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
The following are true about the trust and estate accounts except:
I. The accounts are set up to manage a deceased person’s estate.
II. They are governed by trusts, usually avoid probate court altogether and allow more assets to be passed on by avoiding fees associated with probate court.
III. The accounts provide multiple benefits to investors by bypassing probate (and saving fees associated therewith).
IV. They allow the trust to possess ownership of the investment account and name the beneficiary at account registration.Correct
Trust and estate accounts are managed almost identically. The main difference in the accounts is that estate accounts are set up to manage a deceased person’s estate.
Incorrect
Trust and estate accounts are managed almost identically. The main difference in the accounts is that estate accounts are set up to manage a deceased person’s estate.
-
Question 2 of 10
2. Question
Which of the following statements is / are true?
I. Non-annualized returns are often difficult to compare to other returns.
II. Holding period return is not always annualized.
III. Holding period return can be measured annually.
IV. Total return cannot be measured annually.Correct
Holding period return is essentially a calculation of total return but as related to a specific holding period, whereas total return is measured annually. Given this fact, holding period return is not annualized.
Nonannualized returns are often difficult to compare to other returns.Incorrect
Holding period return is essentially a calculation of total return but as related to a specific holding period, whereas total return is measured annually. Given this fact, holding period return is not annualized.
Nonannualized returns are often difficult to compare to other returns. -
Question 3 of 10
3. Question
Regarding Life Insurance the following are true EXCEPT?
I. Life insurance is an insurance product underwritten by licensed companies to help investors protect against the loss of income resulting from the death of the insured person.
II. Life insurance cannot be useful in paying for funeral expenses
III. Universal life insurance and variable life insurance are available to investors seeking life insurance.
IV. Life insurance is available for paying future expenses such as college tuition for children.Correct
Life insurance can be useful in paying for funeral expenses, unpaid debt against large assets such as a house, and future expenses such college tuition for children.
Incorrect
Life insurance can be useful in paying for funeral expenses, unpaid debt against large assets such as a house, and future expenses such college tuition for children.
-
Question 4 of 10
4. Question
Which of the following is true?
I. Resale restrictions on stocks are regulated by private agreements between publicly-traded companies and their insider employees.
II. Restricted stock are also called letter stock.
III. Section 1244 stock can have different restrictions on their resale and transference.
IV. Restricted stock should never be on a vesting schedule.Correct
Equity securities can have different restrictions on their resale or transference which then classify the securities as restricted stock (also called Section 1244 stock or letter stock). Resale restrictions on stocks are regulated by the SEC and not merely by private agreements between publicly-traded companies and their insider employees. Restricted stock can often be on a vesting schedule, such that an employee would fail to retain the stock if he departed from the company before it was fully vested.
Incorrect
Equity securities can have different restrictions on their resale or transference which then classify the securities as restricted stock (also called Section 1244 stock or letter stock). Resale restrictions on stocks are regulated by the SEC and not merely by private agreements between publicly-traded companies and their insider employees. Restricted stock can often be on a vesting schedule, such that an employee would fail to retain the stock if he departed from the company before it was fully vested.
-
Question 5 of 10
5. Question
Which of the following statement is true concerning a high coupon?
I. A high coupon is very unattractive for an investor seeking current income
II. A high coupon is very attractive for an investor seeking current income
III. A high coupon commands a premium
IV. The supply of high coupon in low interest rate environment is plentifulCorrect
A high coupon is very attractive for an investor seeking current income. In low interest rate environments, high coupon bonds command a premium due to the fact that the investor is seeking higher income and cannot find it in the low interest rate environment.
Incorrect
A high coupon is very attractive for an investor seeking current income. In low interest rate environments, high coupon bonds command a premium due to the fact that the investor is seeking higher income and cannot find it in the low interest rate environment.
-
Question 6 of 10
6. Question
Which of the following could cause a bond to lose its value?
I. If the bond has a very long maturity
II. If the bond is not duly advertised
III. If the fixed interest payment is enough to justify the expenditure of capital
IV. If the economy is experiencing a boomCorrect
If a bond has a very long maturity, at some point, the fixed interest payments may not be enough to justify today’s expenditure of capital. This would devalue the bond and make it less attractive.
Incorrect
If a bond has a very long maturity, at some point, the fixed interest payments may not be enough to justify today’s expenditure of capital. This would devalue the bond and make it less attractive.
-
Question 7 of 10
7. Question
Which of the following is not a municipal bond?
I. General obligation bond
II. Participation bond
III. Double-capitalized bond
IV. Revenue bondCorrect
According to the way that the bond repayment can be financed, municipal bonds are divided into:
General obligation bond;
Double-barrelled bond;and
Revenue bond.Incorrect
According to the way that the bond repayment can be financed, municipal bonds are divided into:
General obligation bond;
Double-barrelled bond;and
Revenue bond. -
Question 8 of 10
8. Question
Which of the following statement is true about convertible bonds?
I. Convertible bonds are the same as conventional bonds
II. Convertible bonds may be converted from debt instruments to equity securities by the investor
III. Convertible bonds provides investments in the more stable bond market
IV. Higher coupons are offered on convertible bonds.Correct
Convertible bonds differ from conventional bonds in that they may be converted from debt instruments to equity securities by the investor. Convertible bonds are attractive to investors because they provide investments in the more stable bond market while providing the investor with the opportunity to participate in the equity gains of a company should it begin to perform well. Because of this advantage, lower coupons are offered on convertible bonds.
Incorrect
Convertible bonds differ from conventional bonds in that they may be converted from debt instruments to equity securities by the investor. Convertible bonds are attractive to investors because they provide investments in the more stable bond market while providing the investor with the opportunity to participate in the equity gains of a company should it begin to perform well. Because of this advantage, lower coupons are offered on convertible bonds.
-
Question 9 of 10
9. Question
Which of the following statement is true about stocks?
I. They provide the most return to investors
II. They are not volatile
III. They are recommended for growth in an account
IV. They are best suited for retirees seeking current incomeCorrect
Stocks have historically provided the most return to investors. They are highly recommended for growth in an account, but they are also volatile, and loss of capital is possible. A large allocation of stocks in a portfolio is suitable for a young investor able to take on risk, but it is not suitable for a retiree seeking current income and capital preservation.
Incorrect
Stocks have historically provided the most return to investors. They are highly recommended for growth in an account, but they are also volatile, and loss of capital is possible. A large allocation of stocks in a portfolio is suitable for a young investor able to take on risk, but it is not suitable for a retiree seeking current income and capital preservation.
-
Question 10 of 10
10. Question
Which of the following statements is true about it warrants?
I. Warrants allow the investor to buy securities directly from the issuer at a given price within a defined period of time.
II. They are usually included at no additional charge with a new issue of debt instruments.
III. They differ from call options in that they originate from the issuing company.
IV. Call options tend to have longer periods until expiration than warrants.Correct
Warrants are derivative securities that allow the investor to buy securities directly from the issuer at a given price within a defined period of time. Warrants are usually included at no additional charge with a new issue of debt instruments to entice investors to buy the investment. They differ from call options in that they originate from the issuing company, and calls are sold by other investors. Warrants also tend to have longer periods until expiration than options, usually measured in years instead of the months common to options.
Incorrect
Warrants are derivative securities that allow the investor to buy securities directly from the issuer at a given price within a defined period of time. Warrants are usually included at no additional charge with a new issue of debt instruments to entice investors to buy the investment. They differ from call options in that they originate from the issuing company, and calls are sold by other investors. Warrants also tend to have longer periods until expiration than options, usually measured in years instead of the months common to options.