What is the primary fiduciary duty of a Registered Investment Advisor?
RIAs are required to act in the best interests of their clients at all times.
Which of the following best describes a 'fee-only' RIA?
Fee-only RIAs are compensated solely by client fees, reducing potential conflicts of interest.
What is the purpose of the ADV Part 2 form?
ADV Part 2 provides disclosure about an advisor's services, fees, and disciplinary history.
Which regulation primarily governs Registered Investment Advisors?
The Investment Advisers Act of 1940 establishes the fiduciary responsibilities of RIAs.
What is the main advantage of diversification in a client’s portfolio?
Diversification reduces unsystematic risk by spreading investments across various assets.
Which account type offers tax-deferred growth and is often used for retirement?
Traditional IRAs allow investments to grow tax-deferred until withdrawal.
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Which of the following is considered a liquid asset?
Liquid assets can be quickly converted into cash with minimal loss in value.
What does a high beta value indicate about a stock?
A high beta means the stock is more volatile than the market.
What is an ETF?
Exchange-Traded Funds are investment funds traded on stock exchanges, combining features of mutual funds and stocks.