Characteristics, Uses and Taxation of Investments - Sample Questions 14 - 19

  1. LEAPS® and Listed Options have in common the following:
    1. Contract terms
    2. Tradable
    3. Maturity dates
    4. Term to expiration
    1. IV
    2. III, IV
    3. I, II, IV
    4. I, II
  2. An investment in rare coins would possibly include the following benefits:
    1. A hedge against inflation.
    2. Appreciation potential.
    3. A ready secondary market.
    4. Liquidity and marketability.
    1. I
    2. I, III
    3. I, II, IV
    4. I, II
  3. Private equity and tradable equities share all of the following features, EXCEPT
    1. Potential for capital appreciation.
    2. Liquidity.
    3. Possible total loss of one's investment.
    4. Ability to achieve alpha.
  4. None of the following investments has fixed income features, EXCEPT
    1. Aggressive Growth Mutual Fund.
    2. Stock index futures.
    3. Preferred stock.
    4. Fund of funds.
  5. Risks associated with collateralized mortgage obligations include:
    1. Lack of liquidity.
    2. Tax risk.
    3. Prepayment and extension.
    4. Complexity.
  6. Unique to qualified retirement plans are the following investments:
    1. Target-dated Retirement mutual funds.
    2. Money Market Funds.
    3. Stable Value/guaranteed rate accounts.
    4. Balanced funds.
Answer Key

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