RPA 2 > Additional Questions > Flashcards

Additional Questions Flashcards

(20 cards)

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1
Q

The difference b/w IRR and time-weighted return is:

  1. IRR applies only to mutual funds sponsored by one firm
  2. time-weighted return considers the flow of money in and out of the fund
  3. IRR only for that yr and time-weighted evaluates the return over a period of yrs
  4. time-weighted assumes money leaves the plan, and IRR assumes that all the money stays in teh plan
A

2

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2
Q

An IRA contribution:

  1. must be made by the end of the calendar yr
  2. must be made by April 15 (tax filing date)
  3. must be made by Oct 15 (tax ext. filing date)
  4. must be made by Jan 1
A

2

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3
Q

An IRA structure must be used in which of these accts?

  1. SEP
  2. ESOP
  3. DB plan
  4. SIMPLE
A

1

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4
Q

an “excess benefit plan” is:

  1. an illegal plan struct.
  2. designed to provide exec. w/ additional benef. beyond the limits of a qualified plan
  3. an ERISA - qualif. plan
  4. a Keogh (self-employed) plan
A

2

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5
Q

Which of these stk plans is ERISA qualified plan?

  1. ISO (Incent Stk Option Plan)
  2. SAR (Stk Appreciation Rights Plan)
  3. Restricted Stock Plan
  4. ESOP
A

4

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6
Q

A formula that bases benef. on the total earnings of the EE during his/her career w/ the ER is a:

  1. career-pay plan
  2. final-pay plan
  3. annuity purch formula
  4. money purch formula
  5. flat pay plan
A

1

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7
Q

a DB plan that has an “excess formula” is:

  1. integrated w/ SS
  2. designed to interact w/ 401K plans
  3. disqualified under section415
  4. Provides additional benefits to early retirees
A

1

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8
Q

In evaluating inv., which risks s/b considered?

  1. mkt risk
  2. inflation risk
  3. business risk
  4. geographical risk
A

ALL

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9
Q

Which of the following cannot be held in an IRA?

  1. indiv. securities
  2. hedge funds
  3. collectibles
  4. annuities
A

3

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10
Q

A plan sponsoring an SEP must:

  1. provide SPDs to all eligible EES
  2. file form 5500
  3. hire trustee
  4. select IRA company
A

4

SEP isn’t an ERISA plan so it doesn’t need to do 1-3

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11
Q

What is Constructive Receipt?

  1. when an EE has control of receiving the funds, then they are taxable
  2. date when contrib. are received by IRA custodian
  3. date when distrib. check is received, starting the 60-day rollover check
  4. date when EE is elig. for distrib.
A

1

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12
Q

“cashless exercise” means:

  1. when an EE chgs inv. options in a plan
  2. when a comp. decides to not make a contrib. to the SEP that yr
  3. when an EE decides to exerc. stk options, using the proceeds to pay the req’d amt
  4. when a stk option becomes worthless, since stk value is less than strike price
A

3

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13
Q

A ROTH IRA distrib. is:

  1. taxable unless NRA
  2. taxable, but no early distrib. penalty at age 59 1/2
  3. taxable to beneficiaries upon death of owner
  4. not taxable if held for 5 yrs and after age 59 1/2
A

4

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14
Q

Rabbi Trusts applies to:

  1. DB plans
  2. all ERISA qualified plans sponsored by religious entities
  3. SEP plans
  4. NON-qualified deferred comp. plans
A

4

put aside and ER can’t do anything w/ funds

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15
Q

When I/R’s increase:

  1. bonds fall
  2. bonds increase
  3. stks fall
  4. stks increase
A

1

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16
Q

when there has been a plan am., which of the following comm pieces are req’d to be provided to partic.?

  1. SAR
  2. SPD
  3. Form 5500
  4. SMM
  5. copy of the plan am.
17
Q

What is a “passive inv”?

  1. an inv. that has min. chg in value
  2. an inv. fund that you have someone else manage for you
  3. an index fund
  4. a corporate bond
18
Q

Which of the following best represents TNC?

  1. PV of EE’s indiv. benef. accrued that yr plus incr. in past serv. benef. due to incrs. in comp
  2. FV of EE’s indiv. benef. accrued that yr plus incr. in past serv. benef. due to incrs. in comp
  3. PV of EE’s indiv. benef. accrued that yr plus adjmt due to mkt return of inv. portf.
  4. PV of EE’s indiv. benef. accrued that yr
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A

4

DB plans

determines actuarial funding of the plan ofr the yr.

19
Q

All of the following are types of fees found in mutual funds except:

  1. mortality and expense
  2. front-end load
  3. mgmt fees
  4. 12b-1 fees
  5. back-end load
20
Q

All of the following are features of a Cash Balance Plan except:

  1. final-pay avg plan
  2. apply a fixed i/r credit
  3. form of a DB plan
  4. provide for relatively early accrual of benef.
  5. provide annual contrib. credit
RPA 2
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