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AWMA EXAM QUESTIONS AND 100% VERIFIED ANSWERS
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AWMA EXAM QUESTIONS AND 100% VERIFIED ANSWERS...
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AWMA EXAM QUESTIONS AND 100% VERIFIEDANSWERS
Intestate - Answer Dying with no will. A probate court will determine how their
assets are distributed.
1031 Exchange: ANSWER A real estate investment property swap that defers
capital gains taxes. The word, derived from Section 1031 of the Internal Revenue
Code (IRC), is used by real estate agents, title companies, investors, and others.
Some people even insist on using it as a verb, such as, "Let's 1031 that building for
another."
Emotional Intelligence: ANSWER The ability to recognize and manage one's own
emotions, as well as use those feelings to influence cognition and behavior.
Emotional Perception - Answer The ability to recognize and appropriately
articulate emotions.
For example, a client has expressed anger during sessions with his adviser. The
client recognizes that his anger derives from his work and is reacting to his
adviser's financial advice.
Emotional Facilitation: ANSWER Describes how people use their emotions to help
them think, as well as how they adapt to changes in their environment and
themselves.
Example: A customer informs her planner that she prefers afternoon meetings at
the planner's office. She is aware that she will be in a better mood and free of
distractions.
Emotional Understanding: ANSWER Understanding and interpreting emotions, or
applying emotional knowledge.
,Emotional Regulation - Answer Emotional regulation promotes both emotional and
intellectual development. Individuals who are open and understanding of their
sentiments might learn to control their emotions and dictate how they are
expressed.
Total Risk: ANSWER A combination of systematic and unsystematic risk. It is
quantified using the standard deviation (variability).
Systematic Risk - ANSWER The risk of return inherent in the "system" of which
any asset is a component. Because analogous securities tend to move
systematically, they can be found in almost any security. It cannot be diversified.
- Purchasing power risk.
- Reinvestment risk
- Interest-rate risk
- Market Risk
- Exchange rate risk.
Purchasing Power (Inflation) Risk - Answer The risk of losing purchasing power as
inflation rises. Bond prices are particularly vulnerable to inflation because interest
and principal are often fixed in dollar quantities. Increased inflation will cause bond
prices to fall.
The inflation rate is pro-cyclical (going in the same direction as the overall
economy), although it will lag by a year or more.
Reinvestment Risk - ANSWER The possibility that market interest rates have
dropped by the time payments from an investment are received. An investor is
forced to reinvest his payment amount at a period when interest rates are less
advantageous than they were previously.
, Market Risk - ANSWER This risk originates from causes unrelated to any specific
security. Political developments, broad economic and social shifts, and investor
sentiment are all factors to consider.
It is systemic in the sense that the price of any investment can rise or fall in
ANSWER to the financial performance of these larger companies.
Exchange Rate Risk (Currency Risk) - Answer This risk arises when the value of
foreign currencies fluctuates versus the US dollar. If the foreign currency
strengthens, the return will be positive. If the foreign currency depreciates, the
return is negative.
Exogenous Risk - ANSWER Risks that exist outside of the financial system and are
taken into account during fundamental analysis.
Endogenous Risk - Answer Risk exists within the financial system itself. This form
of risk might be the most dangerous, and it is frequently disregarded or
underestimated by counselors and financial planners.
Unsystematic Risk - ANSWER A risk that affects just a small number of assets.
There is also risk that is unique or exclusive to an item. Diversification allows for a
reduction.
- Business Risk
- Financial Risk
- Default Risk
- Credit risk.
- Liquidity Risk
- Event risk
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