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NEW QUESTION: 1
Liz is a new client of yours. She is 36 years old, single, and has been working and earning a nice salary
since her graduation from high school. She has been contributing the maximum allowed to a TSA plan
through her employer, and you have no reason to doubt that she will meet her stated goal to retire when
she is 58.She also has a good health care plan through her employer and is in excellent health. She has
been depositing her non-retirement savings in a money market fund and is not pleased at the pathetic
return she has been earning on her current balance of $140,000. Liz has been reading some articles on
the web and understands she could allocate her funds to receive a higher return. She's willing to take on a
moderate level of risk, but needs your help. She informs you that she does plan to use $40,000 of her
current savings as a down payment for a condo and that her investment goals are to have money
available for travel and for unexpected expenses and periodic purchases such as new cars and new
furniture as the needs arise. She pays taxes at the highest marginal tax rate for individual tax payers.
Based on these facts, which of the following asset allocations would best meet her needs?
I. Money market fund: 30%; investment-grade corporate bonds: 20%; blue-chip stocks: 20%; high-yield
bonds: 10%; small cap stocks: 10%; foreign stocks: 10%
II. Money market fund: 10%; investment-grade municipal bonds: 5%; blue-chip stocks: 25%; high-yield
bonds: 25%; small cap stocks: 10%; foreign stocks: 25%
III. Money market fund: 10%; investment-grade municipal bonds: 25%; growth stocks: 40%; small cap
stocks: 15%; foreign stocks: 10%
A. III
B. I
C. Either II or III would be suitable recommendations.
D. II
Answer: A
Explanation:
The portfolio described in Selection III would be the best choice for Liz. She has little need
for liquidity, so the allocation to a money market fund is only 10%. Another 40% of the allocation is in
investment-grade municipal bonds and blue-chip stocks, with only 25% allocated to the riskier asset
classes of foreign stocks and small caps. This meets her stated willingness to take on only a moderate
level of risk. The large percentage that is allocated to municipal bonds is intended to provide her with
federal tax-free interest income since she is in such a high marginal tax bracket-income that she can use
for traveling and for those unexpected and periodic expenses, perhaps. The 45% allocation to growth
stocks and small caps will also serve as a tax shield since these categories of stocks pay little, if any,
dividends that would be taxed. Liz will only have to pay tax on capital gains when she chooses to sell
these assets. The portfolio described in Selection I has far too much invested in a lower-yielding money
market fund for someone who doesn't need much liquidity. Portfolio II has 60% invested in high risk
securities-junk bonds, small caps, and foreign stocks-with a full 50% invested in junk bonds and foreign
stocks. This would be an inappropriate allocation for an investor who is willing to accept only a moderate
level of risk.

NEW QUESTION: 2

A. Option C
B. Option B
C. Option D
D. Option A
Answer: B
Explanation:
A relational chart of accounts uses an account structure that requires that you set up valid accounts and financial
dimension values, and then set up rules to specify how the accounts and dimensions will come together to create
account structures. Setting up valid combinations helps make sure that data entry is accurate.
Reference: About the Configure account structures form [AX 2012]

NEW QUESTION: 3

A. Option C
B. Option E
C. Option B
D. Option A
E. Option D
Answer: A,D

NEW QUESTION: 4

A. Option C
B. Option B
C. Option A
D. Option D
Answer: C


CCSK FAQ

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CCSK Exam Info

In case you haven’t done it yet, we strongly advise in reviewing the below. These are important resources related to the CCSK Exam.

CCSK Exam Topics

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CCSK Offcial Page

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Check what resources you have available for studying.

Schedule the CCSK Exam

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