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AAMS EXAM 2024 QUESTIONS WITH COMPLETE SOLUTIONS!!
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AAMS EXAM 2024 QUESTIONS WITH COMPLETE SOLUTIONS!!
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Name: Score:299 Multiple choice questions
Term 1 of 299
One reason to use active investment management is:
the potential for downside protection
Grantor retained income trust (GRIT)
the NQDC is offered in lieu of the qualified plan
yes, if the individual has earned income
Term 2 of 299
Which of these is NOT a reason why an employer might consider choosing a nonqualified plan
over a qualified plan?
greater flexibility
typically provides an immediate income tax deduction for the employer
can discriminate in favor of highly compensated employees
subject to fewer ERISA reporting and disclosure requirements
Term 3 of 299
David Vandercamp passed away this year, leaving a sizable estate. His will left, among other
things, 2,000 shares of GE to his daughter, Bianca. These shares had been purchased as a single
lot ten years earlier. Bianca and her husband sold the stock. What was their cost basis in these
shares?
Father's cost basis less a 25% excise tax
Fair market value on the day of his death
Market price as of the sale date
Father's cost basis
,Term 4 of 299
Which type of trust is one from which the grantor receives all income earned by the trust?
Grantor retained income trust (GRIT)
netting long-term gains and long-term losses
the greater the level of risk for a given rate of return
capital goods
Term 5 of 299
Which of these are provisions of the Sarbanes-Oxley Act of 2002?
I. Requires an anti-money-laundering compliance program to be in effect
II. Requires chief executive officers of public corporations to certify financial information in the
quarterly and annual reports
III. Makes unlawful the extending of credit to any director or executive officer
IV. Requires investment companies to verify the identity of any person opening an account
a statement discussing the specific investments to be included in the portfolio
despite the overall stock market recovery since the market meltdown in 2008, trust levels of
financial services remain low
you should begin investing many years before retirement so that compounded returns
increase your retirement fund
II and III
Term 6 of 299
If the market rate on coupon bonds similar to Bond A increases, Bond A's duration will:
Small stocks provide more diversification than large stocks
increase by 11.7%
decrease proportionally to the percentage change in market rates
durable power of attorney
,Term 7 of 299
Which of the following are characteristics of supplemental executive retirement plans (SERPs)?
I. SERPs do not provide disability retirement benefits
II. SERPs are designed for a select group of management or highly compensated employees
III. SERPs must be unfunded
IV. Benefits are paid by the employer out of general assets
the insured is permitted to borrow against the policy
inadequate time horizons
receiving a 10% raise at work
II and IV
Term 8 of 299
The risk-adjusted measurement that can be used by itself (without comparison to something else)
is the:
business risk
Jensen's alpha
the investor's time horizon
intestate
Term 9 of 299
All of the following provide a clearer picture of the client's needs except:
succession planning in place for a client involved in ownership of a small business
anticipated retirement lifestyle
bad experiences with particular investments
the current rate of inflation
, Term 10 of 299
When the personal circumstances of a client change, which asset management step does the
investment professional return to?
data gathering
Series EE bonds
anchoring
default risk
Term 11 of 299
All of the following assets would be included in a decedent's gross estate except:
the decedent's vested interest in a single life annuity on the decedent's life
adult day care
the employer is taxed on taxable earnings in the plan as they accumulate
the employer's deduction is available in the year that a contribution is made
Term 12 of 299
Michelle purchases an annuity that offers a guaranteed minimum interest rate and a guarantee
against loss of principal if the contract is held to term. However, if the S&P 500 moves upward,
Michelle's annuity might end up accruing more than the guaranteed minimum interest rate.
Michelle has purchased
large company stocks
a retiree's income tax bracket may be higher at the time of distribution
an equity-indexed annuity
a limited partner's participation is strictly "passive"
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