CE ExAMS jULy / AUGUST 2022
From “ Fees , Not Fines ,” page 20 1 . In his book , The Psychology of Money , Morgan Housel says ___ is the price of market returns . A . Market volatility
C . More trading
B . Diversification
D . None of the above
2 . When the markets are unsettled , you should _____. A . Increase your outreach to clients B . Cut your fees C . Seek new business D . All of the above
From “ 3 Things To Know When Advising Private Foundations ,” page 25
3 . As a foundation grows , keep the following in mind : A . Its need for an audit B . Its need for an increase in its geographic reach C . Its tech stack D . All of the above
4 . When foundations are getting more complex , what is not on their founders ’ minds ? A . Deciding whether to give away all assets now . B . Working to ensure family harmony . C . Considering the pursuit of charitable endeavors beyond grants . D . They have to make sure tax and compliance administration is aligned .
From “ Goodbye To All That , FA ’ s RIA Survey & Ranking ,” page 35
5 . __________ is the biggest cost for RIA firms , representing 75 % to 80 % of expenses . A . Real estate
C . Marketing
B . Technology
D . Human capital
6 . Philip Palaveev of the Ensemble Practice says that ___ is / are a good way to help determine how much employees are worth in an industry . A . Staff turnover B . Outside studies C . Private equity valuation D . None of the above
From “ ESG — What ’ s the Real Impact ?,” page 58
7 . Companies that are not sustainability minded will need to reward investors with ________. A . Better returns B . More value C . A risk premium D . None of the above
8 . Since non-sustainable companies come with increased risk , it could be _____ may be closer to those of ESG investments . A . Long-term risk-adjusted returns B . Long-term returns C . Short-term returns D . Valuations
From “ Rethinking The 4 % Rule ,” page 64 9 . Nearly ___ years ago , ____ developed the 4 % rule .
A . 30 , William Bengen C . 60 , Benjamin Graham
B . 50 , Harry Markowitz
D . 30 , William Sharpe
10 . Another problem with the 4 % rule is that it doesn ’ t help you account for ___________ . A . Healthcare emergencies C . Troubled grandchildren B . Bucket-list trips
D . All of the above
From “ Fees , Not Fines ,” page 20 1 . According to a Nerd ’ s Eye View blog , advisors ’ self-worth clearly starts to decline as their clients pass ______ in net worth . A . $ 500,000
C . $ 1.5 million
B . $ 1 million
D . $ 2.5 million
2 . What should be less of a concern for clients during market drops ? A . The clients ’ kids ’ wealth , since kids have a longer investment time horizon B . Philanthropy , since clients will give less C . The 4 % rule , since it allows for market fluctuations D . None of the above
From “ 3 Things To Know When Advising Private Foundations ,” page 25
3 . ______ of U . S . foundations have assets of $ 10 million or less . A . 50 % C . 90 % B . 80 % D . 95 %
4 . Those entities with more than $ 50 million make up ____ of all foundations . A . 10 % C . Less than 3 % B . More than 20 % D . 5 %
From “ Goodbye To All That , FA ’ s RIA Survey & Ranking ,” page 35
5 . This year ’ s RIA survey says _____ of the top 100 firms have institutional ownership . A . 25 % C . 33 % B . 28 % D . 42 %
6 . According to DeVoe & Co , RIA Sellers with less than $ 1 billion in AUM made up ____ of all transactions for the first quarter . A . 55 % C . 70 % B . 65 % D . 80 %
From “ ESG — What ’ s the Real Impact ?,” page 58
7 . In their book on ESG , Larry Swedroe and Samuel Adams say ESG investors should expect _____. A . Lower long-term returns , but higher returns at first B . Higher long-term returns , but lower initial returns C . A higher cost of capital D . Higher risk
8 . What , according to Swedroe and Adams , happens to impact investments amid high investor demand ? A . Stock prices go down while cost of capital goes up B . Stock prices go down , while cost of capital is lowered C . Stock prices fall and cost of capital falls D . Stock prices rise and cost of capital rises
From “ Rethinking The 4 % Rule ,” page 64
9 . What ’ s one of the cases against the 4 % rule for retirement withdrawals ? A . It ’ s based on backward-looking data . B . The market is tanking . C . Interest rates are rising . D . None of the above .
10 . Mallon FitzPatrick at Robertson Stephens says combining withdrawals from taxable accounts and tax-deferred accounts such as IRAs and Roths ____ . A . Keeps you from needing annuities B . Can keep taxable income in the lower brackets C . Helps you time the market D . Keeps you from turning to a reverse mortgage
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