Investment Vehicle Flashcards
6 cards from real RIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Vehicle flashcards as text
Which of the following is a characteristic of a hedge fund?
Answer: Uses strategies like leverage and short selling
Hedge funds use sophisticated strategies including leverage, derivatives, and short selling, typically available only to accredited investors.
The Net Asset Value (NAV) of a mutual fund is calculated as:
Answer: Total assets minus total liabilities, divided by shares outstanding
NAV = (Total Assets - Total Liabilities) / Shares Outstanding, calculated daily after market close.
529 college savings plans offer which primary tax benefit?
Answer: Tax-free growth and withdrawals for qualified education expenses
529 plans offer tax-free growth and tax-free withdrawals when used for qualified education expenses.
Which type of bond is backed by the full faith and credit of the U.S. government?
Answer: Treasury bonds
U.S. Treasury bonds are backed by the full faith and credit of the federal government, making them the safest bonds.
An Exchange-Traded Fund (ETF) differs from a mutual fund primarily because ETFs:
Answer: Trade intraday on exchanges at market prices
ETFs trade throughout the day on exchanges like stocks, while mutual funds price only once daily at NAV.
A limited partnership interest in a real estate LP is considered:
Answer: A security subject to registration requirements
Limited partnership interests are securities subject to federal and state registration requirements under the Securities Act.
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