AAMS Practice Exam | Questions & Answers (100 %Score) Latest Updated 2024/2025
Comprehensive Questions A+ Graded Answers | With Expert Solutions
An employer plans to use corporate-owned life insurance to informally fund a nonqualified deferred
compensation agreement and wants flexibility regarding investment choices. Which one of the following
types of life insurance should this employer choose? - Variable life insurance
The latest economic reports have been gloomy, and the stock market is in a protracted slump. Most of
your regular stock customers are selling out their positions. A new client, Mr. Jones, sees these
conditions as a buying opportunity. You would define his investment personality as - contrarian
As of December 31, 20X1, Bob Larkin has the following financial data:
Bond fund $17,000
Residence$400,000
Vested 401(k) plan$95,000
Auto notes$16,000
Residence mortgage$285,000
Auto payments$7,000
Automobiles$45,000
Checking account$8,000
Utilities$4,000
CD$15,000
Stock$125,000
Home equity loan$40,000
What is Bob's net worth? - $364,000
Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 + $125,000 = $705,000. Liabilities =
$16,000 + $285,000 + $40,000 = $341,000, so net worth is $364,000. Notice that auto notes of $16,000
are included in this calculation, but auto payments of $7,000 is a cash flow item and therefore not
included.
, For the year ending December 31, 20X2, Ted Jones has the following financial information:
Salaries$70,000
Auto payments$5,000
Insurance$3,800
Food$8,000
Credit card balance$10,000
Dividends$1,100
Utilities$3,500
Mortgage payments$14,000
Taxes$13,000
Clothing$9,000
Interest income$2,100
Checking account$4,000
Vacations$8,400
Donations$5,800
What is the surplus or (deficit) for Ted? - $2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 + $8,000 + $3,500 + $14,000
+ $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so there is a surplus of $2,700
Which one of the following statements comparing the suitability and fiduciary standards is correct? -
Legally, suitability disputes are often resolved in arbitration whereas fiduciary disputes are ultimately
resolved in the courts.
Which one of the following types of distributions from a qualified retirement plan may be subject to
mandatory 20% withholding? - indirect rollover
