WEL Mock Flags

Question 1

UIT can or cannot trade during market hours?

Answer 1

Cannot

Question 2

Is land impacted by changing microeconomic or macroeconomic conditions more?

Answer 2

Micro

Question 3

Investors choosing to utilize smart beta strategies choose managers who apply various factors to capture what?

Answer 3

Capture inaccuracies in pricing.

Question 4

A developed market nation has a currency that has increased relative to foreign currencies in countries that typically engage in trade. The trend is expected to continue for a few years. The indirect consequence of the increase may be: (in relation to local economies in emerging markets)

Answer 4

Weakening local economies in emerging markets.

Question 5

The portfolio management methodology exhibited by rebalancing is

Buy/sell strategy

Answer 5

Buy low, sell high.

Question 6

Low volatility’s correlation with low risk?

Answer 6

Low volatility does not have a correlation with low risk.

Question 7

Embracing the Fama and French model means rejecting what theory or hypothesis?

Answer 7

The weak form of the Efficient Market Hypothesis.

Question 8

A consultant utilizing risk-adjusted measures would like to see a measure that demonstrates a manager’s value to the investor relative to other funds during a secular bear market. He should be inclined to look at what measurement?

Answer 8

Jensen’s alpha.

Question 9

A disadvantage of using holdings based attribution analysis is that it will (in relation to return)?

Answer 9

Will not reconcile to performance return.

Question 10

A magazine specializing in the hedge fund industry publishes a guide to selecting liquid and illiquid hedge funds. Among the differences, illiquid funds have higher or lower layering fees?

Answer 10

Lower

Question 11

A fund seeks to profit from mergers in stocks they hold to suitors, both domestic and international. Funds seeking out strategies like these are called ________ funds in the investing community.

Answer 11

Event-driven

Question 12

An investor is worried about the impact of a company announcement on a security. In order to delay the tax ramifications of the sale until the new year, what is the best strategy?

Answer 12

Engage in a collar strategy.

Question 13

Would treasury rates be useful to investors who are considering long-term investments in emerging markets?

Answer 13

No

Question 14

Dow Theory tenets are correctly explained by acknowledging that: (in terms of retracement)

Answer 14

Medium swings retrace movement.

Question 15

After hearing about Modern Portfolio Theory (MPT), a consultant concludes optimization can lead to (in relation to return and risk):

Answer 15

Optimization can lead to higher return for a lower level of risk.

Question 16

Overconfidence can lead an investor to take which action (in relation to information processing):

Answer 16

Overconfidence generally causes investors to ignore negative information when they feel confident in a specific investment.

Question 17

A consultant working with a longtime client suggests that the client should review their tendencies and see whether perhaps they are overestimating their risk tolerance threshold. The consultant believes that the client is:

Answer 17

The correct answer is a follower.

Question 18

A consultant reviewing future progress of the manager during a search would or would not review capital market expectations?

Answer 18

Would not

Question 19

During manager search and selection, would experience of manager be received before or after screening criteria?

Answer 19

After

Question 20

When evaluating UMIFA and UPMIFA standards, which of the following is true?
A) UMIFA provides stronger guidance on rules for fiduciary care than UPMIFA.
B) UPMIFA provides stronger guidance on rules for fiduciary care than UMIFA.
C) UMIFA and UPMIFA rules are identical, but apply to different entities.
D) Only UMIFA standards are used in courts of law.

Answer 20

B) UPMIFA provides stronger guidance on rules for fiduciary care than UMIFA.

Question 21

FINRA guidelines and rules were specifically created to apply to:
A) registered investment advisors.
B) registered representatives.
C) investment advisor representatives.
D) Investment portfolio managers using discretion

Answer 21

B) registered representatives.