投资学第7版Test Bank答案26(3)

A) tax shelter

B) defined contribution plan

C) personal trust

D) fixed annuity

E) Keogh plan

Answer: C Difficulty: Easy

Rationale: Personal trusts are to be managed for the benefit of the beneficiary.

Managers of these trusts often have relatively high risk aversion for the trust's portfolio.

34. Professional financial planners should

A) assess their client's risk and return requirements on a one-time basis.

B) explain the investment plan to the client.

C) inform the client about the outcome of the plan.

D) A, B, and C

E) B and C

Answer: E Difficulty: Easy

Rationale: They should assess risk and return requirements on an ongoing basis as their

clients advance through the life cycle and their needs change.

35. Deferral of capital gains tax

I) means that the investor doesn't need to pay taxes until the investment is sold. II) allows the investment to grow at a faster rate.

III) means that you might escape the capital gains tax if you live long enough.

IV) provides a tax shelter for investors.

A) II and III

B) I, II, IV

C) I, III, and V

D) II, III, and IV

Answer: B Difficulty: Easy

Rationale: The only incorrect response is III. Capital gains tax will have to be paid

eventually when the assets are sold.

投资学第7版Test Bank答案

36. Which of the following investments does not allow the investor to choose how to

allocate assets?

A) Variable Life insurance policies

B) Keogh plans

C) personal funds

D) tax qualified defined contribution plans

E) Universal Life policies

Answer: E Difficulty: Moderate

Rationale: Universal Life policies are managed by the insurance company, whose

portfolio managers make the decisions about asset allocation.

37. Pension funds

I) accept contributions from employers, which are tax-deductible.

II) pay distributions that are taxed as ordinary income.

III) pay benefits only from the income component of the fund.

IV) accept contributions from employees, which are not tax-deductible.

A) I and IV

B) II and III

C) I and II

D) I, II, and IV

E) I, II, III, and IV

Answer: C Difficulty: Moderate

Rationale: The funds aren't limited to using only the income component for payouts and

employees' contributions are tax deductible.

Use the following to answer questions 38-41:

Stephanie Watson is 23 years old and has accumulated $4,000 in her self-directed defined contribution pension plan. Each year she contributes $2,000 to the plan and her employer contributes an equal amount. Stephanie thinks she will retire at age 67 and figures she will live to age 81. The plan allows for two types of investments. One offers a 3.5% risk-free real rate of return. The other offers an expected return of 10% and has a standard deviation of 23%. Stephanie now has 5% of her money in the risk-free investment and 95% in the risky investment. She plans to continue saving at the same rate and keep the same proportions invested in each of the investments. Her salary will grow at the same rate as inflation.

投资学第7版Test Bank答案

38. How much does Stephanie currently have in the safe account; how much in the risky

account?

A) $3,800, $200

B) $2,000, $2,000

C) $200, $3,800

D) $2,500, $1,500

E) $1,500, $2,500

Answer: C Difficulty: Easy

Rationale: The safe account has .05*$4,000=$200 and the risky account

has .95*$4,000=$3,800.

39. Of the total amount of new funds that will be invested by Stephanie and by her employer

on her behalf, how much will she put into the safe account each year; how much into the risky account?

A) $3,800, $200

B) $2,000, $2,000

C) $200, $3,800

D) $2,500, $1,500

E) $1,500, $2,500

Answer: C Difficulty: Easy

Rationale: The safe account gets .05*($2,000+2,000)=$200 and the risky account

gets .95*($2,000+2,000)=$3,800.

40. How much can Stephanie be sure of having in the safe account at retirement?

A) $37,221

B) $16,423

C) $11,856

D) $21,156.

E) $49,219

Answer: D Difficulty: Moderate

Rationale: The value in the safe account in 44 years will be $200*(1.035)44 +

$200*FVIFA3.5%,44 = $21,156.33.

投资学第7版Test Bank答案

41. How much can Stephanie expect to have in her risky account at retirement?

A) $2,731,838

B) $2,915,415

C) $1,425,316

D) $224,651

E) $3,545,886

Answer: A Difficulty: Moderate

Rationale: The value in the risky account in 44 years will be $3,800*(1.10)44 +

$3,800*FVIFA10%,44 = $2,731,838.38.

Use the following to answer questions 42-45:

Genny Webb is 27 years old and has accumulated $7,500 in her self-directed defined contribution pension plan. Each year she contributes $2,000 to the plan and her employer contributes an equal amount. Genny thinks she will retire at age 63 and figures she will live to age 90. The plan allows for two types of investments. One offers a 3% risk-free real rate of return. The other offers an expected return of 12% and has a standard deviation of 39%. Genny now has 20% of her money in the risk-free investment and 80% in the risky investment. She plans to continue saving at the same rate and keep the same proportions invested in each of the investments. Her salary will grow at the same rate as inflation.

42. How much does Genny currently have in the safe account; how much in the risky

account?

A) $1,500, $6,000

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