1. "A". SIPC rules cover brokerage accounts, not bank accounts.
  2. "D". Forwards are bespoke contracts in which both sides to the transaction face counterparty risk.
  3. "B". Though risk management and hedging are traits of hedge funds, they support the primary goal, which is to make money.
  4. "D".
  5. "C". Long term capital appreciation is the main objective in a real estate investment.
  6. "C". Companies issue warrants, not options.
  7. "D". Though they differ in many respects, REITs and DPPs allow for a relatively small upfront investment to gain real estate exposure.
  8. "B". All other positions are bearish.
  9. "C". Treasury notes are capital market investments, not money market.
  10. "B". GNMA income is taxed at all levels, SLMA ("Sallie Mae") channels student loan payments to investors and GNMAs are backed explicitly, not implicitly, by the full faith and credit of the United States government.
  11. "A". Futures contracts are standardized and trade on exchanges. They are liquid, whereas forwards are customized arrangements.
  12. "A". Certain tangible assets have the potential for massive capital gains due to their uniqueness and attractiveness to collectors. Gains are taxed at the investor's marginal tax rate, hardly an advantage; they are often partially or completely illiquid and accurate appraisal of their worth is difficult to obtain.
  13. "C". T-Bills have federal backing and may be found in a money market fund due to their short maturity.
  14. "D". Both trade and have contract terms as they are standardized. Options have terms less than a year, whereas LEAPS® can extend out to thirty nine months.
  15. "D". By their scarcity, rare coins afford investors the opportunity for capital gains and an inflation hedge.
  16. "B". private equity is illiquid and often requires investors to commit to a long term investment. For this reason, investors typically have to be accredited.
  17. "C". Though nominally an equity security, preferred stock correlates more highly with fixed income in terms of its risk/return profile.
  18. "C". Though these structures can be complex, prepayment and extension risks are the primary considerations with CMOs as they are a mortgage backed security.
  19. "C". Stable Value funds and GICs are insurance company products that have been staple offerings in many retirement plans for years.


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