AAMS 2024/ Latest Questions and Answers/
Verified
An employer plans to use corporate-owned life insurance to informally fund a
nonqualified deferred compensation agreement and wants flexibility regarding
investment choices. Which one of the following types of life insurance should this
employer choose? - >>Variable life insurance
-The latest economic reports have been gloomy, and the stock market is in a
protracted slump. Most of your regular stock customers are selling out their
positions. A new client, Mr. Jones, sees these conditions as a buying opportunity.
You would define his investment personality as - >>contrarian
-As of December 31, 20X1, Bob Larkin has the following financial data:
Bond fund $17,000
Residence$400,000
Vested 401(k) plan$95,000
Auto notes$16,000
Residence mortgage$285,000
Auto payments$7,000
Automobiles$45,000
Checking account$8,000
Utilities$4,000
CD$15,000
Stock$125,000
Home equity loan$40,000
What is Bob's net worth? - >>$364,000
Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 + $125,000
= $705,000. Liabilities = $16,000 + $285,000 + $40,000 = $341,000, so net worth
, is $364,000. Notice that auto notes of $16,000 are included in this calculation, but
auto payments of $7,000 is a cash flow item and therefore not included.
-For the year ending December 31, 20X2, Ted Jones has the following financial
information:
Salaries$70,000
Auto payments$5,000
Insurance$3,800
Food$8,000
Credit card balance$10,000
Dividends$1,100
Utilities$3,500
Mortgage payments$14,000
Taxes$13,000
Clothing$9,000
Interest income$2,100
Checking account$4,000
Vacations$8,400
Donations$5,800
What is the surplus or (deficit) for Ted? - >>$2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 +
$8,000 + $3,500 + $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so
there is a surplus of $2,700
-Which one of the following statements comparing the suitability and fiduciary
standards is correct? - >>Legally, suitability disputes are often resolved in arbitration
whereas fiduciary disputes are ultimately resolved in the courts.
-Which one of the following types of distributions from a qualified retirement plan
may be subject to mandatory 20% withholding? - >>indirect rollover
Verified
An employer plans to use corporate-owned life insurance to informally fund a
nonqualified deferred compensation agreement and wants flexibility regarding
investment choices. Which one of the following types of life insurance should this
employer choose? - >>Variable life insurance
-The latest economic reports have been gloomy, and the stock market is in a
protracted slump. Most of your regular stock customers are selling out their
positions. A new client, Mr. Jones, sees these conditions as a buying opportunity.
You would define his investment personality as - >>contrarian
-As of December 31, 20X1, Bob Larkin has the following financial data:
Bond fund $17,000
Residence$400,000
Vested 401(k) plan$95,000
Auto notes$16,000
Residence mortgage$285,000
Auto payments$7,000
Automobiles$45,000
Checking account$8,000
Utilities$4,000
CD$15,000
Stock$125,000
Home equity loan$40,000
What is Bob's net worth? - >>$364,000
Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 + $125,000
= $705,000. Liabilities = $16,000 + $285,000 + $40,000 = $341,000, so net worth
, is $364,000. Notice that auto notes of $16,000 are included in this calculation, but
auto payments of $7,000 is a cash flow item and therefore not included.
-For the year ending December 31, 20X2, Ted Jones has the following financial
information:
Salaries$70,000
Auto payments$5,000
Insurance$3,800
Food$8,000
Credit card balance$10,000
Dividends$1,100
Utilities$3,500
Mortgage payments$14,000
Taxes$13,000
Clothing$9,000
Interest income$2,100
Checking account$4,000
Vacations$8,400
Donations$5,800
What is the surplus or (deficit) for Ted? - >>$2,700
Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 +
$8,000 + $3,500 + $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so
there is a surplus of $2,700
-Which one of the following statements comparing the suitability and fiduciary
standards is correct? - >>Legally, suitability disputes are often resolved in arbitration
whereas fiduciary disputes are ultimately resolved in the courts.
-Which one of the following types of distributions from a qualified retirement plan
may be subject to mandatory 20% withholding? - >>indirect rollover
