SIE Understanding Products and Their Risks Practice Test 3

A. Favorable returns in good markets and bad markets

B. Closely matching the performance of the S&P 500 Index (within plus or minus 0.5 percent)

C. Closely matching the performance of the S&P 500 Index (within plus or minus 0.5 percent) and always having a positive return on a calendar year basis

D. Never having the fund's value go down from the end of one calendar quarter to the end of the next calendar quarter

A. Short selling

B. Leverage

C. Registered investment adviser

D. Arbitrage

A. An accredited investor

B. A qualified purchaser

C. An individual who has two years of income greater than $200,000 annually and reasonably expects the same level of income to continue

D. An individual who has two years of income greater than $300,000 annually and reasonably expects the same level of income to continue

A. 8.5 percent of the fund's offering price

B. Two-and-twenty

C. 12b-1 fee

D. Contingent deferred sales charge (CDSC)

A. High water mark

B. Hurdle rate

C. Withdrawal fee

D. Lock-up period

A. Choose the share class whose sales charges match one's investment horizon.

B. Know on what national exchanges the shares are traded.

C. Select one's annuitization option.

D. Match the fund's investment strategies and associated risks with one's personal investment goals, time horizons, and risk tolerance.

A. Names under which the firm does business and states in which it does business

B. Better Business Bureau rating

C. YouTube channels used for marketing services

D. Each investment adviser representative's client list

A. Use of derivatives

B. Number of years during which the fund manager has managed those types of assets

C. Calculation method for the performance fee

D. Discretion allowed the hedge fund for asset valuation

A. Mutual funds are developing momentum to become more attractive than ETFs.

B. ETFs are developing momentum to become more attractive than mutual funds.

C. ETNs are developing momentum to become more attractive than mutual funds.

D. ETNs are developing momentum to become more attractive than ETFs.

A. Commodity Futures Modernization Act of 2000

B. Investment Company Act of 1940

C. SEC Rule 6c-11 (called the ETF Rule), implemented in 2019

D. SEC approval of the Precidian ActiveShares ETF model in 2019

SIE Understanding Products and Their Risks Practice Test 3

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