Supplemental exam 3 Flashcards
A yield curve represents the return on bonds of:
A similar credit quality across a range of maturities
What ratio measures the amount that an investor pays for one dollar of a company’s profits?
The PE ratio
An investment program in which investors have the opportunity to share in the income, gains, losses, deductions, and tax credits of the business entity is referred to as a:
Limited partnership
How are TIPS taxed?
Both the interest and principal adjustment are taxable in the year in which they occur
An IAR is discussing investment strategies with an investor who prefers capital gains over dividends. The IAR should recommend an investment in a company that has a:
Low dividend payout ratio
What are features of variable universal life insurance policies?
Flexible premiums, variable rate of return, variable death benefits
If a stock is being valued by finding the present value of futures dividends, this is referred to as:
The Dividend Discount Model
Which theory argues that future securities price movements are independent of historical price movements?
The Random Walk Theory
Price to book value is the ratio of a stocks price per share relative to the:
Per share value of total assets
Which of the following is an advantage to buying an annuity?
Earnings grow on a tax deferred basis
