STC Series 66 questions pt 2 Questions with 100%
Correct Answers
Which of the following is a measure of non-systematic
risk?
A. Alpha
B. Theta
C. Gamma
D. Beta Correct Answer: A. Alpha
Alpha is a way to measure risk that's association with a
single investment, which is better known as non-
systematic risk. On the other hand, systematic risk is
associated with all investments and is measured by
beta. Gamma and theta are both risk measurements,
but they're specific to option contracts. (
When are fees assessed on no-load mutual fund shares?
,A. Annually
B. When the shares are redeemed
C. Quarterly
D. When the shares are purchased Correct Answer: A.
Annually
No-load funds cannot assess a front-end or back-end
sales charge. This means that investors don't pay sales
charges when they purchase or redeem shares.
However, no-load funds may charge a 12b-1 fee up to
0.25% of the assets under management. In most cases,
12b-1 fees are assessed annually, which is when investors
must pay them.
Which of the following statements regarding the
differences between an annual rebalancing strategy
and a buy-and-hold strategy over a 30-year period is
FALSE?
,A. The buy and hold strategy is easier to manage than a
rebalancing strategy
B. The tax and transactions costs will be lower with a buy
and hold strategy
C. The risk in a buy and hold strategy portfolio will match
the investor's risk tolerance
D. The equity portion in a buy and hold portfolio could
grow in relation to the fixed-income portion, whereas a
rebalanced portfolio will remain balanced every year
Correct Answer: C. The risk in a buy and hold strategy
portfolio will match the investor's risk tolerance
The risk levels in a buy and hold portfolio will rise and fall,
while a rebalanced portfolio will be adjusted
periodically to meet the investor's risk tolerance.
Rebalanced portfolios will also attempt to maintain the
percentage of equity and debt in the portfolio, while
buy and hold portfolios will allow the percentages to
, drift. One of the advantages of a buy and hold strategy
is that transaction and tax expenses are minimized since
there is generally no continuous buying and selling.
Which of the following is TRUE of a Qualified Domestic
Relations Order (QDRO)?
A. QDRO is a court order that provides an alternative
payee the right to receive all or a portion of the benefits
that are payable to a participant under a qualified
retirement plan
B. A QDRO is a court order that requires one person
involved in a divorce to provide for the payment of
alimony or child support
C. A QDRO is a court order that divides all jointly held
property in the event of a divorce
D. A QDRO is a court order that provides an alternative
payee the right to receive all or a portion of the benefits
that are payable to a participant under a non-qualified
retirement plan Correct Answer: A. QDRO is a court
Correct Answers
Which of the following is a measure of non-systematic
risk?
A. Alpha
B. Theta
C. Gamma
D. Beta Correct Answer: A. Alpha
Alpha is a way to measure risk that's association with a
single investment, which is better known as non-
systematic risk. On the other hand, systematic risk is
associated with all investments and is measured by
beta. Gamma and theta are both risk measurements,
but they're specific to option contracts. (
When are fees assessed on no-load mutual fund shares?
,A. Annually
B. When the shares are redeemed
C. Quarterly
D. When the shares are purchased Correct Answer: A.
Annually
No-load funds cannot assess a front-end or back-end
sales charge. This means that investors don't pay sales
charges when they purchase or redeem shares.
However, no-load funds may charge a 12b-1 fee up to
0.25% of the assets under management. In most cases,
12b-1 fees are assessed annually, which is when investors
must pay them.
Which of the following statements regarding the
differences between an annual rebalancing strategy
and a buy-and-hold strategy over a 30-year period is
FALSE?
,A. The buy and hold strategy is easier to manage than a
rebalancing strategy
B. The tax and transactions costs will be lower with a buy
and hold strategy
C. The risk in a buy and hold strategy portfolio will match
the investor's risk tolerance
D. The equity portion in a buy and hold portfolio could
grow in relation to the fixed-income portion, whereas a
rebalanced portfolio will remain balanced every year
Correct Answer: C. The risk in a buy and hold strategy
portfolio will match the investor's risk tolerance
The risk levels in a buy and hold portfolio will rise and fall,
while a rebalanced portfolio will be adjusted
periodically to meet the investor's risk tolerance.
Rebalanced portfolios will also attempt to maintain the
percentage of equity and debt in the portfolio, while
buy and hold portfolios will allow the percentages to
, drift. One of the advantages of a buy and hold strategy
is that transaction and tax expenses are minimized since
there is generally no continuous buying and selling.
Which of the following is TRUE of a Qualified Domestic
Relations Order (QDRO)?
A. QDRO is a court order that provides an alternative
payee the right to receive all or a portion of the benefits
that are payable to a participant under a qualified
retirement plan
B. A QDRO is a court order that requires one person
involved in a divorce to provide for the payment of
alimony or child support
C. A QDRO is a court order that divides all jointly held
property in the event of a divorce
D. A QDRO is a court order that provides an alternative
payee the right to receive all or a portion of the benefits
that are payable to a participant under a non-qualified
retirement plan Correct Answer: A. QDRO is a court
