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AAMS Practice Exam Questions and Answers (100% Pass)
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AAMS Practice Exam Questions and Answers (100% Pass) An employer plans to use corporate-owned life insurance to informally fund a nonqualified deferred compensation agreement and wants flexibility regarding investment choices. Which one of the following types of life insurance should this emplo...

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  • August 27, 2024
  • 18
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • aams practice exam questions and answers 100 pas

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  • AAMS
  • AAMS

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©SOPHIABENNETT@2024-2025 Monday, August 19, 2024 12:35 AM

AAMS Practice Exam Questions and Answers (100% Pass)


An employer plans to use corporate-owned life insurance to informally
fund a nonqualified deferred compensation agreement and wants
flexibility regarding investment choices. Which one of the following types
of life insurance should this employer choose? - Answer✔️✔️-Variable life
insurance

The latest economic reports have been gloomy, and the stock market is in a
protracted slump. Most of your regular stock customers are selling out
their positions. A new client, Mr. Jones, sees these conditions as a buying
opportunity. You would define his investment personality as - Answer✔️✔️-
contrarian

As of December 31, 20X1, Bob Larkin has the following financial data:



Bond fund $17,000

Residence$400,000

Vested 401(k) plan$95,000

Auto notes$16,000

Residence mortgage$285,000

Auto payments$7,000

Automobiles$45,000


Page 1 of 18

,©SOPHIABENNETT@2024-2025 Monday, August 19, 2024 12:35 AM

Checking account$8,000

Utilities$4,000

CD$15,000

Stock$125,000

Home equity loan$40,000



What is Bob's net worth? - Answer✔️✔️-$364,000



Assets = $17,000 + $400,000 + $95,000 +$45,000 + $8,000 + $15,000 +
$125,000 = $705,000. Liabilities = $16,000 + $285,000 + $40,000 = $341,000, so
net worth is $364,000. Notice that auto notes of $16,000 are included in this
calculation, but auto payments of $7,000 is a cash flow item and therefore
not included.

For the year ending December 31, 20X2, Ted Jones has the following
financial information:



Salaries$70,000

Auto payments$5,000

Insurance$3,800

Food$8,000

Page 2 of 18

, ©SOPHIABENNETT@2024-2025 Monday, August 19, 2024 12:35 AM

Credit card balance$10,000

Dividends$1,100

Utilities$3,500

Mortgage payments$14,000

Taxes$13,000

Clothing$9,000

Interest income$2,100

Checking account$4,000

Vacations$8,400

Donations$5,800



What is the surplus or (deficit) for Ted? - Answer✔️✔️-$2,700



Income = $70,000 + $1,100 + $2,100 = $73,200. Expenses = $5,000 + $3,800 +
$8,000 + $3,500 + $14,000 + $13,000 + $9,000 + $8,400 + $5,800 = $70,500, so
there is a surplus of $2,700

Which one of the following statements comparing the suitability and
fiduciary standards is correct? - Answer✔️✔️-Legally, suitability disputes
are often resolved in arbitration whereas fiduciary disputes are ultimately
resolved in the courts.

Page 3 of 18

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