Preview Questions Wealth Manager | Role Specific Skill

Question 1: What tax benefit does a health savings account (HSA) offer?

Which action should you take?

Choose only one option

Contributions are tax-deductible, and withdrawals for medical expenses are tax-free

It offers tax-free growth but only provides tax deductions for medical expenses

It allows for tax-free growth, but withdrawals are taxed

Contributions are taxed, but withdrawals are tax-deferred

Question 2: In a low-interest-rate environment, what is an effective strategy for maintaining portfolio performance?

Which action should you take?

Choose only one option

Invest in high-risk assets regardless of long-term goals

Increase exposure to equities, alternative investments, and higher-yielding bonds

Reduce equity exposure and focus on cash savings

Focus solely on Treasury bonds for safety

Question 3: In constructing a portfolio, how should a wealth manager address the potential impact of interest rate changes on fixed-income assets?

Which action should you take?

Choose only one option

By allocating to bonds with shorter durations to minimize interest rate risk

By investing primarily in long-term bonds to lock in high yields

By choosing floating rate bonds to hedge against rising interest rates

By avoiding fixed-income assets entirely to avoid rate risk

Question 4: What is the most effective method for managing a client's financial plan during a major life event, such as divorce or the death of a spouse?

Which action should you take?

Choose only one option

Reassess the client's goals, liabilities, and income needs in light of the new situation

Recommend withdrawing from all investments to avoid market fluctuations

Focus only on minimizing taxes and transaction costs

Continue following the original financial plan without making adjustments

Question 5: What is the role of alternative investments, such as private equity and hedge funds, in a well-diversified portfolio?

Which action should you take?

Choose only one option

Avoid alternative investments entirely and focus on traditional assets

Limit alternative investments to only those with guaranteed returns

Use them to enhance diversification, provide higher returns, and manage risk

Concentrate heavily in alternative investments for higher yield

Question 6: How does a wealth manager manage risks arising from geopolitical events impacting a client's portfolio?

Which action should you take?

Choose only one option

Use only domestic assets and avoid international investments

Diversify geographically and into industries that are less sensitive to geopolitical risks

Hold a concentrated portfolio in geopolitical hotspots to capture growth

Ignore the potential impact of geopolitical risks and focus on performance