Q5. Are Weatherford’s statements concerning the description of a completion fund and identifying its advantage correct?

          Description
of a completion fund              Identifying its advantage

A)   Incorrect                                Correct

B)   Correct                                  Incorrect

C)   Correct                                  Correct

Q6. Are the statements of Lee and Weatherford concerning the effectiveness of various account structures correct?

          Lee                                       Weatherford

A)   Correct                                  Incorrect

B)   Incorrect                                Incorrect

C)   Incorrect                                Correct

Q7. Are the statements of Lee and Weatherford concerning investment goals as specified in behavioral finance correct?

          Lee                                       Weatherford

A)  Incorrect                                  Incorrect

B)  Incorrect                                  Correct

C)  Correct                                    Correct

答案和详解如下：

Q5. Are Weatherford’s statements concerning the description of a completion fund and identifying its advantage correct?

          Description
of a completion fund              Identifying its advantage

A)   Incorrect                                Correct

B)   Correct                                  Incorrect

C)   Correct                                  Correct

Correct answer is B)

Weatherford correctly describes a completion fund. In a completion fund, the individual invests in a target portfolio that excludes firms in her current stock’s industry. The target portfolio provides for diversification. Weatherford is incorrect, however, in describing an advantage of a completion fund. To raise the funds to invest in a completion fund, the individual borrows funds against his or her stock or uses the dividends from his or her current stock. In the former case, the increased leverage increases the investor’s risk. In the latter case, obtaining the funds necessary to invest in the completeness fund may take substantial time.

Q6. Are the statements of Lee and Weatherford concerning the effectiveness of various account structures correct?

          Lee                                       Weatherford

A)   Correct                                  Incorrect

B)   Incorrect                                Incorrect

C)   Incorrect                                Correct

Correct answer is A)

Lee is correct. Variable life insurance products offer efficient tax minimization and time horizons that match the individual’s life expectancy. Investor access depends on the type of policy. Weatherford is incorrect. Although foundations usually have an infinite life, they do offer efficient tax minimization for individuals who wish to transfer funds to charities.

Q7. Are the statements of Lee and Weatherford concerning investment goals as specified in behavioral finance correct?

          Lee                                       Weatherford

A)  Incorrect                                  Incorrect

B)  Incorrect                                  Correct

C)  Correct                                    Correct

Correct answer is C)

Lee is correct. In behavioral finance, investment goals are specified in terms of the terminal dollar value and the probability of not meeting that goal, as opposed to traditional finance where the parameters are the expected return and standard deviation. Weatherford is correct. Behavioral finance recognizes that investors tend to think of investment goals in isolation from one another, which is a mental accounting approach.

Thank you!