SIE Exam: Understanding Products and Their Risks Practice Test 8

A. The limited partnership may have no limited partner.

B. A limited partner generally participates in management decisions.

C. A limited partner may have its ownership interest reduced if it fails to meet a capital call.

D. An action of a limited partner may result in it taking on up to ten percent additional risk.

A. One intention is to delay payment of realized capital gains tax.

B. Section 1031 requires the identification of candidate replacement properties within thirty days of the sale.

C. Section 1031 requires the purchase of the replacement property within one year of the sale.

D. Section 1031 exchanges are not valuable, when compared with the activity involved in complying.

A. It will be a full-recourse mortgage for all participants who sign.

B. Only participants with ten percent or more participation will sign.

C. All participants sign the mortgage.

D. The mortgage is a standard form, with no deviation for individual circumstances.

A. Both file a Certificate of Limited Partnership with the state.

B. Both allow ownership interest transfer with permission of the general partner.

C. Both involve no personal liability.

D. Both provide the pass-through tax advantage.

A. In a real estate limited partnership, each limited partner must contribute at least one percent of the total capital.

B. In both a limited partnership and a Tenant in Common arrangement, all participants provide a guarantee on every loan.

C. For limited partnerships, the IRS code limits the pass-through tax effects to fifty percent of the total financial results.

D. For a TIC, the transaction must be completed in no more than 180 days.

A. REITs are covered by the FINRA Rule 2310 definition of Direct Participation Programs.

B. The Securities Act of 1933 defines REITs.

C. The Investment Company Act of 1940 defines REITs.

D. Under the Internal Revenue Code, REITs' earnings are taxed twice.

A. Hybrid REITs

B. Equity REITs

C. Mortgage REITs

D. Hybrid and Equity REITs

A. It was formed in 1987, after the 1986 tax act had reduced real estate opportunities.

B. It was formed in 2008, after the 2007 real estate bubble burst.

C. It was formed in 2018, as the economy was beginning to expand.

D. It was formed in 2021, after the COVID pandemic reduced real estate activity.

A. The IPA is devoted to the real estate industry.

B. The IPA promotes Portfolio Diversifying Investments (PDI).

C. The IPA promotes maintaining a stable business environment with limited change in regulation.

D. The IPA works in the private sector, without significant communication outside its membership.

A. All hedge funds are very similar.

B. Hedge funds generally avoid borrowing to purchase assets.

C. Hedge fund is another name for a mutual fund.

D. Hedge funds generally have a goal of "absolute return."