Correct Answer: A

Explanation: Given the same maturity, the debenture issued by Abbott Laboratories would be expected to offer the highest yield -to-maturity. It is unsecured debt offered by a corporation and is the riskiest of the four choices. Bonds issued by the U.S. government and by U.S. government agencies are considered to be free of default-risk and would have lower yields to reflect this. The general obligation bond offered by the state of Massachusetts pays interest that is free from federal taxation and will have a lower yield because of this feature.

Correct Answer: C

Explanation: Choice C correctly ranks the entities with regard to the priority of their claims on the firm in the event of bankruptcy, from the highest priority to the lowest priority. Secured bondholders get paid first, then debenture (unsecured bond) holders, followed by preferred shareholders. Common shareholders come in last.

Correct Answer: D

Explanation: The dividends distributed by real estate investment trusts are taxed as ordinary income. Dividends on all of the other choices are subject to preferential tax treatment under current tax laws.

Correct Answer: A

Explanation: The Roth IRA allows the contributor to withdraw both his earnings and contributions tax-free if the Roth IRA has been in existence for at least 5 years and the contributor has reached the age of 59 ½. In all of the other choices, only non-tax-deductible contributions may be withdrawn tax-free.

Correct Answer: C

Explanation: The Roth IRA does not have the requirement that its participants must begin withdrawing funds from the plan by April 1st of the year after they turn 70 ½. The Roth IRA does, however, have a mandatory distribution requirement that goes into effect if the participant dies.

Correct Answer: C

Explanation: Only Selections I and III are correct. The PowerPoint slides that are being used at a financial planning seminar fall under the definition of sales literature and, as such, must be signed and dated by a registered principal of Total Investments and must be maintained in a separate file by Total for three years after the date of their first use. Sales literature must also be filed with FINRA within 10 business days of first use, but not prior to the first use, unless it concerns bond volatility ratings.

Correct Answer: A

Explanation: Invesco Utilities Fund profile suggests that the fund is a sector fund, which is a specialized fund that invests mainly in stocks within a specific industry. This does not mean that it is non -diversified. As long as it is invested in a portfolio of securities with a value exceeding 75% of its assets such that no more than 5% is invested in any one firm and no more than 10% of any firm's voting stock is owned, it is considered to be a diversified management company.

Correct Answer: C

Explanation: Redemption fees are not included in calculating the expense ratio of a mutual fund. Redemption fees are incurred by the fund shareholders when they redeem their shares of the fund. All of the other expenses represent annual expenses that the fund incurs and are, therefore, included in calculating the expense ratio of a mutual fund.

Correct Answer: C

Explanation: The Investment Company Act of 1940 regulates the organizational structure and day-to-day operations of investment companies. The Act includes requirements regarding a fund's capital structure, the custody of its assets, its investment activities, and the duties of a fund's board of directors, among other things. The Securities Act of 1933 regulates the offering of a fund's shares and requires that prospective investors be provided with a prospectus. The Securities Exchange Act of 1934 regulates secondary market activities in investment company shares and includes laws governing the principal underwriters and brokers and dealers who sell investment company shares. The Investment Advisers Act of 1940 regulates investment advisers and includes laws pertaining to their registration and recordkeeping, custodial, and reporting responsibilities.

Correct Answer: D

Explanation: None of the choices provided is a true statement about the mortality guarantee of a variable annuity contract. The mortality guarantee guarantees that you can receive a monthly check for as long as you live, but it does not guarantee that the check will be for a specified amount.