Exam (elaborations)
AWMA Exam Actual Questions and Answers with complete solution
- Course
- Institution
AWMA Exam Actual Questions and Answers with complete solution
[Show more]
Content preview
AWMA Exam Actual Questions and Answers 2023-2024 with complete solutionWhich one of the following characteristics is more correct concerning younger wealthy individuals (millennials and GenXers)?
A) Younger wealthy individuals are seeking more technological options in financial planning.
B) Younger wealthy individuals have not experienced significant bear markets.
C) Younger wealthy individuals have directly opposite financial needs as compared to baby boomers.
D) Younger wealthy individuals likely want to be advised by one of their own generation.
Ans- A) Younger wealthy investors (millennials and GenXers) are seeking fresh approaches to financial planning, including more technological options. In addition, young clients also have been through fewer years of investing but have experienced several significant bear markets. Mod 1
One of the most important life goals of wealthy individuals is
A) protecting wealth.
B) assuring their retirement lifestyle.
C) minimizing taxes.
D) travelling the world. Ans- D) The most frequently stated life goals for wealthy individuals are having good health, travelling the world, and achieving financial success.
To achieve financial success, the most common financial goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and leaving an estate to their heirs. Mod 1
One of the most important financial goals of wealthy individuals is
A)leaving an estate to their heirs.
B)having good health.
C)none of these.
D)travelling the world. Ans- A) To achieve financial success, the most common financial goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and
leaving an estate to their heirs. The most frequently stated life goals for wealthy individuals are having good health, travelling the world, and achieving financial success.
Mod 1
Which one of the following statements is true regarding sustainable and responsible investments (SRIs)? A) Shareholder activism is a part of SRIs.
B) Baby boomers are the most likely demographic to invest in SRIs.
C) SRIs provide lower returns, but are a "feel-good" option for investors.
D) SRIs provide only a negative filter of staying away from certain assets. Ans- A) Shareholder activism also plays a part in getting companies to listen by passing shareholder resolutions. Sustainable and responsible investing has been found to be of importance to Gen Xers and millennials. Several studies have now shown taking into account ESG factors actually increases long-term returns. For SRI investments, the adviser needs to set up a series of filters to determine a client's specific wants for a sustainable fund. For instance, tobacco may be a main prohibition for one client, while religious aspects may be a positive filter for that same or another client. Mod 1
Concerning control of assets in a private foundation versus a donor-advised fund, which
one of the following aspects is true for a donor-advised fund?
A)Remains with founder's values
B) Needs lengthy IRS approval
C) Easier and less expensive to launch
D) Must pay out a certain percentage each year Ans- C) Donor-advised funds (DAFs) are growing in popularity and have the advantage of being easier and cheaper to launch
and not requiring the lengthy IRS approval that private foundations need. Values may change with a DAF, as major contributors have input into this type of charitable fund. In addition, only private foundations must make payouts each year; DAFs have flexibility with this. Mod 1
If a high net worth (HNW) business owner came to your office, what would you expect her financials to show, as compared to a HNW non-business owner?
A) About the same income, with more assets and higher net worth
B) About the same income with more assets, yet lower net worth
C) Higher income, with fewer assets and lower net worth
D) Lower income, with fewer assets and lower net worth Ans- A) Income is similar between all HNW professions; however, assets and net worth include business assets, so more assets and higher net worth are common for HNW business owners. Many business owners are exposed to a large amount of unsystematic risk because a significant amount of their capital is often tied up in their business. Mod 1
When considering the social impact goals of a high net worth client, wealth planners should expect those clients to
A)not want their planner to be involved in the charitable concern.
B)want their children to also develop charitable tendencies.
C) only want the charitable concern in order to reduce tax exposure.
D) overwhelmingly donate assets and not volunteer their time. Ans- B) The reasons high net worth individuals make charitable donations are largely humanitarian in nature —only half of these individuals donate to reduce tax exposure as a secondary concern. It is important for advisers to be aware of and research any social impact their clients find important. In addition, the preferred methods of accomplishing social impact in the U.S., as compared to worldwide, are more religious and also include more aspects that are nonfinancial, such as volunteerism. Mod 1
As compared to younger high net worth individuals, older wealthy individuals describe their financial needs as more geared toward
A)managing cash and credit.
B) digital meetings.
C)investing outside of equities.
D) obtaining and using credit. Ans- A) Older clients describe their needs as straightforward: managing cash and credit, and growing investments. Younger clients indicate more complex needs, such as a reluctance to invest in equities, interest in digital meetings, and a propensity toward using credit. Mod 1
Which one of the following top overall concerns was the same for those wealthy clients under 30 and above 60?
A)Understanding of risk tolerance
B)Fee transparency
C)Strong investment performance
D)Ensuring children's well-being Ans- C) The top wealth concerns of wealthy clients under 30 and above 60 differ greatly, but one area of agreement is wanting strong investment performance. Under-30 clients generally want efficiency and transparency—
they want to understand what is being proposed and the costs and risks involved. They also will not hesitate to go to other individuals or sources in order to better understand their options. This is not the case with a typical over-60 client, who will work with just one adviser whom they trust, and will want that adviser to have a strong understanding of their needs and risk tolerance. In addition, younger investors are more concerned with child care and older investors with obtaining advice about risk tolerance. Mod 1
The top reasons for a wealthy client to leave an adviser have been found to be in the general category of
A)poor firm notoriety.
B)high fees.
C)poor investment advice.
D) poor communication. Ans- D) The top reasons a wealthy client would leave an adviser, with the most egregious reason being first, are: not returning phone calls in a timely manner, not being proactive with contact, not providing good ideas and advice, and not returning emails in a timely manner. Mod 1
George's bonds fell in price on news of higher interest rates. To which one of the following risks are George's bonds most likely to be subject?
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Wiseman. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79650 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now