurance policy that helps the insured cope with the loss of income resulting from disability by providing payments to the injured party, usually for a specific period of time. Needs for disability insurance vary from client to client. The main and most obvious need for compensation is replacement of current income. A client with a high income will require a higher disability income. Also of consideration is the client’s occupation.
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Question 2 of 10
2. Question
Which of the following is false?
I. Awareness of the client existing investment is essential to making informed suggestions to the client
II. There are special financial benefits for the investor, if the advisor knows the quantity & types of client’s investment
III. An advisor is better equipped to make sound financial suggestions if he knows every facet of the client’s financial status.
IV. Certain investment do not provide investors with break points even when investor reaches some certain levels of investment.Correct
Awareness of the client’s existing investments is key to making informed suggestions to the client. If the client’s current holdings are suitable to the client’s needs, then the advisor need not acquire those holdings again. If they are not suitable to the client’s needs, then the advisor should inform the client thereof. There are also special financial benefits for the investor, should the advisor know the quantity and types of existing investments. Certain investments, such as mutual funds, provide investors with discounts known as break points when the investor reaches certain levels of investment.
Incorrect
Awareness of the client’s existing investments is key to making informed suggestions to the client. If the client’s current holdings are suitable to the client’s needs, then the advisor need not acquire those holdings again. If they are not suitable to the client’s needs, then the advisor should inform the client thereof. There are also special financial benefits for the investor, should the advisor know the quantity and types of existing investments. Certain investments, such as mutual funds, provide investors with discounts known as break points when the investor reaches certain levels of investment.
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Question 3 of 10
3. Question
The following statement are false except:
I. It is important for an investor to know which types of investments are tax advantaged and which are not.
II. Knowing a client’s adjusted gross income and their respective tax brackets also helps the advisor make informed suggestions
III. The investor would benefit from the losses from the sale of a toxic asset and the effect it may have on the investor’s adjusted gross income.
IV. Investors investing in tax-deferred retirement accounts are affected by tax implications from capital gains or interest received in the deferred account.Correct
Investors investing in tax-deferred retirement accounts do not need to be worried about tax implications from capital gains or interest received in the deferred account.
Incorrect
Investors investing in tax-deferred retirement accounts do not need to be worried about tax implications from capital gains or interest received in the deferred account.
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Question 4 of 10
4. Question
A young worker is looking to save for the future; investing in bonds would be appropriate to meet which of the following needs?
I. Retirement
II. His children’s college tuition
III. Purchase of a house
IV. The lease of a business factory.Correct
Bonds may not be the best investment for a young worker who is saving for retirement, as they provide little growth, but if that same worker is saving for his children’s college tuition or to buy a house, bonds may be the appropriate investment vehicle.
Incorrect
Bonds may not be the best investment for a young worker who is saving for retirement, as they provide little growth, but if that same worker is saving for his children’s college tuition or to buy a house, bonds may be the appropriate investment vehicle.
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Question 5 of 10
5. Question
Which of the following statements is false?
I. Stock market efficiency results in share prices that always reflect all current and relevant information.
II. Efficient Market Hypothesis claims that it is impossible for investors to receive returns in deficit of normal market returns
III. Efficient Market Hypothesis makes it impossible to purchase undervalued shares or sell shares for inflated amounts.
IV. A Strong form market efficiency suggests that, not all information, public and nonpublic, is calculated into the current value of the security.Correct
The Efficient Market Hypothesis claims that it is impossible for investors to receive returns in excess of normal market returns. The reason for this statement is that stock market efficiency results in share prices that always reflect all current and relevant information.
Strong form market efficiency suggests that all information, public and non-public, is calculated into the current value of the security.Incorrect
The Efficient Market Hypothesis claims that it is impossible for investors to receive returns in excess of normal market returns. The reason for this statement is that stock market efficiency results in share prices that always reflect all current and relevant information.
Strong form market efficiency suggests that all information, public and non-public, is calculated into the current value of the security. -
Question 6 of 10
6. Question
The following are true concerning notice filing, except:
I. It occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator.
II. It does not require documents filed with their SEC registration statements.
III. Registration only occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933.
IV. It occurs when the issuer submits to an application process that includes information regarding the business.Correct
Notice filing occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator. Notice filing requires documents filed with their SEC registration statements, amendments thereto, a relevant valuation of the securities, and consent to service of process.
Incorrect
Notice filing occurs when the issuer provides documents from the Securities Exchange Commission (SEC) filing to the administrator. Notice filing requires documents filed with their SEC registration statements, amendments thereto, a relevant valuation of the securities, and consent to service of process.
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Question 7 of 10
7. Question
Registration by coordination occurs after the administrator is supplied with:
I. prospectuses in compliance with the Securities Act of 1933
II. the issuer’s articles of incorporation
III. bylaws
IV. the underwriting agreement.Correct
Registration by coordination occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933, the issuer’s articles of incorporation, bylaws, and the underwriting agreement.
Incorrect
Registration by coordination occurs after the administrator is supplied with prospectuses in compliance with the Securities Act of 1933, the issuer’s articles of incorporation, bylaws, and the underwriting agreement.
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Question 8 of 10
8. Question
Which of the following statement is false?
I. After the registration of a nonexempt security, the administrator does not have the authority to demand that any amendments to the security be submitted.
II. The registration of the newly issued security is not valid after six months from the date of issuance.
III. If additional shares are issued without significant changes to the security within the period of one year post registration, a new registration is unnecessary.
IV. The registration of the newly issued security is valid for one year after the date of issuance.Correct
After the registration of a nonexempt security, the administrator has the authority to demand that any amendments to the security be submitted in a timely fashion to ensure the maintenance of valid and relevant information regarding the new issuance of the security. The registration of the newly issued security is valid for one year after the date of issuance. If additional shares are issued without significant changes to the security within that period of time, a new registration is unnecessary.
Incorrect
After the registration of a nonexempt security, the administrator has the authority to demand that any amendments to the security be submitted in a timely fashion to ensure the maintenance of valid and relevant information regarding the new issuance of the security. The registration of the newly issued security is valid for one year after the date of issuance. If additional shares are issued without significant changes to the security within that period of time, a new registration is unnecessary.
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Question 9 of 10
9. Question
Which of the following securities are exempt from registration?
I. Securities issued by United States governments and Canadian governments, and guaranteed by those governments.
II. Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States.
III. Securities that are issued and guaranteed by depository institutions that are privately chartered.
IV. Securities issued and guaranteed by insurance companies.Correct
An exempt security is exempt due to the nature of the issuer. Securities issued by United States governments and Canadian governments, and guaranteed by those governments, are exempt from registration under the Uniform Securities Act (USA). Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States is also exempt from registration under the USA. They are exempt from registration due to the relationship foreign governments have with the United States and the presumed trustworthiness of those governments. Other exempt securities include those securities that are issued and guaranteed by depository institutions that are federally chartered or authorized to transact business in a given state; securities issued and guaranteed by insurance companies…
Incorrect
An exempt security is exempt due to the nature of the issuer. Securities issued by United States governments and Canadian governments, and guaranteed by those governments, are exempt from registration under the Uniform Securities Act (USA). Any security issued and guaranteed by a foreign government that retains a diplomatic status with the United States is also exempt from registration under the USA. They are exempt from registration due to the relationship foreign governments have with the United States and the presumed trustworthiness of those governments. Other exempt securities include those securities that are issued and guaranteed by depository institutions that are federally chartered or authorized to transact business in a given state; securities issued and guaranteed by insurance companies…
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Question 10 of 10
10. Question
Which of the following statements is true?
I. Federally covered securities such as rights, warrants, debt securities, and preferred stock are exempt securities.
II. Zero coupon bonds generally have long-term maturities ranging from ten to twenty years.
III. Zero coupon bonds have a lower rate of price fluctuations compared to regular bonds.
IV. A broker is a person or institution which acts as a middleman between the buyer of a security and the seller of a security.Correct
Zero coupon bonds are bonds which sell at a discounted price because they do not pay interest. They generally have long-term maturities ranging from ten to twenty years. Also, they have a higher rate of price fluctuation on the open market than regular bonds.
Incorrect
Zero coupon bonds are bonds which sell at a discounted price because they do not pay interest. They generally have long-term maturities ranging from ten to twenty years. Also, they have a higher rate of price fluctuation on the open market than regular bonds.