Crunch Time : Chapter 6

Question 1

What should advisers ask for to make recommendations that fit a client’s individual needs?

Answer 1

Advisers should ask for a client’s age, occupation, and objectives.

Question 2

What must investment advisers obtain from their clients to fulfill their fiduciary duty?

Answer 2

Investment advisers must obtain details from their clients as to when investments will begin and end.

Question 3

Is receiving a list of investors that recently purchased an initial public offering considered acceptable soft-dollar compensation?

Answer 3

No, receiving a list of investors that recently purchased an initial public offering is not acceptable.

Question 4

What is an acceptable form of soft-dollar compensation for investment advisers?

Answer 4

Being permitted to attend an investment conference is an acceptable form of soft-dollar compensation.

Question 5

What is the Uniform Prudent Investor Act (UPIA) known for?

Answer 5

The UPIA is a key feature of modern portfolio theory with emphasis on the trade-off between a portfolio’s risk and reward.

Question 6

Does the UPIA categorically restrict any investment within a portfolio?

Answer 6

No, the UPIA doesn’t categorically restrict any investment within a portfolio.