Series 26: Chapter 5 Practice Questions

Taken from our Series 26 Online Guide

Chapter 5 Practice Questions

1. A joint brokerage account owned by two unmarried persons in which the death of one of the owners causes his share of the assets to pass to his estate is referred to as:

A. Tenancy by the entirety

B. Joint tenants with rights of survivorship

C. Joint tenants in common

D. Transfer on death account

2. Assets in a Uniform Transfers to Minors Act account must be transferred to the minor no later than the date the minor turns which age?

A. 18

B. 21

C. The rules are different for each state

D. 30

3. Which of the following does not need to be provided when a customer opens a new account?

A. Full name

B. Date of birth

C. Social Security number or tax ID

D. The customer’s signature

4. John decides to donate $12,000 worth of stock to his 10-year-old nephew Ralph’s UGMA account. As Ralph gets older, however, Ralph begins to exhibit increasingly irresponsible behavior. John goes to his broker and asks him to remove the stock from Ralph’s custodial account. His broker tells him that:

A. The current market value of the stock can be removed from the account.

B. The stock cannot be removed from the account.

C. Only stock in the amount of the original gift can be removed, and all growth must stay in the account.

D. The stock can be removed with a court order.

5. Josh has decided to open an UGMA account for his 8-year-old daughter. He hopes that when she turns 18, she will use the earnings to pay for college. He has decided that he will be the custodian for the account. Which of the following actions is he permitted to do with the account?

I. Invest in his friend’s new biotech company.

II. Give an annual $1,000 contribution to the account.

III. Withdraw his last contribution from her account because he needs the money to pay for his own dental work.

IV. Invest a portion of the account into a mutual fund that his investment adviser recommended.

A. II and III

B. I and

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Solomon Exam Prep Study Materials for the Series 26
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