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AWMA PRACTICE EXAM 1 QUESTIONS WITH VERIFIED ANSWERS
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AWMA PRACTICE EXAM 1 QUESTIONS WITH VERIFIEDANSWERS 2024-2025
Which of the following qualities is more accurate for younger rich folks
(millennials and GenXers)?
A) Younger wealthy folks want more technological tools for financial planning.
B) Younger wealthy persons have not seen severe bear markets.
C) Younger wealthy folks have directly opposed the financial needs to baby
boomers.
D) Younger wealthy individuals are inclined to seek advice from someone from
their generation. - ANSWER A) Younger rich investors (millennials and GenXers)
are looking for new methods to financial planning, including more technological
possibilities. Furthermore, despite having invested for fewer years, youthful clients
have seen multiple big bad markets. Mod 1
One of the most essential life objectives of affluent folks is
A) Protecting riches.
B) Ensuring their retirement lifestyle.
C) minimizing taxes.
D) travel the world. - ANSWER D) The most common life goals for wealthy
people are good health, travelling the world, and financial achievement. The most
frequent financial goals for people are to protect their wealth, ensure a comfortable
retirement lifestyle, minimize taxes, and leave an estate to their descendants. Mod 1
One of the most significant financial objectives of rich folks is
A) leaving an estate for their heirs.
,B) Having good health.
C) None of these.
D) Traveling the world. - ANSWER A) The most typical financial goals are to
protect wealth, ensure a retirement lifestyle, minimize taxes, and leave an estate to
heirs. The most often reported life goals for wealthy individuals are good health,
travel across the world, and financial achievement. Mod 1
Which of the following is true about sustainable and responsible investments
(SRIs)?
A) Socially responsible investing includes shareholder activism.
B) Baby boomers are the most likely group to invest in SRIs.
C) SRIs offer lesser returns but are a "feel-good" option for investors.
D) SRIs only serve as a negative filter, advising investors to avoid specific assets. -
ANSWER A) Shareholder action, such as adopting shareholder resolutions, can
help firms listen. Gen Xers and millennials value sustainable and responsible
investing. Several studies have recently proven that including ESG variables
improves long-term results. For SRI investments, the adviser must establish a series
of filters to assess a client's specific requirements for a sustainable fund. For
example, smoking may be a major ban for one client, yet religious beliefs may be a
positive filter for the same or another client. Mod 1
In terms of asset control in a private foundation versus a donor-advised fund, which
of the following is true for the latter?
A) Retains the founder's values.
B) Requires long IRS approval.
C) Simpler and less expensive to launch.
,D) Must pay out a particular proportion each year - ANSWER C) Donor-advised
funds (DAFs) are gaining popularity since they are easier and less expensive to set
up than private foundations and do not require the lengthy IRS approval process.
Values may alter with a DAF since large contributors influence this form of
philanthropic fund. Furthermore, only private foundations are required to make
annual payouts; DAFs have more freedom in this regard. Mod 1
What financials would you expect a high net worth (HNW) business owner to
present in your office vs an HNW non-business owner?
A) Similar income, greater assets, and a higher net worth.
B) About the same income with more assets but lower net worth.
C) Higher earnings with fewer assets and a lower net worth.
D) Lower income, fewer assets, and lower net worth - ANSWER A) Income is
comparable across all HNW professions; however, assets and net worth include
business assets, therefore HNW business owners often have more assets and a
greater net worth. Many business owners are exposed to a high level of
unsystematic risk because a considerable portion of their capital is frequently
invested in their business. Mod 1
Wealth advisors should anticipate that their high-net-worth clientele will
A)Do not want their planner to be involved in the philanthropic cause.
B) want their children to have altruistic dispositions.
C) simply want the charity concern to lower tax liability.
D) largely provide assets but do not volunteer their time. - ANSWER B) High net
worth individuals make charity donations primarily for humanitarian reasons; only
half donate to decrease tax exposure as a secondary concern. Advisers must be
aware of and research any societal impact that their clients consider important.
, Furthermore, in the United States, as opposed to the rest of the globe, the favoured
methods of achieving social influence are more religious and contain more
nonfinancial features, such as volunteer work. Mod 1
In comparison to youthful high net worth persons, senior rich people view their
financial needs as more directed toward
A) Managing cash and credit.
B) Digital meetings.
C)Investing outside of stocks.
D. Obtaining and using credit. - ANSWER A) Older clients characterize their needs
as simple: manage cash and credit, and grow investments. Younger consumers have
more complex needs, such as a reluctance to invest in stocks, an interest in virtual
meetings, and a tendency to use credit. Mod 1
Which of the following top overall concerns was consistent among rich clients
under 30 and over 60?
A)Understanding the risk tolerance
B) Fee transparency
C)Excellent investment performance
D) Ensuring children's well-being - ANSWER C) Wealthy clients under 30 and
over 60 have quite different top wealth worries, although one area where they agree
is that they want strong investment performance. Clients under the age of 30 prefer
efficiency and transparency—they want to understand what is suggested, as well as
the expenses and hazards. They will also not hesitate to consult with other people
or sources in order to better grasp their possibilities. This is not the case for the
typical over-60 customer, who will engage with only one trusted adviser and want
that adviser to have a thorough understanding of their needs and risk tolerance.
Furthermore, younger investors prioritize child care while older investors seek
advise on risk tolerance. Mod 1
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