AAMS EXAM NEWEST 2025 ACTUAL EXAM TEST

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AAMS EXAM NEWEST 2025 ACTUAL EXAM TEST

BANK| COMPLETE 450 REAL EXAM QUESTIONS AND

CORRECT DETAILED ANSWERS (VERIFIED

ANSWERS) ALREADY GRADED A+| AAMS EXAM PREP

2025 (BRAND NEW!!)

A company is planning to borrow large amounts of money to fund a major expansion. This company is increasing which type of risk?

• Market risk
• Financial risk
• Interest rate risk
• Systematic risk – Correct Answer - C

Assume you have the following portfolio:

Stock: BCD | EFG | HIJ

Weight: 40% | 25% | 35%

Beta: 1.15 | .90 | 1.05

What is the overall weighted beta for this portfolio?

A) 1.06

B) 1.12

C) 1.10

• 1.01 – Correct Answer -A 1 / 4

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pg. 2 Using the capital asset pricing model, what is the expected return for a stock where its beta is 1.20, the risk-free rate is 4%, and the market rate of return is 10%? (Set calculator for four decimal places to reduce rounding error.)

A) 11.2%

B) 8.8%

C) 16.0%

• 10.1% – Correct Answer -A

According to the investment pyramid, which one of the following sequences is correct in terms of increasing safety of principal (least to most safety of principal)?

• limited partnerships, Treasury securities, high-grade corporate bonds
• variable annuities, puts and calls, money market accounts
• futures contracts, balanced mutual funds, EE bonds
• gold, high-grade municipal bonds, growth mutual funds – Correct

Answer -C

Which one of the following is correct regarding how diversification can affect risk?

• Diversification of assets reduces unsystematic risk without

necessarily reducing return.

• Negative correlation of assets increases systematic risk with a

corresponding increase in return.

• Unsystematic risk is unaffected by diversification within an asset

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• Positive correlation of assets increases systematic risk with a

corresponding increase in return. – Correct Answer - A

A core/satellite approach to asset allocation is a combination of which two asset allocation approaches?

• Tactical/strategic
• Dynamic/efficient
• Strategic/buy and hold
• Tactical/dynamic – Correct Answer - A

Assume the following correlations between long-term government bonds

and the following asset classes:

- Small stocks: .17

- Foreign stocks: .21

- Treasury bills: -.12

- Gold: -.25

Which one of these asset classes will provide the most diversification with long-term government bonds?

• Foreign stocks
• Gold
• Small stocks
• Treasury bills – Correct Answer - B
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pg. 4 If a client has a time horizon of one to five years, in general the most appropriate asset is

• large-cap common stocks.
• short-term bonds.
• foreign stocks.
• money market mutual funds. – Correct Answer - B

Tammy invested $20,000 in a mutual fund 11 years ago. If she earns 10% compounded annually on this investment, what is the fund's value?

A) $56,788

B) $57,062

C) $55,491

• $58,760 – Correct Answer - B

Ted plans to invest $3,000 in an IRA for 18 years at the beginning of each year. He expects to earn 9% compounded annually on this investment. What will be the value of this investment under these assumptions?

A) $135,055

B) $112,351

C) $123,904

• $136,798 – Correct Answer - A

Assume you own XYZ Stock Fund, which returned 14% over the past five years. During this period, the stock market returned 12%. This fund

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