SIE: Exercise

Exercise

Answer true or false.

1. 1. _____ Records relating to the verification of identification must be kept at least three years.
2. 2. _____ Full trading authority allows a third party to trade in an account and withdraw funds from the account.
3. 3. _____ A customer’s age is required information to complete a suitability questionnaire.
4. 4. _____ After a married couple signs a joint party agreement upon opening a joint account, both parties are able to make transactions in the account without permission from the other.
5. 5. _____ A custodian is not allowed to withdraw funds from an UGMA account unless she spends the funds on the minor or reimburses herself for money spent on the minor.
6. 6. _____ Both the traditional IRA and the Roth IRA allow contributions of after-tax dollars.
7. 7. _____ An employee is limited in the amount he may contribute to a traditional IRA if he has another retirement plan account.
8. 8. _____ Traditional and Roth IRAs have similar limits on contributions and required minimum distributions
9. 9. _____ If an individual sets up a Roth IRA account at the age of 60 and withdraws earnings at the age of 62, he will not be charged a tax penalty on the withdrawal.
10. 10. _____ A working person can contribute to her non-working spouse’s IRA, as long as the couple files a joint return and the working spouse has enough earned income to cover both.

Choose the best answer.

1. 11. Ellen called her broker from her nuclear bunker on a secure line and is not too crazy about giving out information, but would like to open an account. Which of the following is not required to open a new account?
2. A. Full name
3. B. Date of birth
4. C. Social Security number or tax ID
5. D. The customer’s signature
6. 12. 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