Basic Compliance
A: This course is designed to help Registered Reps identify red flags in financial transactions
Q: What is Anti-Money Laundering? (AML)
A: This order instructs a broker to buy or sell immediately at the best available current price.
Q: What is a Market Order?
A: This statistical measure evaluates how closely a direct-indexing portfolio follows its benchmark.
Q: What is tracking error?
A: This permanent policy provides guaranteed premiums, guaranteed cash value, and a guaranteed death benefit when funded as required.
Q: What is whole life insurance?
A: This strategy involves investing a fixed dollar amount at regular intervals regardless of market conditions.
Q: What is dollar-cost averaging?
A: This type of annuity begins making income payments almost immediately after purchase.
Q: What is an immediate annuity (SPIA)?
A: A communication distributed to more than 25 retail investors within any 30-calendar-day period is classified as this.
Q: What is Retail Communication?
A: This order guarantees a price but not execution.
Q: What is a Limit Order?
A: Direct indexing is most commonly implemented in this type of account because security-level losses can create immediate tax value.
Q: What is a taxable brokerage account?
A: This universal-life charge reflects the insurer’s cost of providing the net amount at risk.
Q: What is the cost of insurance, or COI?
A: This statistic measures an investment's sensitivity to movements in the overall market.
Q: What is beta?
A: The primary economic purpose of an annuity is transferring this financial risk from the individual to the insurance company.
Q: What is longevity risk (the risk of outliving one's assets)?
A: Working in another role for compensation would generally require disclosure under this rule.
Q: What is the Outside Business Activity rule?
A: This order remains active until executed or can: What is higher sensitivity?celed by the customer.
Q: What is Good-'Til-Canceled (GTC)?
A: After offsetting capital gains, an individual may generally deduct up to this amount of net capital losses annually against ordinary income.
Q: What is $3,000?
A: This test determines whether excessive early premium funding causes a policy to become a modified endowment contract.
Q: What is the seven-pay test?
A: In Modern Portfolio Theory, this curve represents portfolios expected to provide the highest return for each level of risk.
Q: What is the Efficient Frontier?
A: This payout option guarantees payments for the annuitant's life with a minimum payment period.
Q: What is Life with Period Certain?
A: This SEC regulation requires broker-dealers to act in the retail customer's best interest when making recommendations.
Q: What is Regulation Best Interest (Reg BI)?
***Must Bet points before revealing question ****DOUBLE JEOPARDY
A: A buy limit order is normally entered this direction relative to the current market.
Q: What is below the current market price?
A: Capital losses that exceed the annual deductible amount may generally receive this treatment.
Q: What is an indefinite carryforward to future tax years?
A: This policy design minimizes the initial death benefit relative to premium funding to increase potential cash-value accumulation without violating tax limits.
A: What is a max-funded, minimum-death-benefit design? (Minimum Level Non-MEC)
A: This behavioral error causes investors to place too much weight on recent events when forecasting future returns.
Q: What is Recency Bias?
A: In many FIA income riders, this feature increases the benefit base by a stated percentage each year before lifetime income begins, provided no withdrawals are taken.
Q: What is a roll-up rate (income roll-up)?
A: Recommending excessive trading primarily to generate commissions is known as this.
Q: What is churning?
A: A short seller closing a losing position would most likely use this order type.
Q: What is a Buy Stop Order?
A: Gifting appreciated direct-indexing securities during life generally transfers this basis to the recipient.
Q: What is carryover basis?
A: A policyowner borrows heavily from a permanent life insurance policy and later allows it to lapse. This event can cause the outstanding loan plus accrued interest to be treated as proceeds received, creating taxable income even though no cash is paid to the owner.
A: (What is phantom income?) from a policy lapse with an outstanding loan?
A: This statistical measure quantifies how much an investment's returns tend to fluctuate around its average return.
Q: What is standard deviation?
A: When comparing two FIA income riders, advisors should evaluate not only the roll-up rate but also this percentage that ultimately determines annual lifetime income.
Q: What is the guaranteed lifetime withdrawal percentage (payout factor)?