M-206 || All Answers are Flawless.
Duty of Care correct answers Requires a board if director to act in a reasonable and informed
manner when participating in the Boards decisions and its oversight of the day to day operations
Duty of Loyalty correct answers Requires the Director to exercise power in good faith and in
best interest of the community rather than the directors own interest of the interest of another
person or entity.
Identify budget line items correct answers Obligation, need, expectation
Types of budget line items correct answers Mandatory, discretionary
Contingency planning rule of thumb minimum correct answers 2-5%
Contingency planning rule of thumb very good correct answers 10-15%
Historical trend budgeting correct answers Estimates line items based on past trends
Zero based budgeting correct answers Budgeting that ignores historical budgetary allocations
and identifies the cost that are necessary to implement agreed strategies- verified need for a
budgeted line item
RxQxTxN correct answers Ratexquantityxtimexnumber
Basis in estimating individual line items for zero based budgeted correct answers Rate, quantity,
time, number
Two parts of reserve study correct answers Physical and financial analysis
, Baseline funding correct answers Reserve funding goal of keeping the reserve cash balance
above zero
Full funding correct answers 100% funded
Threshold funding correct answers Keeping the reserve balance above a specified dollar or
precent funded amount
Statutory funding correct answers Method based on local statutes
The concept of basic investment principles correct answers The board of directors, supported
with the advice of the manager, has a fiduciary responsibility to all unit owners to make sure
reserve funds are invested properly
Investment concepts - safety correct answers The likelihood that anticipated income from an
investment will continue to be paid in the amount expected and at the time expected
Investment concepts - liquidity correct answers Liquid investments can be converted quickly into
cash for emergency use or investment opportunities
Investment concepts - yield correct answers The return received in the investment
Investment concept -Laddering correct answers Structuring investments so they mature in
successive years.
Suitable investments instruments for association reserves correct answers CDs, money market
accounts and funds
Mandatory expense shared equally by employer and employee correct answers FICA/social
security
Duty of Care correct answers Requires a board if director to act in a reasonable and informed
manner when participating in the Boards decisions and its oversight of the day to day operations
Duty of Loyalty correct answers Requires the Director to exercise power in good faith and in
best interest of the community rather than the directors own interest of the interest of another
person or entity.
Identify budget line items correct answers Obligation, need, expectation
Types of budget line items correct answers Mandatory, discretionary
Contingency planning rule of thumb minimum correct answers 2-5%
Contingency planning rule of thumb very good correct answers 10-15%
Historical trend budgeting correct answers Estimates line items based on past trends
Zero based budgeting correct answers Budgeting that ignores historical budgetary allocations
and identifies the cost that are necessary to implement agreed strategies- verified need for a
budgeted line item
RxQxTxN correct answers Ratexquantityxtimexnumber
Basis in estimating individual line items for zero based budgeted correct answers Rate, quantity,
time, number
Two parts of reserve study correct answers Physical and financial analysis
, Baseline funding correct answers Reserve funding goal of keeping the reserve cash balance
above zero
Full funding correct answers 100% funded
Threshold funding correct answers Keeping the reserve balance above a specified dollar or
precent funded amount
Statutory funding correct answers Method based on local statutes
The concept of basic investment principles correct answers The board of directors, supported
with the advice of the manager, has a fiduciary responsibility to all unit owners to make sure
reserve funds are invested properly
Investment concepts - safety correct answers The likelihood that anticipated income from an
investment will continue to be paid in the amount expected and at the time expected
Investment concepts - liquidity correct answers Liquid investments can be converted quickly into
cash for emergency use or investment opportunities
Investment concepts - yield correct answers The return received in the investment
Investment concept -Laddering correct answers Structuring investments so they mature in
successive years.
Suitable investments instruments for association reserves correct answers CDs, money market
accounts and funds
Mandatory expense shared equally by employer and employee correct answers FICA/social
security
