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AAMS Module (1-10) Exam Questions And Answers
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AAMS Module (1-10) Exam QuestionsAnd Answers
What are the major steps in the asset management process - correct
answer ✅1. gather data
2. establish goals
3. analyze information
4. make and implement recommendations
5. monitor
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? - correct
answer ✅This goal is not time-framed.
The acronym to remember for goal setting is SMART, which stands for
Specific, Measurable, Achievable, Relevant, and Time-Framed. The
primary flaw in this goal is that it is not time-framed. Because it is not
time-framed, it is difficult to tell if this is achievable, but it is certainly
measurable and very likely relevant.
Which one of the following is not an invested asset? - correct answer
✅180-day certificate of deposit
A certificate of deposit is a cash equivalent and therefore should be
listed under Cash and Cash Equivalents.
Victoria Gregory's financial situation is as follows:
Cash/cash EquivalentsL $15,000
,AAMS Module (1-10) Exam Questions
And Answers
Short Term debts: $23,000
LTDs: $140,000
Taxes: $8000
Invested Assets: $45,000
Use Assets: $192,000
What is her net worth? - correct answer ✅$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 and its major components? - correct answer ✅The income
statement indicates, for a certain period of time, an individual's cash
inflows and outflows. Its components include gross income, expenses,
and surplus or deficit.
The income statement describes cash flow for a period of time and
contains the components of gross income, from which expenses are
subtracted to determine the surplus or deficit.
All of the following provide a clearer picture of the client's needs -
correct answer ✅1. anticipated retirement lifestyle
2. bad experiences w/ particular investments
,AAMS Module (1-10) Exam Questions
And Answers
3. succession planning in place, if any, for a client involved in ownership
of small business
Which one of the following is considered a "foundation" goal? - correct
answer ✅emergency fund
An emergency fund is a "foundation" goal because it is an essential goal
for survival in the event of a dramatic life event.
Which one of the following is the better written financial goal? - correct
answer ✅to accumulate $15,000 for a boat purchase in two years
This goal is well written because it contains a specific dollar amount and
a specific time frame.
When analyzing information gathered from a client, which of the
following are important factors to look for? - correct answer ✅1.
mismatches between the current investment position or resources and
stated goals.
This is an important factor in the analysis step. Any mismatches
between the client's goals and the investment vehicles used to attain
those goals should be highlighted.
2. the validity of the client's stated goals.
This is an important factor in the analysis step. If the client's goals are
unrealistic, this problem needs to be addressed immediately.
, AAMS Module (1-10) Exam Questions
And Answers
3. tax problems that might be ameliorated through investment
planning.
This is an important factor in the analysis step. Potential tax problems
should be addressed as part of the investment strategy.
Marcia Simpson has analyzed her client's situation and has concluded
that her client will come short of attaining the amount of capital he
would like to have by the time he plans to retire. The client is a low risk
taker and will have limited funds for future periodic investments. Before
making a recommendation, Marcia should do which one of the
following? - correct answer ✅Discuss the problem and ask the client to
clarify how he wishes to adjust his accumulation goal, risk level, or
periodic investments.
After being informed of the various constraints, implications of their
decisions, and other options they have, the client can choose to make
adjustments with which he is comfortable.
Which of the following is a matter that needs to be clarified before
making investment recommendations? - correct answer ✅1. client's
goals
2. risk parameters of the client
3. time horizons of the goals
Four main attributes of a good business plan - correct answer ✅1.
written and shared with someone who has an interest in your success
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