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AWMA Exam 3 Questions and Answers- Updated 2024 $12.49   Add to cart

Exam (elaborations)

AWMA Exam 3 Questions and Answers- Updated 2024

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AWMA Exam 3 Questions and Answers- Updated 2024 The top three specialty areas in which high net worth individuals seek advice include all of the following except A)retirement planning. B)tax planning. C)estate planning. D)investment planning. - Answer-A) The top three specialty areas in whic...

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  • October 16, 2024
  • 47
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Awma
  • Awma
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EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024




AWMA Exam 3 Questions and Answers-
Updated 2024

The top three specialty areas in which high net worth individuals seek advice include all of the

following except




A)retirement planning.


B)tax planning.


C)estate planning.


D)investment planning. - Answer✔✔-A) The top three specialty areas in which high net worth

individuals seek advice are tax, estate, and investment planning. Retirement planning is not as

necessary, but may be a minor concern. Mod 1


Concerning behavioral biases and as compared to the mass affluent, high net worth individuals

have




A) more money-avoidance beliefs.


B)less of a tendency for loss aversion.


C)fewer money status beliefs.
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D)more external locus of control. - Answer✔✔-B) The wealthy are more likely than other

investors to have a positive view about money. As compared to the mass affluent (with more

money biases and some found to be earning less as a result), the high net worth individuals

were found to have fewer money-avoidance beliefs, more money-status beliefs, a more internal

locus of control, less of a tendency for loss aversion, and significantly more attribution of their

financial success to two factors: a drive to increase their wealth and a commitment to follow

their passions. Mod 1


In the wealth allocation framework, the liquid asset allocation would most likely include which

one of the following assets?




A)Dividend stocks


B)Preferred stocks


C)Managed global bonds


D)Annuities - Answer✔✔-D) This part of the portfolio contains forms of insurance, such as

insurance, home mortgage, annuities, hedging, direct gold, and cash and cash equivalents. Mod

1


In the wealth allocation framework, the risky asset allocation would most likely include




A) investment real estate.



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B)hedges.


C)large-cap ETFs.


D)balanced mutual funds. - Answer✔✔-A) Risky assets can include many different vehicles, such

as investment real estate, a small business, concentrated stock and stock options, global small

company stocks, some commodities, aggressive inflation protectors, and out of the money

calls/puts on currencies or bonds. Mod 1


In the wealth allocation framework, the main diversified asset allocation would most likely

include




A)annuities.


B)hedges.


C)managed global bonds.


D)home mortgage - Answer✔✔-C) The main diversified assets category, the largest portion of

the portfolio, is still relatively low risk; it can contain managed income investments like dividend

stocks, preferred stocks, own company stock (unless risky), and managed global bonds. Mod 1


Concerning the wealth allocation framework, which one of the following portfolio structures is

best recommended for a risk averse high net worth investor?




A)20% liquid assets/75% main diversified assets/5% risky assets

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, EMILLECT 2024/2025 ACADEMIC YEAR ©2024 EMILLECT. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER, 2024


B)30% liquid assets/50% main diversified assets/20% risky assets


C)25% liquid assets/60% main diversified assets/15% risky assets


D)45% liquid assets/50% main diversified assets/5% risky assets - Answer✔✔-D) In the wealth

allocation framework, risky investments for a risk averse high net worth investor are

recommended to be only 5% to 10% of the portfolio. A minimum of 20% of liquid assets is

recommended for the portfolio allocations of all risk levels. The main portfolio should be only

40%-70% of total assets. Mod 1


In the wealth allocation framework, human capital is in which one of the following portfolio

"buckets"?




A) Hedging assets


B)Main diversified assets


C)Liquid assets


D)Risky assets - Answer✔✔-C) In the wealth allocation framework, human capital is included in

the liquid assets "bucket." Mod 1


In the wealth allocation framework, human capital can best be defined as the high net worth

individual's ability to leverage




A) their children.

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