Seg Mock Exam 3 Latest Update Already Passed

Seg Mock Exam 3 Latest Update Already Passed Julie is heavily invested in an equity mutual fund. Her financial advisor tells her about the risks she faces with her investment. What are the risks associated with Julie's investment? a) Market risk and industry risk b) Market risk and credit risk c) Interest-rate risk and credit risk d) Interest-rate risk and inflation risk (wrong) Market risk and credit risk Rationale: The risks associated with investing in equity investments are market risk and industry risk. (Refer to Section 1.3.7.5) Stan owns a mutual fund investment which currently holds $200,000. He plans to set up a systematic withdrawal plan of 5% of the balance per year. His wife, Jen, owns a segregated fund with the same value. She has a Guaranteed Minimum Withdrawal Benefit (GMWB) rider which guarantees a withdrawal of 5% for 20 years. What is the advantage of Jen's GMWB rider over Stan's systematic withdrawal plan? a) Jen is guaranteed a GMWB payment of a minimum of $10,000 for 20 years, provided she does not make any withdrawals from her account. b) The GMWB payout amount is recalculated every year. c) The GMWB payments of $10,000 a year will increase if she makes withdrawals from her account. d) The GMWB is the same as his systematic withdrawal plan. (correct) Jen is guaranteed a GMWB payment of a minimum of $10,000 for 20 years, provided she does not make any withdrawals from her account. Rationale: The GMWB is a guaranteed amount that the investor will receive during the period stated in the contract (e.g., 20 years). Extra withdrawals exceeding the guaranteed amount will reduce the future guaranteed income. The GMWB may be reset every three years if the market value of the contract has increased and additional withdrawals have not been made. The amount received from Stan's systematic withdrawal plan will fluctuate depending upon the market value of the fund. (Refer to Section 2.1.4.0) Nadia is meeting with her clients to implement the segregated funds recommendation that she made to them last week. During their last appointment, she gathered their financial information, and based on the information that her clients shared, she made a recommendation. Nadia has explained the benefits of segregated funds as well as the risks. She is now meeting with them to complete their application and get their signatures. Which step has Nadia forgotten to go through