AWMA Exam Practice Questions and Answers – Updated 2024
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Course
Awma
Institution
Awma
AWMA Exam Practice Questions and
Answers – Updated 2024
What are the 4 rules in terms of investing in a small firm? - Answer-Time frame of at least 3-
5 years, diversify among 20-30 different issues, avoid turnover of 30% annually, and sell if and
when 40% of company's shares become owned by ...
According to the investment pyramid, what sequence is correct in terms of increasing safety of
principal (least to most safety of principal)? - Answer✔✔-*futures contracts, balanced mutual
funds, EE bonds
In terms of increased safety of principal, of the four sequences given, the investment pyramid in
the study materials shows futures contracts (least safety), balanced mutual funds, EE bonds
(most safety with principal guaranteed by the U.S. government) is the correct sequence.
Three years ago, Kerri received a gift of 1,000 shares of Mica Inc. common stock from her
parents. The fair market value of the stock on the date of the gift was $20,000. Kerri's parents
purchased the stock several years earlier for $40,000. She sold this stock for $31,000 last week.
What is the amount of gain or loss, if any, from Kerri's stock sale? - Answer✔✔-$0
Where the fair market value on the date of gift is less than the donor's adjusted basis, and the
asset is sold at a price between the fair market value on the date of gift and the donor's
adjusted basis, there is no gain or loss recognized on the sale.
What trust will not entitle the grantor to take an annual exclusion upon funding the trust? -
Answer✔✔-*Bypass trust in which income is paid at the discretion of the trustee
For gifts to a trust to be entitled to the annual exclusion, income must be payable on a
mandatory basis (Section 2503(b)), the beneficiaries must be given a general power of
appointment (such as a Crummey power) over the trust assets, or the trust must conform to the
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