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
Which of the following are true about 529 section plans?
I. The prepaid tuition plan allows investors to pay college tuition, and occasionally room and board, in advance.
II. Any nonqualified distribution will be subject to taxation on earnings and a 10 percent penalty.
III. Any unused portion of the 529 plan cannot be passed to a member of the beneficiary’s immediate family without incurring penalties and taxes on earnings.
IV. The college savings plan allows contributors to name a beneficiary and contribute to the plan on his or her behalf.Correct
Any unused portion of the 529 plan may be passed to a member of the beneficiary’s immediate family without incurring penalties and taxes on earnings.
Incorrect
Any unused portion of the 529 plan may be passed to a member of the beneficiary’s immediate family without incurring penalties and taxes on earnings.
-
Question 2 of 10
2. Question
Which of the following is not a type of the qualified tuition plans?
I. The prepaid tuition plan
II. The college savings plan
III. The coverdell education plan
IV. The uniform gifts planCorrect
Section 529 plans, also known as qualified tuition plans, are college savings investment plans that are administered by each state. There are two types namely: The prepaid tuition plan and the college savings plan.
Incorrect
Section 529 plans, also known as qualified tuition plans, are college savings investment plans that are administered by each state. There are two types namely: The prepaid tuition plan and the college savings plan.
-
Question 3 of 10
3. Question
The following are true about Health savings accounts (HSAs), except:
I. They are used to pay for qualified medical expenses covered by the health plans.
II. Any investment in the account grows tax-free there are no taxes on distributions, so long as they are used for qualified medical expenses.
III. They are accounts designed for people with high-deductible health plans.
IV. These accounts do not allow tax-deductible contributions.Correct
Health savings accounts allow tax-deductible contributions which are then used to pay for qualified medical expenses not covered by the health plans. Moreover, any investment in the account grows tax-free, and there are no taxes on distributions, so long as they are used for qualified medical expenses.
Incorrect
Health savings accounts allow tax-deductible contributions which are then used to pay for qualified medical expenses not covered by the health plans. Moreover, any investment in the account grows tax-free, and there are no taxes on distributions, so long as they are used for qualified medical expenses.
-
Question 4 of 10
4. Question
The following are advantages of POD accounts except:
I. They provide an easy method to keep an investor’s funds and securities from being subjected to the probate courts upon the death of the current owner.
II. They are efficient and helpful in estate planning.
III. The account owner names a beneficiary to receive the assets held in his or her brokerage account upon his/her death.
IV. The process is also usually completed without any additional costs.Correct
The designation of an account registered as payable-on-death (POD), or alternatively as transfer-on-death, provides an easy method to keep an investor’s funds and securities from being subjected to the probate courts upon the death of the current owner. The account owner names a beneficiary to receive the assets held in his or her brokerage account upon the death of the account owner and registers the account as transfer-on-death to the beneficiary. It is widely regarded as the easiest way to ensure that a beneficiary receives assets without going through the probate process, and the process is also usually completed without any additional costs.
Incorrect
The designation of an account registered as payable-on-death (POD), or alternatively as transfer-on-death, provides an easy method to keep an investor’s funds and securities from being subjected to the probate courts upon the death of the current owner. The account owner names a beneficiary to receive the assets held in his or her brokerage account upon the death of the account owner and registers the account as transfer-on-death to the beneficiary. It is widely regarded as the easiest way to ensure that a beneficiary receives assets without going through the probate process, and the process is also usually completed without any additional costs.
-
Question 5 of 10
5. Question
Concerning Tenants-in-Common accounts, which of the following are true?
I. Upon the passing of one of the account owners, that owner’s share of the assets is passed to the owner’s estate.
II. They are the best fit for spouses in business.
III. TIC accounts are made up of two or more individuals that agree to share an investment account but do not wish for the other party to receive their assets in the case of their demise.
IV. Tenants-in-common is a common designation for joint accounts held by business partners, siblings, friends.Correct
Accounts registered as tenants-in-common, or TIC accounts, are a type of joint account. TIC accounts are made up of two or individuals that agree to share an investment account but do not wish for the other party to receive their assets in the case of their demise. It is a common designation for joint accounts held by business partners, siblings, friends, and most investing partners who are not spouses. This is done because usually nonspouse investing partners do not have significantly identical interests and goals, as do spouses.
Incorrect
Accounts registered as tenants-in-common, or TIC accounts, are a type of joint account. TIC accounts are made up of two or individuals that agree to share an investment account but do not wish for the other party to receive their assets in the case of their demise. It is a common designation for joint accounts held by business partners, siblings, friends, and most investing partners who are not spouses. This is done because usually nonspouse investing partners do not have significantly identical interests and goals, as do spouses.
-
Question 6 of 10
6. Question
Despite all the tax exemptions for interest income on municipal bonds, which of the following is still taxable?
Correct
Gains from investments on municipal bonds are ordinarily not taxed. Taxable municipal bonds can be issued if the purpose of the bond revenue has no clear public benefit, but most municipal bonds are tax-exempt. This means not only that coupon payments are not taxed, but also that gains from original issue discount (OID) bonds are tax-exempt as well. Accretion on the discount of municipal OID bonds is treated as tax-exempt interest income.
Despite all these tax exemptions for interest income, capital gains from the sales of bonds is still taxable.
Incorrect
Gains from investments on municipal bonds are ordinarily not taxed. Taxable municipal bonds can be issued if the purpose of the bond revenue has no clear public benefit, but most municipal bonds are tax-exempt. This means not only that coupon payments are not taxed, but also that gains from original issue discount (OID) bonds are tax-exempt as well. Accretion on the discount of municipal OID bonds is treated as tax-exempt interest income.
Despite all these tax exemptions for interest income, capital gains from the sales of bonds is still taxable.
-
Question 7 of 10
7. Question
Equity securities are sold as which of the following?
Correct
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company.
Incorrect
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company.
-
Question 8 of 10
8. Question
What is the purpose of tax-equivalent yield?
Correct
The tax-equivalent yield is the yield that a taxable bond needs to have before taxes in order to achieve the same return as a nontaxable bond.
Incorrect
The tax-equivalent yield is the yield that a taxable bond needs to have before taxes in order to achieve the same return as a nontaxable bond.
-
Question 9 of 10
9. Question
Regarding equity securities, a company’s shares are issued by which of the following?
Correct
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company. Each share represents a certain percentage of ownership in a company. They are issued by the company and sold at an initial offering.
Incorrect
Equity securities, most commonly referred to as stocks, are sold as individual shares of a company. Each share represents a certain percentage of ownership in a company. They are issued by the company and sold at an initial offering.
-
Question 10 of 10
10. Question
The value of a share is determined by which of the following?
Correct
After an initial offering, investors determine the value of shares, in a bid/ask manner, on the secondary market.
Incorrect
After an initial offering, investors determine the value of shares, in a bid/ask manner, on the secondary market.