- Jesus Pimental is opening an UTMA account for his grandnephew Dillon who is seven years old. The account objective is to accumulate money towards a college education. As a fiduciary, Pimental should be most concerned with:
- Loss of principal
- Short term volatility
- Inflation risk
- Liability mismatching
- Diversifiable risk includes all of the following except:
- Political risk
- Market risk
- Business risk
- Default risk
- Industry risk
- Recapitalizations, management or leveraged buyouts and restructurings are all events that could impact the quality of a company's debt. This sort of risk is referred to as:
- Reinvestment risk
- Capital risk
- Purchasing power risk
- Event risk
- All of the following investments and strategies would be unsuitable for seniors, EXCEPT:
- Bear market funds
- A laddered bond portfolio
- A money market fund
- A blue chip growth stock
- A managed futures strategy
- All of the following are subject to sovereign risk, EXCEPT
- GKOs (intermediate term Russian government debt)
- Bunds (German treasury bonds)
- Brady bonds
Practice Questions 10 - 13
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