Section 3: Client Investment Recommendations and Strategies

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mrinout
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198680
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Section 3: Client Investment Recommendations and Strategies
Updated:
2013-02-08 14:18:19
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Pass 65
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40 of 130 Questions on Series 65 Exam
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  1. Which of the following is associated with "double taxation of dividends?"

    A) LLC
    B) C-corporation
    C) S-corporation
    D) limited partnership
    B) C-corporation.  (taxed as individual entities where the other structures income/expenses flows through to owners)
    (this multiple choice question has been scrambled)
  2. Discretionary authorization is required before choosing all of the following aspects of a transaction except

    A) the security to be purchased
    B) the security to be sold
    C) whether to purchase or sell a security
    D) the price at which a market order to sell or buy a security is entered
    D) the price at which a market order to sell or buy a security is entered. (Choosing the time or price at which to enter a security does not require written discretionary authorization.)
    (this multiple choice question has been scrambled)
  3. Which of the following would increase your client's net worth?

    A) purchasing $100,000 of stock on margin
    B) stocks inside an individual retirement arrangement appreciation in value
    C) paying off credit card debt with a withdrawal from savings
    D) paying off mortgage debt from a checking account
    B) stocks inside an individual retirement arrangement appreciation in value
    (this multiple choice question has been scrambled)
  4. Jarod Stevens had the following results on four stock sales last year:
    - $15,000 in long-term gains
    - $5,000 in long-term losses
    - $5,000 in short-term gains
    - $13,000 in short-term losses

    Therefore the tax implications were:
    A) short-term capital gain of $8,000
    B) long-term capital gain of $2,000
    C) short-term capital gain of $2,000
    D) long-term capital gain of $15,000
    B) long-term capital gain of $2,000
    (this multiple choice question has been scrambled)
  5. Jarod Stevens had the following results on four stock sales this year:
    - $15,000 in long-term gains
    - $23,000 in long-term losses
    - $15,000 in short-term gains
    - $5,000 in short-term losses

    Therefore the tax implications were:
    A) short-term capital gain of $2,000 taxed at ordinary income rates
    B) short-term capital gain taxed at maximum of 15%
    C) no net gains or losses
    D) long-term capital gain of $8,000, short-term capital gain of $8,000
    A) short-term capital gain of $2,000 taxed at ordinary income rates
    (this multiple choice question has been scrambled)
  6. Jarod Stevens had the following results on four stock sales last year:
    - $15,000 in long-term gains
    - $5,000 in long-term losses
    - $5,000 in short-term gains
    - $17,000 in short-term losses

    Therefore the tax implications were:
    A) long-term capital gain of $2,000
    B) long-term capital gain of $2,000, which offsets ordinary income
    C) short-term capital gain of $2,000
    D) short-term capital gain of $5,000
    B) long-term capital gain of $2,000, which offsets ordinary income... (p. 205 of study guide)
    (this multiple choice question has been scrambled)
  7. Which of the following represent non-taxable gifts?
    1) Hoe Miller pays the tuition of Stephanie Sanders, not a blood relative
    2) Joe gives a friend $18,000
    3) Joe gives a friend $12,000
    4) Joe donates $15,000 to a 501(c)3 organization

    A) 1,3,4
    B) 1,3
    C) 2,4
    D) 2,3
    A) 1,3,4
    (this multiple choice question has been scrambled)
  8. Which of the following is associated with market timing?

    A) efficient market theory
    B) strategic asset allocation
    C) indexing
    D) tactical asset allocation
    D) tactical asset allocation
    (this multiple choice question has been scrambled)
  9. Stock trading below estimated intrinsic value is found typically in a

    A) value mutual fund
    B) growth mutual fund
    C) sector mutual fund
    D) large-cap growth fund
    A) value mutual fund
    (this multiple choice question has been scrambled)
  10.  The AIR for a variable annuity is 3.5%.  Last month, your client received a check for $1,000 based on actual performance of 6%.  If the actual performance is 5% next month

    A) your client will receive slightly less than $1,000
    B) your client will receive more than $1,000
    C) your client will receive $1,000
    D) AIR will be increased
    B) your client will receive more than $1,000

    (p. 243, Pass the 65)
    (this multiple choice question has been scrambled)
  11. Annuities may be purchased in all the following ways except

    A) Periodic immediate
    B) Single premium deferred
    C) Single premium immediate
    D) Periodic deferred
    A) Periodic immediate
    (this multiple choice question has been scrambled)
  12. The major difference between variable annuities and mutual funds involves

    A) investment objectives
    B) tax deferral
    C) bond vs. stock
    D) EPS
    B) tax deferral
    (this multiple choice question has been scrambled)
  13. An annuitant requiring the largest possible monthly check should choose

    A) life only (straight life)
    B) period certain
    C) periodic immediate
    D) joint and last survivor
    A) life only (straight life)
    (this multiple choice question has been scrambled)
  14. Your 60-year-old client contributed $10,000 to a non-qualified variable annuity many years ago.  Now that the account is worth $40,000, the client takes a lump sum withdrawal of $35,000.  If his ordinary income rate is 28%, he will pay

    A) $9,800 in taxes
    B) $8,400 in taxes
    C) no taxes until age 65
    D) no taxes
    B) $8,400 in taxes
    (this multiple choice question has been scrambled)
  15. A type of plan available specifically to employees of non-profit, tax-exempt organizations is called a

    A) Keogh
    B) Section 457
    C) 403(b)
    D) 401(k)
    A) Keogh
    (this multiple choice question has been scrambled)
  16. Under the Uniform Prrudent Investor Act, when may a fiduciary choose not to diversify the assets of a portfolio?

    A) when the beneficiary submits a waiver of affidavit
    B) under no circumstances
    C) when doing so is in the best interest of the beneficiaries
    D) when the portfolio consist entirely of FDIC-insured deposits
    C) when doing so is in the best interest of the beneficiaries
    (this multiple choice question has been scrambled)
  17. Which of the following plans allows only for employer contributions?

    A) 401(k)
    B) SEP-IRA
    C) SIMPLE IRA
    Roth 401(k)
    B) SEP-IRA

    (funded with employer contributions only, unlike SIMPLE IRA or THE 401(k).)
    (this multiple choice question has been scrambled)




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