Kaplan Test Questions

Question 1

Which of the following describes unsystematic risk?

A)It is related to market forces and can be diversified away.
B)It is specific to an investment and cannot be diversified away.
C)It is related to market forces and cannot be diversified away.
D)It is specific to an investment and can be diversified away.

Answer 1

D)It is specific to an investment and can be diversified away.

Question 2

A client asks her investment adviser representative what footnotes to the financial statements are for. The best reply would be that footnotes

A)serve as a bibliography indicating where additional information may be obtained.
B)contain information that doesn’t have a place in the main body of the financial statements.
C)contain a detailed history of the enterprise and its products or services.
D)are used to explain how the various ratios are computed because companies recognize that many shareholders do not have a financial background.

Answer 2

B)contain information that doesn’t have a place in the main body of the financial statements.

Question 3

Halethorpe has had a difficult time passing the Series 66 examination. He just tried again and failed for the fourth time. He will be eligible to try again in

A)90 days.
B)180 days.
C)30 days.
D)6 months.

Answer 3

180 Days, NOT 6 months. Remember 360 day year

Question 4

Of the following securities, which is most commonly recommended to fund a child’s college education?

A)Zero-coupon Treasury bonds
B)Treasury bills
C)Investment-grade corporate bonds
D)Municipal bonds

Answer 4

A)Zero-coupon Treasury bonds