Question

1. True – False. Front running is when other market players might learn about a fund’s intentions and trade in advance, hoping to profit.

2. The retirement channel is a two sales process because you must:

a. Sell twice as much to achieve same profits

b. Sell to the plan sponsor and participants

c. Become the plan administrator and sell to the sponsoring firm

3. True/False. Hedge funds and other large money managers do not like to use dark pools because it exposes their strategy to the market.

4. The following a primary difference between a Traditional ROTH and a ROTH IRA:

a. Whether withdrawals are taxed

b. Whether earnings accumulate tax free

c. Only one has unlimited investment options

5. A defined contribution plan is most similar to a:

a. Pension Fund

b. 401k

c. ROTH IRA 6. What is proxy voting?

7. What is stockholder activism in relation to proxy voting:

8. What is the Wall Street Walk? Why is it cheaper to sell a stock than participate in shareholder activism?

9. True – False. 12b-1 fees are considered to be a marketing fee

10. What is a primary difference between Financial Advisers and Registered Investment Advisers?

11. What is a 12b-1 fees purpose?

12. What is a front end and back end load? Do both decrease over time?

13. What is the benefit to the Authorized Participant in the creation/redemption process of ETF’s:

a. Investment management fees

b. Arbitrage profits

c. Alpha from investment portfolio

14. If an ETF was trading above the NAV the Authorized Participant (AP) would:

a. The AP only acts when the ETF is below the NAV

b. The AP would create shares

c. The AP would redeem shares

15. Why have employers wanted to shift from DB to DC plans?

16. True/False. A ROTH IRA is taxed like income upon distribution in retirement. The assets grow tax free while inside the ROTH

17. True/False. A Defined Benefit plan is the same as a pension and a Defined Contribution plan is the same as a 401k

18. What is the typical fee structure of a hedge fund?

19. What are the benefits of a 401k/Traditional IRA? What is the primary difference between the two

20. What is the primary benefit of a target date fund?

Answer 1

1. True. In front running, brokers benefit from price sensitive information to gain economic advantage from large orders.

3. False. Dark pools are private stock exchanges especially reserved for large traders which include hedge funds.

4. In traditiona IRA, withdrawls are taxed at ordinary tax rates but in roth IRA they accumulate tax free. Both a and b option should be correct.

5. b. 401(k). Tax deferred retirement plan

9. True. It is considered a marketing fee or operating expense and is included in fund's expense ratio.

11. same as 9.

17. True.