Cwmc Module 19: Investment & Retirement Competency Test

13 Questions | Total Attempts: 41

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Module Quizzes & Trivia

This quiz is part of LFE Institute's CWMC (Certified Workplace Money Coaching) course. It will test your proficiency in the Investment & Retirement Module (Module 19) of the program. The questions are all multiple choice, and are designed to be a review of this Module. Let LFE know when you've successfully completed this test and are ready to begin the next Module. Correct answers required for passing grade: 13/15


Questions and Answers
  • 1. 
    Which of the following terms does NOT pertain to retirement investments?
    • A. 

      Mutual funds

    • B. 

      Load

    • C. 

      No-load

    • D. 

      Load-Bearing Wall

    • E. 

      Front-end load

  • 2. 
    What questions should be asked when interviewing a potential investment advisor? (check all that apply)
    • A. 

      What credentials does your spouse have?

    • B. 

      Have you been convicted of a felony or seriously reprimanded by the SEC or governing body of your field?

    • C. 

      What military service background, if any, do you have?

    • D. 

      How are you compensated?

    • E. 

      May I have names of other clients and the amount you are investing for them?

  • 3. 
    Which of the following is NOT the correct definition for the corresponding advisor designation?
    • A. 

      CPA: Certified Public Accountant

    • B. 

      PFS: Personal Financial Specialist (CPAs who specialize in the financial planning area)

    • C. 

      CFP: Certified Financial Planner

    • D. 

      CLU: Controlled Legal Underwriter (Insurance agent)

    • E. 

      CFA: Chartered Financial Analyst

  • 4. 
    When meeting an advisor for the first time, an investor should consider it a "red flag" if the advisor:
    • A. 

      Explains risk tolerance clearly so that the client understands it

    • B. 

      Asks about the investments the client currently has

    • C. 

      Makes an immediate recommendation to save the client time

    • D. 

      Discusses the pros and cons of maxing out a 401(k) plan before investing in other investment options

    • E. 

      Clarifies the client’s financial goals

  • 5. 
    To reduce repetitive or redundant words in Money Coaching responses, Money Coaches can find valuable synonyms by using:
    • A. 

      A thesaurus

    • B. 

      Financial Advisor's Desk Reference

    • C. 

      A Blue Book

    • D. 

      Bartlett’s Famous Quotations

    • E. 

      The World Almanac

  • 6. 
    A primary goal in CWMC Module 19 Investments & Retirement is learning how to explain financial terms and strategies ________ .
    • A. 

      To prepare employees for a possible career in finance

    • B. 

      As defined in Webster’s or other accessible dictionaries

    • C. 

      In language that every employee can understand

    • D. 

      In the proper font, size and formatting

    • E. 

      None of the above

  • 7. 
    Which of the following would NOT be considered a common annuity term or type?
    • A. 

      Fixed Annuity

    • B. 

      Legislative Annuity

    • C. 

      Variable Annuity

    • D. 

      Immediate Annuity

    • E. 

      Equity-Index Annuity

  • 8. 
    Which of the following is generally true?
    • A. 

      Class A shares are sold with an up-front sales charge

    • B. 

      Class B shares are sold without an up-front sales charges but carry higher annual expenses for a fixed period

    • C. 

      Class 529 shares were created to help investors save for higher education expenses through a tax-advantaged account

    • D. 

      All of the above are true

    • E. 

      None of the above are true

  • 9. 
    If retired employees do not have enough money saved to live comfortably during retirement, they can stretch their retirement dollars through which of the following strategies? (check all that apply)
    • A. 

      Continue to work as long as possible during their retirement years

    • B. 

      Find a less expensive area with lower cost-of-living, taxes, housing, and healthcare costs

    • C. 

      Consider a reverse mortgage to generate additional living income after age 70–75

    • D. 

      Downsize the cost of their home and car, and eliminate as many long-term debts until they are absolutely needed

  • 10. 
    Which of the following basic strategies should an employee consider when investing?
    • A. 

      Avoid emotional investing

    • B. 

      Invest heavily in company stock if the employee has inside information and knows they are doing well

    • C. 

      Invest in Life Cycle funds, fixed investments, balance funds, and a fixed income investment; this is a good way to diversify

    • D. 

      Time the market by watching the news everyday and react accordingly; it’s the safest way to invest for the long term

    • E. 

      All of the above

  • 11. 
    Which of the following can be a good strategy for handling the money in a company 401(k) when an employee leaves the company?
    • A. 

      Withdraw the money and pay down high-interest credit card debts

    • B. 

      Use the money to buy a new home if housing values are low; it’s one of the safest investments over the long term

    • C. 

      Leave the money in the current employer if the plan is doing well

    • D. 

      Have the employer write a check for the balance in the account and use the 60-day time period to find a good IRA option

    • E. 

      All of the above could be good strategies

  • 12. 
    What are the drawbacks of investing in annuities? (check all that apply)
    • A. 

      High commissions

    • B. 

      Significant early withdrawal penalty

    • C. 

      Does not grow tax deferred like a 401(k)

    • D. 

      Can only invest $5,000/year if the investor is under the age of 50

  • 13. 
    Which of the following factors or strategies should an employee consider when investing for retirement? (check all that apply)
    • A. 

      The employee’s age, specifically, how many years until retirement

    • B. 

      The employee’s risk tolerance

    • C. 

      If the employee is under the age of 50, he/she should have at least 50% in equity funds

    • D. 

      The employee should be conservative; he/she can’t afford to invest retirement dollars in anything that could lose value