IN AN AGENCY RELATIONSHIP, TITLE AND OWNERSHIP OF THE PROPERTY IS IN THE NAME OF THE:

A.  AGENT

B.  ACCOUNT

C.  NOMINEE

D.  PRINCIPAL

IN 2008, GRANDPARENTS ESTABLISH A TRUST FOR THE BENEFIT OF CHILDREN, CHILDREN'S SPOUSES, AND GRANDCHILDREN.  IF THE TRUSTEE PAYS $15,000 DIRECTLY TO PRINCETON UNIVERSITY FOR A GRANDCHILD'S TUITION, THIS PAYMENT SHOULD BE CHARACTERIZED AS A $15,000:

A.  DIRECT SKIP

B.  TAXABLE CONTRIBUTION

C.  NONTAXABLE TRANSFER

D.TAXABLE TERMINATION

A 100% STOCK DIVIDEND DISTRIBUTION IS ESSENTIALLY THE SAME AS WHICH OF THE FOLLOWING?

A.  2-FOR-1 STOCK SPLIT

B.  3-FOR-1 STOCK SPLIT

C.  1-FOR-2 REVERSE SPLIT

D.  INCREASING THE CASH DIVIDEND BY 100%

AN UNMARRIED TAXPAYER RECEIVED A SALARY OF $10,000, DIVIDEND INCOME OF $600, AND UNEMPLOYMENT COMPENSATION OF $1,000.  WHAT IS HER ADJUSTED GROSS INCOME ON HER 2010 TAX RETURN?

A.  $10,400

B.  $10,600

C.  $11,400

D.  $11,600

ALL OF THE FOLLOWING ARE CONSIDERED FIDUCIARIES UNDER OCC REGUKATUIB 9, EXCEPT:

A.  TRUSTEE

B.  EXECUTOR/PERSONAL REPRESENTATIVE

C.  INVESTMENT ADVISOR IN AN AGENCY ACCOUNT

D.  CUSTODIAN WITH NO INVESTMENT DISCRETION

UNDER THE PROVISIONS OF THE ECONOMIC GROWTH & TAX RELIEF RECONCILIATION ACT OF 2001 (EGTRRA), AN INDIVIDUAL IS ABLE TO MAKE CATCH-UP CONTRIBUTIONS TO HIS 401(K) RETIREMENT PLAN AS LONG AS HE REACHES WHICH OF THE FOLLOWING YEARS OF AGE IN THE YEAR OF THE CONTRIBUTION?

A.  50

B.  55

C.  59 1/2

D.  70 1/2

DAN AND NORA PURCHASED THEIR PRIMARY RESIDENCE IN 2006 FOR $135,000.  THEY SOLD THE HOME IN 2009 FOR $250,000 AND BOUGHT A SMALLER HOME FOR $150,000.  WITH REGARD TO TAXES, THE GAIN ON THE SALE OF THE HOME IS:

A. NOT A TAXABLE EVENT

B. A TAXABLE EVENT OF $15,000

C. A TAXABLE EVENT OF $100,000

D. A TAXABLE EVENT OF $115,000

WHICH OF THE FOLLOWING ARE RATING COMPANIES THAT CAN PROVIDE INFORMATION TO ADVISORS LOOKING TO SELECT STRONG INSURANCE COMPANIES?

A. AM BEST COMPANY, WARD'S, MORNINGSTAR, NAIC

B. AM BEST COMPANY, STANDARD & POOR'S, MOODY'S, FITCH, AND WEISS

C. AM BEST COMPANY, NAIC, RBS, FITCH, AND WEISS

D. STANDARD & POOR'S, MOODY'S, FASB, AND RBC

E. STANDARD & POOR'S, MOODY'S, NAIC, WEISS

JOHN DOE OWNS 10% OF A SUB-S CORPORATION, THAT HAD REVENUE OF $1,000,000.  OF THIS REVENUE, $200,000 WAS LONG TERM CAPITAL GAIN AND $20,000 WAS TAX-EXEMPT INCOME.  THE CORPORATION HAD AN OPERATING EXPENSE OF $300,000.  WHICH OF THE FOLLOWINGMUST JOHN DOE REPORT ON HIS FEDERAL INCOME TAX RETURN?

NET INCOME   CAPITAL LOSS OR LONG-TERM CAPTIAL GAIN 

A. $68,000   $30,000 CAPITAL LOSS

B. $48,000   $30,000 CAPITAL LOSS

C. $68,000    $20,000 LONG-TERM CAPITAL GAIN

D. $48,000   $20,000 LONG-TERM CAPITAL GAIN

A NEW CLIENT IS TRYING TO DECIDE WHETHER A TRADITIONAL IRA OR A ROTH IRA IS BETTER FOR HIM.  YOU SHOULD ADVISE HIM TO FUND A ROTH IRA IF HE:

A. WANTS TO BE ABLE TO DEDUCT THE CONTRIBUTIONS FROM HIS AGI

B. IS IN A HIGH TAX BRACKET AT THE TIME OF HIS CONTRIBUTIONS

C. EXPECTS NO CHANGE IN HIS TAX BRACKET FOR THE REST OF HIS LIFE

D. IS A YOUNG MAN AND EXPECTS HIS TAX RATES TO BE HIGHER AT THE TIME OF DISTRIBUTION

THE INCLUSION OF A CRUMMEY POWER IN AN IRREVOCABLE LIFE INSURANCE TRUST IS A MEANS OF QUALIFYING FOR:

A. A CAPITAL GAINS EXCLUSION FOR THE TRUST

B. AN ANNUAL GIFT TAX EXCLUSION

C. EXCLUSION FROM THE GENERATION-SKIPPING TRANSFER TAX

D. TREATMENT AS A SIMPLE TRUST FOR INCOME TAX PURPOSES

WHICH OF THE FOLLOWING INVESTMENTS IS NOT ELIGIBLE FOR AN IRA?

A. CMOs

B. COMMERCIAL REAL ESTATE

C. PRIMARY RESIDENCE

D. PRECIOUS METALS

C. PRIMARY RESIDENCE

A SPRINGING POWER OF ATTORNEY IS:

A. IMMEDIATELY EFFECTIVE

B. EFFECTIVE ONLY ON A CONDITIONAL EVENT

C. EFFECTIVE ONLY IF LATER NOTARIZED

D. EFFECTIVE ONLY IF SIGNED BY THE ATTORNEY-IN-FACT

B. EFFECTIVE ONLY ON A CONDITIONAL EVENT

WHICH OF THE FOLLOWING SITUATIONS REPRESENTS COMPLIANCE WITH THE UNIFORM INCOME AND PRINCIPAL ACT?

A. THE PROCEEDS OF A SALE OF UNPRODUCTIVE PROPERTY ARE ALLOCATED ONE-HALF TO INCOME AND ONE-HALF TO PRINCIPAL AND ONE-HALF TO INCOME

B. THE TRUSTEE FEE IS ALLOCATED ONE-HALF TO INCOME AND ONE-HALF TO PRINCIPAL

C. THE REALIZED CAPITAL GAIN ON THE SALE OF REAL PROPERTY IS ALLOCATED TO INCOME AFTER PAYMENT OF ALL EXPENSES OF SALE.

D. A PROPORTIONATE SHARE OF THE DEPLETION ALLOWANCE FOR INVESTING ASSETS IS TRANSFERRED FROM PRINCIPAL TO INCOME.

B. THE TRUSTEE FEE IS ALLOCATED ONE-HALF TO INCOME AND ONE-HALF TO PRINCIPAL

WHEN LIABILITY FOR SITE ENVIRONMENTAL CLEANUP IS AN ISSUE, A FIDUCIARY THAT IS A CURRENT OWNER OF A FACILITY MAY BE ABLE TO DEFEND ITSELF USING THE:

A. ACCIDENTAL HAZARD DEFENSE

B. INNOCENT PURCHASER DEFENSE

C. INTERVENING THIRD-PARTY DEFENSE

D. PAST-PURCHASER CONTRIBUTORY NEGLIGENCE DEFENSE

C. INTERVENING THIRD-PARTY DEFENSE

WHICH OF THE FOLLOWING TRUSTS IS IMPOSED BY A COURT ON A HOLDER OF PROPERTY TO PREVENT UNJUST ENRICHMENT?

A. RESULTING

B. CONSTRUCTIVE

C. EXPRESS

D. CRUMMEY

B. CONSTRUCTIVE

A CLIENT TAKES A DISTRIBUTION PRIOR TO AGE 59 1/2 FROM A TRADITIONAL IRA.  THIS DISTRIBUTION IS SUBJECT TO A 10% PREMATURE DISTRIBUTION PENALTY IF THE PROCEEDS ARE:

A. USED TO PAY A STATE TAX LEVY

B. USED FOR A FIRST-TIME HOME PURCHASE

C. TAKEN AS A RESULT OF DISABILITY

D.TAKEN AS SUBSTANTIALLY EQUAL PERIODIC PAYMENTS

A. USED TO PAY A STATE TAX LEVY

UNDER THE DOCTRINE OF CY PRES, THE COURT HAS THE POWER TO ORDER WHICH OF THE FOLLOWING?

A. CHANGE IN THE VENUE OF THE TRUST ADMINISTATION

B. SURCHARGE OF A TRUSTEE WHO COMMITS A BREACH OF TRUST

C. APPOINTMENT OF A SUCCESSOR TRUSTEE WHEN THE PRIOR TRUSTEE HAS RESIGNED

D. APPLICATION OF FUNDS TO A DIFFERENT CHARITABLE ORGANIZATION THAN THAT SPECIFIED IN THE TRUST AGREEMENT

WHEN EXERCISING ITS DISCRETIONARY AUTHORITY TO MAKE PRINCIPAL DISTRIBUTIONS TO AN INCOME BENEFICIARY, THE TRUSTEE SHOULD NOT CONSIDER THE:

A. TRUSTOR'S STATEMENTS OF INTENT

B. REASON FOR THE REQUESTED DISTRIBUTION

C. INCOME BENEFICIARY'S OUTSIDE RESOURCES

D. CURRENT NEEDS OF THE REMAINDER BENEFICIARY

THE LARGEST COMPONENT OF GDP IS:

A.  CONSUMPTION

B. INVESTMENT

C. IMPORTS

D. EXPORTS

BOB JONES IS WORKING WITH HIS ATTORNEY ON A NEW ESTATE PLAN.  HE SAYS HE WANTS TO GIVE THE TRUSTEE OF A CREDIT SHELTER TRUST THE POWER TO PAY INCOME EITHER TO HIS WIFE OR ANY OR ALL OF HIS THREE CHILDREN.  TRUST PROVISIONS GRANTING A TRUSTEE THIS POWER ARE COMMONLY CALLED

A. FAMILY PAYMENT PROVISIONS

B. HANGING POWERS

C. SPRINKLING OR SPRAYING PROVISIONS

D. CRUMMEY PROVISIONS

 WHICH OF THE FOLLOWING IS NOT TRUE?

A. CLOSELY HELD COMPANIES GENERALLY HAVE NO PUBLIC INVESTORS

B. COMMINGLED FUNDS ARE CLOSED TO THE GENERAL PUBLIC.

C. VALUATION OF A CLOSELY HELD CORPORATION FOLLOWERS THE SAME PRINCIPLE AS A PUBLICLY TRADED STOCK

D. COMMON TRUST FUNDS TYPICALLY TRADE PUBLICLY

D. COMMON TRUST FUNDS TYPICALLY TRADE PUBLICLY

WHICH OF THE FOLLOWING INVESTMENT COMPANY SHARES TRADE ON THE SECONDARY MARKET?

A. OPEN-END MUTUAL FUNDS

B. CLOSED-END MUTUAL FUNDS

C. UNIT INVESTMENT FUNDS

D. VARIABLE UNIVERSAL LIFE INTERESTS

B. CLOSED-END MUTUAL FUNDS

YOIUR CLIENT PURCHASES MUNICIPAL BONDS FROM HIS STATE OF RESIDENCE IN THE SECONDARY MARKET.  UPON MATURITY, A MUNICIPAL BOND THAT HE HAS PURCHASED AT A DISCOUNT GENERATES TAX-EXEMPT INTEREST AND:

A. A CAPITAL GAIN

B. A CAPITAL LOSS

C. ORDINARY INCOME

D. NO ADDITIONAL TAXABLE INCOME

A. A CAPITAL GAIN

A COMPANY MOST LIKELY WILL CALL BONDS (ASSUMING THE BONDS ARE CALLABLE) IT HAD PREVIOUSLY ISSUED IF

A. INTEREST RATES RISE

B. INTEREST RATES FALL

C. INTEREST RATES REMAIN CONSTANT

D. THE COMPANY EXPERIENCES DIFFICULT FINANCIAL CONDITIONS.

B. INTEREST RATES FALL

PRECATORY LANGUAGE IS LANGUAGE IN A TRUST INSTRUMENT THAT

A. EXPRESSES A WISH OF RECOMMENDATION, BUT MAY NOT BE BINDING

B. LEGALLY OBLIGATES THE TRUSTEE TO A CERTAIN COURSE OF ACTION

C. GENERALLY OVERRIDES ANY OTHER PROVISIONS

D. EXPRESSLY STATES THE POWERS OF THE TRUSTEE

WHICH OF THE FOLLOWING SPECIFICALLY PERMITS FINANCIAL INSTITUTIONS TO SHARE INFORMATION REGARDING INDIVIDUALS, ENTITIES, OR ORGANIZATIONS SUSPECTED OF POSSIBLE TERRORIST OR MONEY LAUNDERING ACTIVITIES, PROVIDED NOTICE OF THIS INTENT TO SHARE HAS BEEN FILED PROPERLY?

A. BANK SECRECY ACT

B. SARBANES-OXLEY ACT

C. USA PATRIOT ACT

D. GRAMM-LEACH-BLILEY ACT

IF THE SURVIVING SPOUSE OF THE DECEDENT HAS A GENERAL POWER OF APPOINTMENT OVER THE RESIDUAL ESTATE AND FAILS TO EXERCISE THIS POWER, THE ASSETS OF THE RESIDUAL ESTATE WILL BE DISTRIBUTED:

A. TO THE ESTATE OF THE SURVIVING SPOUSE

B. TO THE CHILDREN AND HEIRS OF THE DECEDENT, PER STIRPES

C. PURSUANT TO THE TERMS OF THE GOVERNING INSTRUMENT

D. PURSUANT TO THE INTESTACY LAWS OF THE ESTATE OF THE DECEDENT

A BACHELOR BEQUEATHED 100 SHARES OF BH STOCK TO HIS NEPHEW, NED, IN THE FOLLOWING MANNER:"TO MY NEPHEW, NED, 100 SHARES OF BH STOCK." HE BEQUEATHED HIS RESIDUARY ESTATE IN TRUST TO A WELL-KNOWN CHARITY.  AT THE TIME OF THE EXECUTION OF THE BACHELOR'S WILL, HE OWNED EXACTLY 100 SHARES OF BH STOCK.  SUBSEQUENTLY, HE SOLD THE STOCK AND, UPON REINVESTMENT, LOST MOST OF THE VALUE OF THE INVESTMENT. ON THE DATE OF HIS DEATH, HIS GROSS ESTATE WAS VALUED AT $800,000 AND BH STOCK TRADED AT $71.00 PER SHARE.  IF THE MARKET PRICE REMAINS CONSTANT, AND TAXES, ADMINISTRATION EXPENSES, AND ATTORNEY'S FEES ARE DISREGARDED, WHAT IS THE PROPER SETTLEMENT OF THE ESTATE?

A. CHARITY AND NED WILL SHARE EQUALLY IN THE NET ESTATE.

B. CHARITY'S BEQUEST WILL PREVAIL BECAUSE IT SERVES A HIGHER PURPOSE

C. EXECUTOR MUST PURCHASE 100 SHARES OF BH STOCK AND SATISFY THE BEQUEST

D. ESTATE PASSES TO CHARITY, AND THE BEQUEST TO NED FAILS DUE TO LAPSE

ACCORDING TO THE RESEARCH OF SHARPE, EVANS, AND MARKOWITZ, WHAT MINIMUM NUMBER OF COMMON STOCKS IS REQUIRED IN A PORTFOLIO TO ACHIEVE ALMOST THE SAME LEVEL OF BENEFIT FROM DIVERSIFICATION AS A PORTFOLIO COMPOSED OF ALL COMMON STOCK (ASSUMING EQUAL DOLLARS INVESTED IN DIFFERENT INDUSTRIES)?

A. 5 OR LESS

B. 18-20

C. 50-60

D. 100 OR MORE

WHICH OF THE FOLLOWING IS NOT PART OF FUNDAMENTAL STOCK ANAYLSIS?

A.  CHART PATTERNS

B.  COMPANY SALES

C.  COMPANY EARNINGS

D.  COMPANY MANAGEMENT

PAUL IS THE INCOME BENEFICIARY OF A TRUST WITH A MARKET VALUE OF $500,000 ESTABLISHED THREE YEARS AGO.  HE WAS GIVEN A NON-CUMULATIVE POWER TO WITHDRAW $25,000 PER YEAR OF PRINCIPAL, WHICH HE HAS NEVER EXERCISED.  ASSUMING THAT THE VALUE OF THE TRUST STAYS CONSTANT, WHAT AMOUNT WILL BE INCLUDED IN PAUL'S ESTATE IF HE DIES THIS YEAR?

A.  $0

B.  $25,000

C.  $75,000

D.  $500,000

WHICH OF THE FOLLOWING IS GENERALLY NOT CONSIDERED A MEDICARE, PART A HOSPICE BENEFIT?

A.  DRUGS

B.  NURSING CARE

C.  HOME HEALTH AIDE SERVICES

D.  TREATMENT FOR A TERMINAL CONDITION

WHICH OF THE FOLLOWING IS MOST IMPORTANT IN DETERMINING THE APPROPRIATE INVESTMENT MIX FOR A TRUST PORTFOLIO?

A.  AGE OF BENEFICIARY

B.  AMOUNT OF LIFE INSURANCE OWNED

C.  VALUE OF THE BENEFICIARY'S LIQUID ASSETS

D.  NUMBER OF YEARS THE TRUST HAS BEEN IN EXISTENCE

A.  AGE OF BENEFICIARY

A "STRETCH" IRA COMMONLY REFERS TO AN INDIVIDUAL RETIREMENT ACCOUNT THAT:

A.  MAINTAINS A HEAVY EQUITY CONCENTRATION

B.  MAINTAINS ASSETS FROM A SPOUSAL ROLLOVER

C.  MUST BE DISTRIBUTED OVER THE REMAINING LIFE EXPECTANCY OF THE DESIGNATED BENEFICIARY

D.  QUALIFIES FOR PREFERENTIAL INCOME AND ESTATE TAX TREATMENT PARTICULARLY WITH RESPECT TO THE FUNDING OF CHARITABLE SPLIT-INTEREST TRUSTS

C.  MUST BE DISTRIBUTED OVER THE REMAINING LIFE EXPECTANCY OF THE DESIGNATED BENEFICIARY

THE FOLLOWING ACTIVITY BY A PERSON ENGAGED IN FINANCIAL PLANNING FOR A CLIENT IS MOST LIKELY TO BE A BREACH OF PROFESSIONAL ETHICS:

A.  ACTING ON THE REQUEST OF THE CLIENT, THE PLANNER INVESTS THE CLIENT'S FUNDS IN AN INDEX FUND WHEN THE PLANNER BELIEVES THAT THE MARKET WILL DECLINE IN THE NEAR FUTURE

B.  SELLING SHARES OF STOCK AT THE FAIR MARKET VALUE FROM THE PLANNER'S PERSONAL ACCOUNT TO THE CLIENT AFTER CORRECTLY ADVISING THE CLIENT THAT THE COMPANY IS HIGHLY REGARDED BY LEADING MARKET ANALYSTS.

C.  ADDING THE CLIENT'S FUNDS TO THE PLANNER'S PERSONAL FUNDS WITHOUT ADVISING THE CLIENT IN ORDER TO MEET THE MINIMUM INVESTMENT FUNDS REQUIREMENT OF A TOP PORTFOLIO MANAGER.

D.  MAINTAINING BOTH CUSTODY AND DISCRETIONARY AUTHORITY OVER A CLIENT'S FUNDS IN AN UNDIVERSIFIED PORTFOLIO.

YOUR CLIENT USED YOUR FIRM'S STANDARD TRUST DOCUMENT.  HE REQUESTS THAT YOU DRAFT AN AMENDMENT TO THE DOCUMENT. YOU SHOULD:

A. REFER HIM TO SEVERAL QUALIFIED ESTATE PLANNING ATTORNEYS

B.  REFER HIM TO HIS ACCOUNTANT BEFORE YOU DRAFT THE AMENDMENT

C.  DRAFT THE AMENDMENT AND HAVE YOUR FIRM'S COUNSEL REVIEW IT

D.  DRAFT THE AMENDMENT USING YOUR FIRM'S WILL MANUAL AS A TEMPLATE

YOUR CLIENT IS BUYING A $250,000 HOME AND FINANCING IT WITH A $210,000 MORTGAGE.  YOU SHOULD WARN HER THAT SINCE SHE IS FINANCING MORE THAN 80% OF THE VALUE, SHE WILL NEED TO PAY:

A.  ADDITIONAL LOAN POINTS

B.  EXCESS LOAN PREMIUM FEES

C.  NEGATIVE AMORTIZATION COSTS

D.  PRIVATE MORTGAGE INSURANCE PREMIUMS

YOUR BANK IS SOLE TRUSTEE OF A CREDIT SHELTER TRUST.  THE TRUST PORTFOLIO IS INVESTED IN A DIVERSIFIED PORTFOLIO OF DOMESTIC STOCKS AND BONDS.  THE CURRENT BENEFICIARY REQUESTS THAT THE TRUSTEE DELEGATE A PORTION OF ITS INVESTMENT MANAGEMENT RESPONSIBILITY TO A RECOGNIZED THIRD PARTY ADVISOR WHO SPECIALIZES IN INTERNATIONAL INVESTING.  THE TRUST IS GOVERNED BY A STATE RECOGNIZING THE PRUDENT INVESTOR RULE.  THE TRUSTEE SHOULD:

A.  DECLINE THE REQUEST AS AN IMPERMISSIBLE DELEGATION OF ITS TRUST POWERS

B.  AGREE TO THE REQUEST SUBJECT TO THE REVIEW AND APPROVAL OF ITS RISK MANAGEMENT COMMITTEE.

C.  AGREE TO THE REQUEST SO LONG AS IT OBTAINS AUTHORIZATION AND INDEMNIFICATION FROM ALL BENEFICIARIES AND RECONFIRM ON AN ANNUAL BASIS

D.  AGREE TO THE REQUEST IF SATISFIED THAT DELEGATION WILL PROMOTE INVESTMENT DIVERSIFICATION, AND MONITOR THE INVESTMENT ADVISOR'S ACTIVITIES AND PERFORMANCE.

THE RISK TO A PORTFOLIO THAT IS CAUSED BY PRICE CHANGES IN THE OVERALL MARKET IS CALLED:

A.  DIVERSIFIED RISK

B.  NONSYSTEMATIC RISK

C. LIQUIDITY RISK

D.  SYSTEMATIC RISK

COLLEGE BANK IS CO-TRUSTEE OF AN IRREVOCABLE TRUST.  THE SOLE INCOME BENEFICIARY AND THE TWO REMAINDER BENEFICIARIES SERVE AS CO-TRUSTEES.  THE DOCUMENT GIVES EQUAL AUTHORITY TO EACH CO-TRUSTEE AND HAS NO DELEGATION PROVISIONS.  IRRECONCILABLE DIFFERENCES ARISE BETWEEN THE BANK AND THE CO-TRUSTEES CONCERNING INVESTMENT DECISIONS.  COLLEGE BANK SHOULD:

A.  SEEK COURT INSTRUCTION

B.RESIGN IN FAVOR OF THE INDIVIDUAL TRUSTEES

C. TERMINATE THE TRUST AND DISTRIBUTE THE ASSETS

D. DELEGATE INVESTMENT AUTHORITY TO THE INDIVIDUAL TRUSTEES

HUSBAND DIES. UNDER HIS WILL, ALL OF HIS PROPERTY PASSES TO WIFE.  IF WIFE DISCLAIMS ANY OF THIS PROPERY, IT WILL PASS TO A TRUST FOR THE BENEFIT OF WIFE AND ISSUE.  WIFE DISCLAIMS PART OF THE INTEREST 10 MONTHS AFTER HUSBAND'S DEATH.  WHICH OF THE FOLLOWING INDICATES WHETHER THIS TRANSFER MEETS THE REQUIREMENTS OF A QUALIFIED DISCLAIMER, AND WHY?

A.  MEETS REQUIREMENTS, BECAUSE WIFE, HAS UP TO 12 MONTHS TO DISCLAIM

B. MEETS REQUIREMENTS, BECAUSE WIFE HAS NOT RETAINED THE RIGHT TO DIRECT THE ENJOYMENT OF THE PROPERTY

C. DOES NOT MEET REQUIREMENTS, BECAUSE WIFE DID NOT MAKE A TIMELY DISCLAIMER

D. DOES NOT MEET REQUIREMENTS, BECAUSE WIFE CANNOT ENJOY THE PROPERTY SHE HAS DISCLAIMED

TIM MANAGES A TRUST THAT HOLDS ZERO-COUPON BONDS.  TO DETERMINE THE INCOME TAX LIABILITY, TIM SHOULD:

A. REPORT THE FULL AMOUNT OF THE DISCOUNT AT MATURITY

B. REPORT THE ANNUAL ACCRUAL EACH YEAR

C.  REPORT SEMI-ANNUAL INTEREST

D. ELECT TO DEFER INCOME RECOGNITION UNTIL BONDS MATURE

THE PURPOSE OF THE VALUATION DISCOUNT IN AN FLP OR LLC IS USED PRIMARILY FOR:

A. FEDERAL GIFT TAX PURPOSES

B. FEDERAL ESTATE TAX PURPOSES

C. FEDERAL INCOME TAX PURPOSES

D. SALES AND USE TAX PURPOSES

CHRIS JONES IS A TRUST OFFICER WITH ABC BANK AND TRUST. CHRIS JUST RECEIVED A CALL FROM HIS OLD ROOMMATE, FRED JONES.  FRED WORKS FOR XYZ COMPANY, AN ENGINEERING COMPANY.  FRED TOLD CHRIS THAT HIS COMPANY HAS JUST DEVELOPED A NEW PRODUCT THAT WILL REVOLUTIONIZE ITS INDUSTRY.  THE COMPANY HAS DECIDED NOT TO ANNOUNCE THE PRODUCT UNTIL THE PRODUCT IS PATENTED.  CHRIS PURCHASES SHARES IN HIS OWN NAME AND ALSO INVESTS A LARGE AMOUNT OF TRUST MONIES FOR HIS TWO LARGEST TRUST ACCOUNTS.  WHICH STATEMENT IS CORRECT?

A.  FRED HAS VIOLATED RULE 10B-5, BUT CHRIS HAS NOT

B. CHRIS HAS NOT VIOLATED 10B-5 BECAUSE CHRIS IS NOT AN INSIDER

C. CHRIS AND FRED HAVE NOT VIOLATED 10B-5, BUT THEY HAVE VIOLATED 16B DEPENDING ON THE TIMING OF THEIR TRADES

D. CHRIS AND FRED HAVE VIOLATED RULE 10B-5 BY TRADING ON NONPUBLIC INFORMATION

YOUR CLIENT IS IN A 31% FEDERAL TAX BRACKET AND PAYS A STATE TAX RATE OF 7%. HIS BEST AFTER-TAX RETURN WILL COME FROM:

A. GOVERNMENT BONDS YIELDING 6.7%

B. CORPORATE BONDS YIELDING 7%

C. MUNICIPAL REVENUE BONDS YILEDING 5.1%

D. MUNICIPAL GENERAL OBLIGATION BONDS YILEDING 4.9%

WHICH OF THE FOLLOWING STRATEGIES WILL RESULT IN THE MOST TAX-EFFECIENT CONVERSION OF A TRADITIONAL IRA TO A ROTH IRA?

A. ESTABLISHING A ROTH 401(K) AND CONTRIBUTING ONLY TO IT IN ALL FUTURE YEARS

B. CONVERTING THE ENTIRE TRADITIONAL IRA TO THE ROTH IRA IN ONE YEAR, REGARDLESS OF THE TAXPAYER'S ANNUAL INCOME

C. ELECTING A PARTIAL CONVERSION OF THE TRADITIONAL IRA TO THE ROTH IRA EACH YEAR IN WHICH THE TAXPAYER'S INCOME IS LOW

D. TAKING A LUMP-SUM DISTRIBUTION FROM THE TRADITIONAL IRA, PAYING THE ORDINARY INCOME TAXES ON THE DISTRIBUTION, AND THEN ESTABLISHING A ROTH IRA WITH THE NET PROCEEDS

A FORM OF JOINTLY OWNED PROPERTY THAT CAN ONLY BE HELD BETWEEN HUSBAND AND WIFE IS

A. JOINT TENANCY WITH RIGHT TO SURVIVORSHIP

B. TENANCY BY THE ENTIRETY

C. TENANCY IN COMMON

D. QUALIFIED TERMINABLE INTEREST PROPERTY

ON HIS DEATH, PETER'S ESTATE IS VALUED AT MORE THAN $5,000,000. IT CONSISTS OF REAL ESTATE, STOCKS, BONDS, A ROLLOVER IRA, LIFE INSURANCE PAYABLE  TO HIS ESTATE, SERIES E SAVINGS BONDS, AND AN INTEREST IN A TESTEMENTARY TRUST ESTABLISHED BY HIS GREAT AUNT IN 1949 WHICH TERMINATED WITH HIS DEATH. WHICH OF THE FOLLOWING RECEIPTS WILL BE CONSIDERED IRD?

A. PROCEEDS FROM THE SALE OF THE REAL ESTATE

B. PROCEEDS FROM THE LIFE INSURANCE  RECEIVED BY THE ESTATE

C. PAYMENTS FROM THE IRA AND THE SAVINGS BONDS

D. INTEREST AND DIVIDENDS FROM THE STOCK AND BONDS PORTFOLIOS

A 30 YR OLD TAXPAYER HAS $60,000 IN A QUALIFIED RETIREMENT PLAN, THAT INCLUDES $10,000 OF EMPLOYEE AFTER-TAX CONTRIBUTIONS. IF THE TAXPAYER TAKES A PREMATURE DISTRIBUTION OF THE ENTIRE BALANCE, WHAT AMOUNT OF THE DISTRIBUTION WILL BE SUBJECT TO EXCISE PENALTY, AND AT WHAT RATE?

AMOUNT          RATE

A.  $50,000         10%

B.  $50,000          15%

C.  $60,000           10%

D.  $60,000              15%

THOMAS WAS ADMITTED TO A NURSING HOME FIVE YEARS AGO.  HE HAS NO SURVIVING FAMILY, BUT A LIFELONG FRIEND DOES PERSONAL ERRANDS AND VISITS ON A REGULAR BASIS.  IN THE LAST YEAR, THOMAS WROTE OCCASSIONAL CHECKS TOTALING $13,000 TO HIS FRIEND AS AN EXPRESSION OF GRATITUDE.  HOW SHOULD THESE TRANSACTIONS BE REPORTED TO THE IRS?

A.  GIFT TAX RETURN

B.  FORM 1099

C.  SCHEDULE H

D.  SCHEDULE K-1

MARGARET DIED OWNING 1000 SHARES OF JOHNSON & JOHNSON STOCK. SHE DIED AFTER A DIVIDEND WAS DECLARED AND AFTER THE RECORD DATE, BUT BEFORE THE PAYABLE DATE.  WHICH OF THE FOLLOWING WILL BE INCLUDED IN MARGARET'S GROSS ESTATE?

A.  STOCK ONLY

B.  DIVIDEND ONLY

C. BOTH STOCK AND DIVIDEND

D. NEITHER STOCK OR DIVIDEND

A PERSON'S PROBATE ESTATE WILL INCLUDE WHICH OF THE FOLLOWING ASSETS?

A. $15,000 CD IN HIS OWN NAME

B.  $40,000 LAND OWNED WITH BROTHER HELD AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP

C. $100,000 LIFE INSURANCE POLICY

D. $200,000 HOME HELD IN TENANCY BY ENTIRELY

WHICH OF THE FOLLOWING POWERS OF APPOINTMENT DESCRIBES THE RIGHT GRANTED TO A BENEFICIARY UNDER THE CRUMMEY TRUST PROVISION?

A.  LIMITED

B. GENERAL

C.  TESTAMENTARY

THE FUNCTION OF A WAIVER-OF-PREMIUM RIDER TO A LIFE INSURANCE POLICY TO:

A.  PERMIT THE POLICYHOLDER TO VARY THE AMOUNT OF LIFE INSURANCE PREMIUM PAID IN THE EVENT OF DISABLILTY

B.  PROVIDE FOR PAYMENT OF THE PREMIUM OUT OF THE POLICY LOAN VALUE, IF THE POLICYHOLDER FAILS TO PAY PREMIUMS WHEN DUE

C. PROVIDE DIABILITY INCOME INSURANCE EQUIVALENT TO THE AMOUNT OF LIFE INSURANCE PREMIUM IN THE EVENT OF DISABILITY

D.  PAY THE PREMIUM FOR THE POLICYHOLDER WHO FAILS TO PAY IT WITHIN THE TIME ALLOWED

DAVE HAD $12,500 IN CAPITAL GAINS AND $17,400 IN CAPITAL LOSSES.  IN THE CURRENT YEAR, HOW MUCH OF THE CAPITAL LOSSES CAN HE USE TO OFFSET HIS ORDINARY INCOME WHEN CALCULATING INCOME TAXES?

A.  $3,000

B.  $3,900

C.  $4,000

D.  44,900

WHICH OF THE FOLLOWING TAX PREFERENCE ITEMS OR ADJUSTMENTS IN NOT ELIGIBLE TO BE USED AS A DEDUCTION IN CALCULATING THE ALTERNATIVE MINIMUM TAX CREDIT?

A.  PERSONAL INFORMATION

B.  STATE AND LOCAL TAXES

C.  BARGAIN ELEMENT OF INCENTIVE STOCK OPTIONS

D.  APPRECIATED VALUE OF CERTAIN CHARITABLE GIFTS

AN INVERTED YIELD CURVE MEANS THAT LONG-TERM INTEREST RATES:

A.  ARE HIGHER THAN SHORT-TERM INTEREST RATES

B.  ARE LOWER THAN SHORT-TERM INTEREST RATES

C.  ARE THE SAME AS SHORT-TERM INTEREST RATES

D.  HAVE RISEN RELATIVE TO SHORT-TERM INTEREST RATES

WHICH OF THE FOLLOWING POWERS CAN BE DELEGATED TO AN ATTORNEY-IN-FACT UNDER A PROPERLY WRITTEN POWER OF ATTORNEY?

A.  FILE FOR LEGAL SEPERATION

B.  VOTE IN A PUBLIC ELECTION

C.  CONTINUE AN ANNUAL GIFTING PLAN

D.  PERFORM A PERSONAL SERVICES CONTRACT

ON APRIL 1, 2008, A 6% CHARITABLE REMAINDER UNITRUST WAS ESTABLISHED WITH SECURITIES VALUED AT $600,000.  ON DECEMBER 31, 2008, THE TRUST IS VALUED AT $700,000. THE TRUST GENERATES $30,000 OF DIVIDENDS AND $10,000 OF CAPTIAL GAINES IN 2008.  IF THE PAYOUT IS BASED ON BEGINNING OF YEAR VALUES, WHAT IS THE APPROXIMATE PROPORTIONAL PAYOUT FOR 2008?

A.  $27,000

B.  $31,000

C.  $36,000

D.  $42,000

THE MOST APPROPRIATE INVESTMENT PRODUCT FOR USE AS AN EMERGENCY FUND IS:

A.  MONEY MARKET ACCOUNTS

B.  US TREASURY NOTES

C.  AAA-RATED CORPORATE BONDS

D.  UTILITY STOCKS

JOE AND ANNE ARE INCOME BENEFICIARIES OF A TRUST UNDER THEIR MOTHER'S WILL.  EACH YEAR THE TRUSTEE MUST DISTRIBUTE ALL INCOME TO JOE AND ANNE IN EQUAL SHARES.  CORPUS CANNOT BE INVADED.  THE AMOUNT OF THE EXEMPTION DEDUCTED ON THE TRUST'S INCOME TAX RETURN IS:

A.  $0

B.  $100

C.  $300

D.  $600

C.  $300

RETIREMENT PLANS THAT PROVIDE SPECIFIC BENEFITS FOR EACH PARTICIPANT AT RETIREMENT ARE KNOWN AS:

A.  401(k)

B.  MONEY-PURCHASE

C.  DEFINED-BENEFIT

D. DEFINED-CONTRIBUTION

C.  DEFINED-BENEFIT

SHELLY IS LOOKING FOR INVESTMENT GRADE BONDS.  THE LOWEST MOODY'S RATING THAT QUALIFIED AS INVESTMENT GRADE IS:

A. AA

B.  BB

C.  BBB-

D.  BBB

D.  BBB

FRANK IS THE SOLE BENEFICIARY OF TRUST B, WHICH IS CLASSIFIED FOR TAX PURPOSES AS A SIMPLE TRUST.  ACCOUNTING INCOME FOR 2008 TOTALED $17,000, AND TAXABLE DNI WAS $13,000.  FRANK RECEIVED $7,500 IN DISTRIBUTIONS FROM THE TRUST DURING 2008.  FRANK WILL BE TAXED ON:

A.  $0

B.  $7,500

C.  $13,000

D.  $17,000

WHICH OF THE FOLLOWING LISTS INVESTMENTS IN THE ORDER OF HIGHEST LIQUIDITY TO LOWEST LIQUIDITY?

HIGHEST LIQUIDITY----------->LOWEST LIQUIDITY

A.  SAVINGS ACCOUNT, US GOVERNMENT SECURITIES, COMMON STOCK, REAL ESTATE

B.  COMMON STOCK, REAL ESTATE, US GOVERNMENT SECURITIES, SAVINGS ACCOUNT

C.  US GOVERNMENT SECURITIES, SAVINGS ACCOUNT, COMMON STOCK, REAL ESTATE

D.  REAL ESTATE, COMMON STOCK, SAVINGS ACCOUNT, US GOVERNMENT SECURITIES

A.  SAVINGS ACCOUNT, US GOVERNMENT SECURITIES, COMMON STOCK, REAL ESTATE

A RETIREE IN 2009 MAY EARN AN UNLIMITED AMOUNT OF COMPENSATION WITHOUT ANY LOSS OF SOCIAL SECURITY BENEFITS IF HE OF SHE IS:

A.  BETWEEN THE AGES OF 62 AND 65

B.  AGE 62 OR OLDER

C.  AGE 65 OR OLDER

D.  FRA OR OLDER

E.  AGE 70 OR OLDER

D.  FRA OR OLDER

A PREFERRED STOCK THAT IS ENTITLED TO DIVIDENDS IN ARREARS IS KNOWN AS:

A.  CONVERTIBLE

B.  CUMULATIVE

C.  EXTENDABLE

D. PARTICIPATING

B.  CUMULATIVE

WHEN THERE ARE FREQUENT WITHDRAWALS OF FUNDS FROM A PORTFOLIO, THE BEST MEASURE OF THE BOND PORTFOLIO MANAGER'S PERFORMANCE IS:

A.  BENCHMARK YIELD

B.  REALIZED COMPOUND YIELD

C.  DOLLAR-WEIGHTED RETURN

D.  TIME-WEIGHTED RETURN

D.  TIME-WEIGHTED RETURN

WHICH OF THE FOLLOWING TYPES OF INSURANCE COVERS LOSS OF MONEY, SECURITIES, OR PROPERTY DIRECTLY RESULTING FROM A DISHONEST ACT OF A COMPANY EMPLOYEE?

A.  WARRANTY

B.  MALPRACTICE

C.  SURETY BOND

D.  FIDELTY BOND

HEDGE FUNDS DIFFER FROM TRADITIONAL MUTUAL FUNDS IN THAT HEDGE FUNDS ARE MORE LIKELY TO:

A.  SELL SHORT

B. HAVE MULTIPLE INVESTORS

C.  DIVERSIFY

D.  TRADE ON AN EXCHANGE

ELLEN IS A 58 YR OLD SINGLE SELF-EMPLOYED ACCOUNTANT EARNING $75,000 PER YEAR.  SHE OWNS HER OWN HOME THAT IS WORTH $300,000.  SHE HAS A $100,000 MORTGAGE ON HER HOME.  ELLEN'S NET WORTH IS $750,000.  HER MONTHLY CASH FLOW IS POSITIVE, AFTER CONTRIBUTING THE MAXIMUM TO HER RETIREMENT PLAN.  ELLEN HAS NO CHILDREN OR OTHER DEPENDENTS.  WHICH OF THE FOLLOWING TYPES OF INSURANCE IS LEAST LIKELY TO BE APPROPRIATE FOR HER?

A. LIFE

B.  DISABILITY

C.  LONG-TERM CARE

D.  ERRORS AND OMISSIONS

WHICH OF THE FOLLOWING EXPENSES IS DEDUCTIBLE AS A CHARITABLE CONTRIBUTION?

A.  VALUE OF VOLUNTEER WORK PERFORMED FOR CHARITIES

B. AN OUTRIGHT CONTRIBUTION TO A FORIEGN CHARITABLE ORGANIZATION

C.  OUT OF POCKET UNREIMBURSED EXPENSES INCURRED IN THE COURSE OF VOLUNTEER WORK

D.  APPRAISAL FEES NECESSARY TO SUBSTANTIATE THE DEDUCTION OF NON-CASH CHARITABLE CONTRIBUTIONS OVER $5,000

ITEMIZED DEDUCTIONS ON IRS FORM 1040 REDUCE TAXES BY:

A.  DECREASING THE AGI

B.  ADJUSTING FOR WITHHOLDINGS

C. DEFERRING INCOME RECOGNITION

D. OFFSETTING TAXES PAYABLE ON A DOLLAR-FOR-DOLLAR BASIS

THE CHINESE WALL CAN BEST BE DESCRIBED AS PROHIBITING:

A.  ACCESS TO THE PERSONAL CREDIT FILES OR SENIOR OFFICERS OF A CORPORATE CUSTOMER

B.  INVESTMENT OFFICERS FROM DISCLOSING TO COMMERCIAL BANKERS THE DETAIL OF PORTFOLIO TRANSACTIONS

C.  DISCLOSURE OF MATERIAL NONPUBLIC INFORMATION ON PUBLICLY TRADED COMPANIES BETWEEN COMMERCIAL BANKERS AND OTHER BANK EMPLOYEES

YOUR BANK IS NAMED CO-TRUSTEE WITH TWO BROTHERS OF A DECEASED TRUSTOR ON A DISCRETIONARY IRREVOCABLE TRUST.  THE TRUST AGREEMENT REQUIRES UNANIMOUS CONSENT OF THE CO-TRUSTEES FOR ANY ACTIONS.  IT IS INCREASINGLY  DIFFICULT TO TAKE TIMELY ACTIONS ON INVESTMENTS.  REQUESTS FOR DISTRIBUTIONS ARE BECOMING MORE FREQUENT.  TO MINIMIZE THE DELAYS, YOUR BANK SHOULD:

A.  REQUIRE THAT THE BROTHERS RESIGN AS CO-TRUSTEES

B. SEEK AUTHORIZATION FOR DISCRETIONARY DISTRIBUTIONS WITHIN A SPECIFIED RANGE AND HAVE THE CO-TRUSTEES DELEGATE THEIR INVESTMENT RESPONSIBILITIES

C.  PROCEED WITH ALL INVESTMENT

WHERE THERE ARE CO-TRUSTEES, LIABILITY FOR DAMAGES FOR BREACH OF TRUST IS:

A.  JOINT AND SEVERAL AMONG THE TRUSTEES

B.  PROPORTIONAL TO THE BLAME BORNE BY EACH TRUSTEE

C.  IMPOSED ON ONLY ONE TRUSTEE WHO MAY SEEK CONTRIBUTION FROM THE OTHERS FOR SHARED BLAME

D.  LIMITED TO THE TRUSTEE HOLDING THE ASSETS

IF INVESTORS EXPECT INTEREST RATES TO INCREASE THEY WILL

A.  LADDER BOND MATURITIES

B.  DECREASE DURATION

C.  INCREASE DURATION

D.  BUY ALL LONG-TERM BONDS

THE TYPICAL DUTIES OF THE GUARDIAN OF AN ESTATE INCLUDE ALL OF THE FOLLOWING EXCEPT:

A.  EXECUTING CONDICILS TO THE WARD'S WILL

B.  PAYING FOR SPECIALIZED MEDICAL CARE

C. MANAGING THE WARD'S INCOME-PRODUCING REAL PROPERTY

D.  MEETING WITH THE WARD'S PERSONAL GUARDIAN TO DEVELOP A BUDGET

WHICH OF THE FOLLOWING IS CONSIDERED THE PARAMOUNT DUTY OF THE TRUSTEE?

A.  LOYALTY

B. IMPARTIALITY

C.  MAKING THE TRUST'S ASSETS PRODUCTIVE

D.  ACTIVELY PARTICIPATING IN THE TRUST'S ADMINISTRATION

IF AN UNMARRIED INDIVIDUAL RETIRES AT AGE 65 WITH A 20 YR LIFE EXPECTANCY AND AN ANNUAL LIVING EXPENSE BUDGET OF $30,000 SUBJECT TO A 5% INFLATION RATE, WHAT WILL BE THE AGGREGATE AMOUNT OF FINANCIAL RESOURCES EVENTUALLY CONSUMED TO MEET THIS INDIVIDUAL'S TOTAL ECONOMIC NEEDS?

A.  $600,000

B.  LESS THAN $600,000

C.  MORE THAN $600,000

D.  DEPENDS ON THE INDIVIDUAL'S MARGINAL TAX RATE

A COMPREHENSIVE PERSONAL LIABILITY POLICY (I.E., UMBRELLA) PROVIDES COVERAGE FOR LEGAL LIABILITY RESULTING FROM:

A.  NEGLIGENT ACTS

B.  PROFESSIONAL MISTAKES OF ERRORS

C.  CLAIMS OF CATASTROPHIC PROPORTIONS

D.  INCIDENCES ON THE INSURED'S PREMISES

DEFINED-BENEFIT PENSION PLANS

A.  ARE REPLACING DEFINED-CONTRIBUTION PLANS IN POPULARITY TODAY

B.  PLACE MORE RISK ON THE EMPLOYER

C.  ARE POPULAR WITH EMPLOYERS BECAUSE THEY PLACE ALL RISK ON THE EMPLOYEE.

D.  ARE NOT SUBJECT TO THE RULES OF THE 1974 ERISA

WHEN THE FEDERAL RESERVE SEEKS TO CONTRACT THE MONEY SUPPLY, WHAT ACTIONS DOES IT TAKE WITH REGARD TO SECURITIES AND RESERVE REQUIREMENTS, RESPECTIVELY?

SECURITIES               RESERVE REQUIREMENTS

A.   SELLS                     LOWERS

B.    SELLS                  RAISES

C.   BUYS                    LOWERS

D.    BUYS                  RAISES

B.    SELLS                  RAISES

WHICH OF THE FOLLOWING ITEMS IS DEDUCTIBLE, AT THE DISCRETION OF THE EXECUTORS, ON EITHER THE FEDERAL ESTATE TAX RETURN OR ON THE ESTATE'S IRS FORM 1041?

A.  FUNERAL EXPENSES

B. DECEDENT'S MEDICAL EXPENSES PAID AFTER DEATH

C. ATTORNEY'S FEES FOR PRE-DEATH SERVICES

D.  ATTORNEY'S FEES IN CONNECTION WITH THE ESTATE'S ADMINISTRATION

WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF A COMPLEX TRUST?

A.  ALLOWS FOR CHARITABLE CONTRIBUTIONS

B.  RECEIVES AN ANNUAL INCOME EXEMPTION OF $100

C.  REQUIRES ALL INCOME TO BE DISTRIBUTED TO THE INCOME BENEFICIARIES

D.  ORDINARY INCOME REPORTABLE BY THE BENEFICIARY OR TRUST

THE ________ IS A MEASURE OF THE DEGREE TO WHICH RETURNS OF TWO ASSETS MOVE TOGETHER.

A.  NASDAQ

B.  STANDARD DEVIATION

C.  CORRELATION COEFFICIENT

D.  SEMI-VARIANCE

ONE DIFFERENCE BETWEEN A CHARITABLE REMAINDER UNITRUST AND A CHARITABLE REMAINDER ANNUITY IS THAT IN AN ANNUITY TRUST:

A.  A PAYOUT IS BASED ON A SET NUMBER OF YEARS; A UNITRUST PAYOUT IS BASED ON LIFE EXPECTANCY.

B.  INVESTMENT IN TAX-EXEMPT SECURITIES IS NOT ALLOWED; IT IS ALLOWED IN A UNITRUST

C.  THE PAYOUT FLUCTUATES ANNUALLY; A UNITRUST PAYOUT REMAINS CONSTANT

D.  ADDITIONS CANNOT BE MADE; THEY CAN BE MADE TO A UNITRUST

WHICH OF THE FOLLOWING IS A PERMISSIBLE IRA INVESTMENT?

A. STAMPS

B. ART COLLECTIONS

C. PERSONAL RESIDENCE

D. LIMITED PARTNERSHIPS

TO RECIEVE SOCIAL SECURITY DISABILITY PAYMENTS, A COVERED WORKER MUST BE:

A. UNABLE TO ENGAGE IN SUBSTANTIALLY GAINFUL WORK OR EMPLOYMENT IN HIS OCCUPATION

B. UNABLE TO ENGAGE IN SUBSTANTIALLY GAINFUL WORK OF EMPLOYMENT IN ANY OCCUPATION

C. DISABLED FOR ONE YEAR BEFORE BENEFITS WILL COMMENCE

D. DISABLED FOR SIX MONTHS BEFORE BENEFITS WILL COMMENCE

YOUR CLIENT DIED IN NOVEMBER. AFTER PREPARATION OF THE FINAL INCOME TAX RETURN, YOU NOTICE THAT THE CLIENT HAS AN UNUSED CHARITABLE CONTRIBUTION CARRY FORWARD OF $10,000.  THIS CARRY FORWARD:

A.  IS LOST

B.  CAN BE CARRIED BACK FOR THREE YEARS

C.  IS DEDUCTED ON THE FEDERAL ESTATE TAX RETURN (FORM 706)

D. CAN BE USED AS A DEDUCTION ON THE ESTATE'S INCOME TAX RETURN (FORM 1041)

SARA SET UP A $50,000 TRUST FUND TODAY.  THE TRUST PROVIDES A YEARLY PAYMENT OF 6% OF THE VALUE OF THE PROPERTY, WHICH IS REVALUED EACH YEAR.  WHEN SHE DIES, THE PROPERTY THAT IS IN THE TRUST GOES TO HOFSTRA UNIVERSITY.  WHICH OF THE FOLLOWING TYPES OF THE TRUSTS HAS SHE CREATED?

A.  GRANTOR

B. TESTAMENTARY

C. CHARITABLE REMAINDER UNITRUST

D. CHARITABLE REMAINDER ANNUITY

IN TERMS OF CAPM, WHICH OF THE FOLLOWING IS TRUE?

A. BETA (B) LESS THAN 1.0 IS AN AGGRESSIVE STOCK

B.  BETA (B) GREATER THAN 1.0 IS A DEFINSIVE STOCK

C. BETA (B) EQUAL TO 0 IS MARKET NEUTRAL

D. BETA (B) GREATER THAN 1.0 IS AN AGRESSIVE STOCK

TAXPAYER DIED IN MARCH OF YEAR 2, PRIOR TO FILING A RETURN FOR YEAR 1. WHICH OF THE FOLLOWING INCOME TAX RETURNS MUST BE FILED ON BEHALF OF THE TAXPAYER?

A. PERSONAL   YEAR 1 ONLY

B.  PERSONAL   YEAR 2 ONLY

C.  PERSONAL YEAR 1 AND FIDUCIARY YEAR 2

D.  PERSONAL AND FIDUCIARY YEAR 1 AND YEAR 2 YEAR 2

THREE INDIVIDUALS OWN A PIECE OF UNIMPROVED, VACANT REAL PROPERTY THEY EACH CONTRIBUTED AN EQUAL AMOUNT TO THE PURCHASE.  IF ONE DIES FIRST, THE PROPERTY DOES NOT AUTOMATICALLY PASS TO THE REMAINING TWO OWNERS.  THIS FORM OF PROPERTY OWNERSHIP IS KNOWN AS:

A.  JOINT TENANCY

B.  COMMUNITY PROPERTY

C.  TENANCY IN COMMON

D.  TENANCY BY THE ENTIRETY

WHICH OF THE FOLLOWING IS AN INSURED PERIL UNDER A STANDARD HOMEOWNER'S POLICY THAT PROVIDES "ALL RISK" COVERAGE?

A.  NUCLEAR EXPLOSION

B.  EARTHQUAKE

C.  CIVIL UNREST

D.  VANDALISM

IN AN ECONOMIC ENVIRONMENT THAT DIPS INTO A MILD RECESSION, WHICH OF THE FOLLOWING TYPES OF STOCK IS GENERALLY EXPECTED TO PERFORM BEST?

A.  AUTO MANUFACTURING

B.  FOOD DISTRIBUTION

C.  COMPUTER SOFTWARE

D. PAPER AND FORREST PRODUCTS

OCCASIONALLY, A TRUST PROFESSIONAL MAY NEED TO APPLY THE "RULES OF CONSTRUCTION" WITH RESPECT TO AN IRREVOCABLE DOCUMENT. THE PURPOSE OF THIS CONCEPT IS TO:

A.  AMEND THE TRUST DOCUMENT

B.  UTILIZE VIRTUAL REPRESENTATION

C. DETERMINE THE GRANTOR'S INTENT

D.  INCORPORATE BY REFERENCE ALL OF THE TRUST'S SUBSEQUENT AMENDMENTS

HOW MUCH TIME IS GENERALLY ACCEPTED AS THE "TIME LAG" BEFORE A CHANGE IN MONETARY POLICY IS REFLECTED IN THE BROAD ECONOMY?

A.  IMMEDIATELY

B.  LESS THAN 3 MONTHS

C.  18 MONTHS

D.  40 MONTHS

A PLANNING STRATEGY FOR AN INDIVIDUAL TO AVOID THE POTENTIAL APPLICATION OF THE ALTERNATIVE MINIMUM TAX IS TO:

A.  ACCELERATE INCOME AND EXPENSES

B.  ACCELERATE INCOME, BUT DEFER EXPENSES

C.  DEFER INCOME AND EXPENSES

D.  DEFER INCOME, BUT ACCELERATE EXPENSES

DISTRIBUTIONS FROM WHICH OF THE FOLLOWING CANNOT BE ROLLED OVER INTO AN IRA?

A.  401(K)

B. MONEY PURCHASE PENSION PLAN

C.  PROFIT SHARING PLAN

D. RABBI TRUST

JOHN CREATED A TRUST WITH INCOME DURING LIFE TO SAM, THE REMAINDER TO SUE.  JOHN RETAINS THE RIGHT TO AMEND OR REVOKE THE AGREEMENT.  SUE WILL HAVE TO DISCLAIM HER INTEREST IN THE TRUST WITHIN 9 MONTHS OF:

A.  JOHN'S DEATH

B.  SAM'S DEATH

C.THE CREATION OF THE TRUST

D. THE APPT OF THE EXECUTOR OR ADMINISTRATOR OF SAM'S ESTATE

YOU ARE EMPLOYED AS A TRUST OFFICER OF A NATIONAL BANK.  THE HOME OFFICE IS PART OF THE SYNDICATE THAT UNDERWRITES AN MBIA-INSURED MUNICIPAL BOND ISSUE THAT IS PAYING A MARKET RATE OF INTEREST.  IF YOU PURCHASE THIS BOND FOR A DISCRETIONARY TRUST ACCOUNT THAT NEEDS THIS TYPE OF INVESTMENT, YOU HAVE:

A.  USED INSIDER INFORMATION

B. COMPILED WITH THE PRUDENT PERSON STANDARD

C. BREACHED THE TRUSTEE DUTY OF LOYALTY AND CREATED A CONFLICT OF INTEREST

D. MADE AN APPROPRIATE INVESTMENT WITH NO POTENTIAL LEGAL RAMIFICATIONS TO YOUR HOLDING COMPANY/BANK