SIE Understanding Products and Their Risks Practice Test 2

1. What is the exposure of the writer of an uncovered (naked or short) call option?

2. Which of the following is a similarity between a mutual fund and a closed-end investment company?

3. Which of the following mutual fund share class would be expected to have the highest cumulative sales charge, considering the longest reasonably possible investment horizon?

4. Which of the following is common to a unit investment trust (UIT) and mutual funds?

5. Which of the following is common to mutual funds and municipal fund securities?

6. Which of the following is considered a municipal fund security?

7. Which of the following is a tax benefit of the investment structure of direct participation programs (DPPs)?

8. Which of the following is common to both limited partnerships and tenant in common (TIC) transactions?

9. Which of the following is a requirement of real estate investment trusts (REITs) in order to avoid double taxation on dividends?

10. Which type of REIT has the broadest range of cash flow types?