Preview Questions Wealth Manager | Role Specific Skill

Question 1: What is the best strategy for mitigating estate taxes for high-net-worth clients with large estates?

Which action should you take?

Choose only one option

Establishing a grantor retained annuity trust (GRAT)

Investing solely in municipal bonds for tax-free income

Creating a dynasty trust to transfer assets to multiple generations

Converting traditional IRAs to Roth IRAs to avoid taxes

Question 2: What is the most suitable investment strategy for a client who is expecting a major financial windfall in the near future?

Which action should you take?

Choose only one option

Long-term buy-and-hold strategy focusing on real estate

Speculative, high-risk hedge fund strategy

Aggressive growth strategy with concentrated stock positions

A conservative, tax-efficient strategy with liquidity in mind

Question 3: What is the benefit of tactical asset allocation (TAA) in comparison to strategic asset allocation (SAA) for wealth management?

Which action should you take?

Choose only one option

It is more stable and less dependent on market conditions

It allows for short-term adjustments based on market conditions

It guarantees higher long-term returns

It focuses exclusively on passive investment strategies

Question 4: What is the main purpose of using options and derivatives in an investment strategy?

Which action should you take?

Choose only one option

To increase the risk profile and generate higher returns

To focus on maximizing short-term returns in a volatile market

To avoid market exposure by creating non-traditional investments

To hedge risk, generate income, or gain exposure to specific asset classes

Question 5: What is the benefit of using a spousal lifetime access trust (SLAT) in estate planning?

Which action should you take?

Choose only one option

It allows one spouse to make gifts to the other spouse, reducing the estate of the donor while maintaining indirect access to assets

It provides unlimited gifting rights to the surviving spouse

It ensures that assets are excluded from estate tax and remain available for future heirs

It eliminates any estate taxes when the first spouse dies

Question 6: Which strategy would be most effective for minimizing the tax impact of dividends in a taxable account?

Which action should you take?

Choose only one option

Concentrating on high-growth stocks that do not pay dividends

Investing in tax-efficient funds that focus on qualified dividends

Avoiding stocks entirely and investing in real estate to eliminate dividends

Investing in high-yield bonds that generate taxable interest income