Correct Answer: C

Explanation: A convertible feature on a bond or preferred stock gives the bondholder or the preferred stock owner the option to exchange the security he owns for shares of common stock of the firm.

Correct Answer: B

Explanation: The false statement is that the earnings on the plan's contributions remain untaxed until they are withdrawn. Earnings on non-qualified employer-sponsored retirement plans do not grow tax-deferred except for a special situation in which a sizeable forfeiture risk exists. All the other statements are true since non-qualified employer-sponsored plans are exempt from most, if not all, of ERISA's requirements.

Correct Answer: A

Explanation: A passive asset allocation strategy that involves establishing specific target percentages for the various asset classes and rebalancing only as necessary to maintain those percentages as long as the investor's investment objectives remain unchanged is called strategic asset allocation. Tactical asset allocation is an active strategy that involves trying to time the market to some extent. Dynamic asset allocation is also an active strategy in which the portfolio mix is adjusted as markets rise and fall, such that the weighting is heaviest in those asset classes that can be expected to perform well under the current economy. Interactive asset allocation is a fictitious strategy.

Correct Answer: B

Explanation: If the MaxFee Mutual Fund has a front-end load of 8.5% and a net asset value per share of $32, an investor can buy shares of the fund at its offer price of $34.97. Offer price = NAV/ (1 - % load) = $32/ (1 - 0.085) ≈ $34.97.

Correct Answer: C

Explanation: Only Selections I and IV are accurate statements. The BSA requires any financial institution to file a suspicious activity report when a possible violation of the law is suspected, and it also requires that specified information on any party sending or receiving a wire transfer of $3,000 or more be obtained and kept. The customer remains uninformed.