Question 1

If your client is not knowledgeable about the market, you should ____ versus comparable portfolios.

		increase the frequency of trading
		increase the risk of the portfolio
		decrease your time with the client
		decrease the risk of the portfolio

Question 2

Which of the following is FALSE?

		the benchmark chosen must be investable
		the benchmark most be chosen in advance
		the benchmark must match the portfolio allocation
		the benchmark must be used over short time period

Question 3

It is appropriate for a financial planner to assess the ethic or cultural background of a client when creating the portfolio.

		True
		False

Question 4

Which is a harder condition to meet: prudent man or prudent expert?

		prudent man
		prudent expert
		they are the same

Question 5

An investor assumes her income will stay the approximately same over the next five years. If she carries higher personal debt levels in period one, she will have

		higher future consumption in period two
		steady future consumption in period two
		lower future consumption in period two

Question 6

Which of the following is NOT a common portfolio mistake?

		Investors tend to rebalance unevenly
		Investors tend to overestimate the cost of retirement
		Investors tend to compare the assets within a portfolio
		Investors wait to long to start investing

Question 7

A fiduciary must allow an investor to be undiversified if the investor chooses to be.

		True
		False
		Maybe but only if it is well documented that the fiduciary told the investor the portfolio is not diversified and the investor accepted the additional risk

Question 8

Which of the following is NOT a common portfolio management mistake?

		underestimating the cost of retirement
		not saving enough when earning a good income
		starting to save too late
		viewing all assets as a basket and willing to shift risk between accounts

Question 9

A Value Line ranking of ____ is a good indicator of one-year performance.

		1
		5
		1 and 5
		1 or 5

Question 10

Which of the following is correct?

		Efficiency means that investors wont earn profits for an extended period of time.
		Efficiency means that investors wont earn normal profits for an extended period of time.
		Efficiency means that investors wont earn abnormal profits for an extended period of time.
		Efficiency means all three things listed above.