AAMS Accredited Asset Management Specialist Test Questions with 100% Complete Answers

All of the following are major steps in the asset management process except A) Making and implementing recommendations B) Gathering Data C) Establishing Goals D) Establishing an asset allocation policy - cORRECT sOLUTION D) Establishing an asset allocation policy Stefan's business plan includes the following goal: "I will contact 50 prospective clients and document this activity in the CRM for tracking purposes." Which primary element of a good goal is missing? This goal is not A) achievable. B )relevant. C) time-framed. D) specific. - cORRECT sOLUTION C) time-framed. The acronym to remember for goal setting is S.M.A.R.T, which stands for Specific, Measurable, Achievable, Relevant, and Time-Framed. The flaw in this goal is that it is not time-framed Which one of the following is NOT an invested asset? A) Real estate investment trust B) 401(k) account C) 180-day certificate of deposit D) Individual brokerage account - cORRECT sOLUTION C) 180-day certificate of deposit Victoria Gregory's financial situation is as follows: Cash/cash equivalents$15,000 Short-term debts$23,000 Long-term debts$140,000 Taxes$8,000 Invested assets$45,000 Use assets$192,000 What is her net worth? A) $112,000 B) $89,000 C) $81,000 D) $252,000 - cORRECT sOLUTION B) $89,000 Assets = Cash/cash equivalents + Invested assets + Use assets ($15,000 + $45,000 + $192,000 = $252,000). Liabilities = Short-term debts + Long-term debts ($23,000 + $140,000 = $163,000). Assets - Liabilities = Net Worth, so $252,000 - $163,000 = $89,000. Which one of the following statements best describes the income statement? A) The income statement indicates, as of a definite date, the client's receipts and disbursements. B) The income statement indicates, as of a definite date, what an individual owns and owes. C) The income statement indicates, for a certain period of time, the growth of a client's assets and liabilities. D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. - cORRECT sOLUTION D) The income statement indicates, for a certain period of time, an individual's cash inflows and outflows. All of the following provide a clearer picture of the client's needs except A) anticipated retirement lifestyle. B) the current rate of inflation. C) bad experiences with particular investments. D) Succession planning in place for a client involved in ownership of a small business. - cORRECT sOLUTION B) the current rate of inflation. The current rate of inflation does not specifically provide insight into a client's needs, although the rate of future inflation anticipated by the client will have an impact on the client's future needs. Which one of the following is considered a "foundation" goal? A) College funding B) Emergency fund C) Mortgage payoff D) Retirement savings - cORRECT sOLUTION B) Emergency fund Which one of these is the best written financial goal? A) Acquire $300,000 for retirement B) Accumulate $15,000 for a boat purchase in two years C) Make money in the stock market D) Establish a fund for purchasing a second home in five years - cORRECT sOLUTION B) Accumulate $15,000 for a boat purchase in two years What is the appropriate date to identify the statement of financial position of a calendar-year client for the year 20XX? A) At December 31, 20XX B) For the period beginning January 1, 20XX C) For the period from January 1 to Decemebr 31, 20XX D) At January 1, 20X1 - cORRECT sOLUTION A) At December 31, 20XX How are assets valued on a statement of financial position? A) Residual value B) Actual cash value C) Replacement value D) Fair market value - cORRECT sOLUTION D) Fair market value All of these are topics that needs to be clarified before making investment recommendations except A) the client's goals. B) risk parameters of the client. C) basis for portfolio review. D) time horizons of the goals. - cORRECT sOLUTION C) basis for portfolio review. All of these are attributes of a good business plan except the plan A) is written. B) only includes business-related goals. C) includes realistic action steps. D) is shared with someone. - cORRECT sOLUTION B) only includes business-related goals. When the personal circumstances of a client change, which asset management step does the investment professional return to? A) Analyzing information B) Monitoring performance C) Implementing recommendations D) Data gathering - cORRECT sOLUTION D) Data gathering Which of these is the most important factor in establishing trust with a client? A) Speaking with confidence B) Demonstrating professionalism and honesty C) Having a pleasant manner D) Demonstrating knowledge - cORRECT sOLUTION B) Demonstrating professionalism and honesty Which one of these is NOT one of the three characteristics of a well-defined goal? A) Dollar amount B) Purpose C) Realistic D) Time frame - cORRECT sOLUTION C) Realistic Which one of these is a mismatch between a client's time horizon and stated goal? A) A client with no current savings who has a one-year-old son says that saving for her son's college education is her top priority. B) A 55-year-old client with no current retirement savings says that saving for retirement is her top priority; she plans to retire at age 65. C) A prospective client with a sizable amount of liquid assets wishes to purchase a recreational vehicle within seven years. D) A professional, age 30, begins to contribute to a Roth IRA for her retirement. - cORRECT sOLUTION B) A 55-year-old client with no current retirement savings says that saving for retirement is her top priority; she plans to retire at age 65.