Your client earns $100,000 from employment and $10,000 from investments each year. Her bills total
$95,000 annually. What is her discretionary income?

• A.$5,000
• B.$20,000
• C.$15,000
• D.$10,000

Comment: *

Name: *

Email: *

Verification: *

Seth's brother Keith manages a successful private equity fund. Seth is an investment advisor and has thoroughly evaluated Keith's fund. He believes it would be an excellent investment for some of his clients. If Seth does not disclose his relation to Keith prior to recommending this investment, what value does he stand to breach with his client?

• A.Integrity
• B.Confidentiality
• C.Compliance
• D.Duty of care

Comment: *

Name: *

Email: *

Verification: *

An investor wishes to add another security to his portfolio. He is looking at a stock that has a correlation with the portfolio of 0.99. What should the advisor tell this investor?

• A.This security will not reduce the risk of the portfolio, as the correlation is almost positively perfect.
• B.This security will reduce the risk of the portfolio, as there is an almost perfect positive correlation.
• C.This security will reduce the risk of the portfolio, as the correlation is very low.
• D.This security will not reduce the risk of the portfolio, as the correlation is too low.

Comment: *

Name: *

Email: *

Verification: *

Rank the decisions made by a portfolio manager in order of importance for the success of the portfolio.

• A.Sector weighting, security selection, asset allocation
• B.Asset allocation, security selection, sector weighting
• C.Security selection, sector weighting, asset allocation
• D.Asset allocation, sector weighting, security selection

Comment: *

Name: *

Email: *

Verification: *

A mutual fund sales representative is under pressure to meet certain sales objectives. However, he consistently ignores these quotas when making client recommendations. Which standard of conduct has he followed?

• A.Provision of appropriate cautions for potentially unsuitable investments
• B.The obligations to put the client's interests first
• C.The obligation to keep client information confidential
• D.The maintenance of a high standard of professional knowledge

Comment: *

Name: *

Email: *

Verification: *