Certified Employee Benefit Specialist (CEBS) Retirement Plans Associate (RPA) 2 Practice Exam

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• What is crucial for effective performance measurement?
• What is the typical size of a Retirement Plan Committee?
• Defensive stocks are typically issued by what type of companies?
• What does a fixed annuity primarily offer its holders?
• What is required of participants before they can apply for a hardship withdrawal?
• What is the first step in effective performance measurement?
• What does the internal rate of return allow sponsors to determine?
• What is one key consideration when evaluating Target Date Funds (TDFs)?
• What is a primary role of the Retirement Plan Committee?
• Which document confirms the tax-qualified status of a retirement plan?
• When is the Summary Annual Report due?
• Which of the following could change due to the aging workforce within Age-Weighted Profit Sharing Plans?
• Covariance between securities is essential for analyzing what aspect of a portfolio?
• Which aspect of investment process can measuring it alter?
• What is the primary purpose of the Pension Protection Act?
• What do soft-dollar arrangements typically involve?
• Which financial instrument typically has the least default risk?
• What is a characteristic of static-allocation funds?
• What defines hybrid retirement plans?
• What does the PPA provision for pension plans primarily support?
• What is the role of legal and regulatory compliance in employee benefits?
• What does the equity risk premium reflect?
• What is a key characteristic of a variable annuity?
• Why do pension plans choose mutual funds?
• What statistical approach does the Capital Asset Pricing Model primarily use?
• Which option describes the purpose of annuity payment options?
• According to older studies, how many stocks are generally needed for proper diversification?
• What characterizes growth stocks?
• What is the purpose of a benefits statement?
• What is the time frame for issuing a Summary Plan Description after an employee enters the plan?
• What is the fundamental principle of comprehensive diversification?
• What is the primary role of an investment advisor?
• Which of the following best describes U.S. Treasury notes?
• What characterizes a New Comparability Plan?
• What is the time weighted rate of return calculated by?
• What is a primary advantage of improved recognition of a company’s benefits?
• What is the primary purpose of a Summary Plan Description (SPD)?
• Which of the following statements is true regarding Pension Wear-Away?
• Which method is essential for processing performance measurement?
• In performance measurement, what should be avoided to save time and cost?
• Which of the following describes the glide path for investments in retirement funds?
• Who qualifies as an investment advisor under the Advisors Act?
• What occurs during the "processing" stage of effective performance measurement?
• What is the primary function of an immediate life annuity?
• Which risk could potentially hurt a firm's ability to pay interest or dividends?
• What does a mixed model combine in its approach?
• What does the Department of Labor have jurisdiction over under ERISA?
• What is a key benefit of variable annuities?
• What is cross-testing in the context of retirement plans?
• Which step comes after "input" in the performance measurement process?
• What does it mean for a fund to change its asset allocation over time?
• What does 'capital gain or loss' indicate?
• Which risk primarily affects bonds more directly than common stocks?
• What is a fundamental duty of fiduciaries under ERISA?
• What does the cumulative wealth index measure?
• What is a Minimum Balance Pension?
• Which of the following is a characteristic of income stocks?
• What type of fee is associated with selling shares in an investment fund?
• What is a significant challenge associated with the Markowitz model?
• What is meant by the term "glide path" in retirement planning?
• How frequently must the Retirement Plan Committee meet?
• Which of the following defines a qualifying lump sum distribution?
• How does the Monte Carlo simulation assess outcomes?
• In which scenario would interest-sensitive stocks typically perform poorly?
• What approach does a passive investment strategy take?
• Which of the following is a benefit of a successful investment program for employees?
• What is the purpose of including bonds in pension portfolios?
• What do sales charges also refer to?
• What does currency risk refer to?
• Which of the following is NOT an exclusion under the Advisors Act?
• Which statement is accurate regarding co-fiduciary responsibilities under ERISA?
• What is the significance of the fiduciary duties under ERISA?
• What is the relationship between systematic risk and portfolio diversification?
• What does IRC Section 72 state about distributions from a qualified plan?
• What is the purpose of Target Date Funds?
• What does capital gain refer to?
• What does 'portfolio weights' refer to in the context of portfolio risk?
• Portfolio's alpha value indicates what?
• What is the primary factor that must be considered when processing hardship distributions?
• What does an amendment to a plan document entail?
• What is the nature of front-end load fees in an investment?
• Which of the following factors is NOT a determinant of portfolio risk?
• What is not a function of electronic transactions as per IRS Guidelines in retirement plans?
• Which of the following is a core activity for employee benefits related to costs?
• Which type of risk involves the possibility of financial downturns within a specific industry?
• What is one benefit of selecting mutual funds for pension plans?
• What does effective wealth management aim to achieve?
• What action can a participant take that involves electronic transactions in a retirement plan?
• What term is used to describe transaction costs for buying and selling shares?
• Which type of stock is primarily aimed at generating income for investors?
• What does the term "Pension Wear-Away" refer to?
• What type of investments do money market mutual funds typically include?
• What term refers to portfolios that offer the best return-risk combinations available to investors?
• What is referred to as the glide path of a target date fund?
• What is the primary investment objective of using growth stocks?
• What is nondiversifiable risk also referred to as?
• How are lifestyle funds characterized?
• What does the wealth management approach emphasize in decision-making?
• The purpose of dedication, immunization, and contingent immunization is to achieve what?
• What do management fees typically cover in an investment fund?
• Which of the following is NOT a characteristic of sub-transfer agent fees?
• Under ERISA, what is required of companies regarding employee benefits communication?
• What do age-weighted profit sharing plans typically favor?
• Which type of fund targets a specific retirement year and adjusts asset allocation as that date approaches?
• What does a fidelity bond protect against?
• What is one of the fiduciary responsibilities under ERISA Title I?
• What does appropriate statistical processing in performance measurement help to understand?
• Which of the following is a consideration for employers regarding DC plan investments?
• What does business risk specifically evaluate regarding a corporation?
• What is a characteristic of target date funds?
• According to the impartial conduct standards, what is required of investment advice?
• Which type of common stock is characterized by major companies with strong earnings records?
• Which risk is specifically tied to a unique firm as opposed to market or systemic factors?
• What was one of the significant provisions of the Tax Reform Act of 1986?
• What does the term "interest rate risk" refer to?
• What type of distributions can be expected from defined benefit hybrid plans?
• What does country risk primarily refer to in the context of investment?
• What is a contributing factor that may affect contributions in a target benefit plan?
• Who typically offers target funds?
• What is a common characteristic of market risk?
• What type of risk is unique to a specific security and can be eliminated through diversification?
• What is a key responsibility of employees in DC plan investment provisions?
• What constitutes a recommendation under ERISA guidelines?
• Which of the following approaches can be used when converting from a DB plan to a Hybrid plan?
• Which duty is NOT included in the duties for fiduciaries under ERISA?
• What kind of risk is associated with investments not being able to be sold quickly?
• Which of the following factors does market risk include?
• How does a lump sum rollover work?
• What does tactical asset allocation involve?
• Which of the following best describes the relationship of investors in a collective investment fund?
• What does financial risk primarily concern?
• Which of the following best describes wealth management?
• What type of risk is associated with certificates of deposit?
• Which of the following is typically included in retirement plan policies?
• What do maximum standards in employee benefits communication aim to achieve?
• Cyclical stocks are associated with which of the following characteristics?
• Which department is responsible for the jurisdiction and administration of IRC tax law provisions?
• What responsibility do plan sponsors hold in defined benefit hybrid plans?
• Which type of fund involves a trust managed by a bank or trust company?
• What is one role of Target Date Funds (TDFs)?
• What is meant by the term 'dominance' in portfolio management?
• What is the goal of preemptive tax planning?
• What is the primary focus of business risk?
• What is a unique characteristic of federal agency issues compared to Treasury obligations?
• What type of plan does a floor-offset plan combine?
• What is a defining feature of a stochastic model?
• What does the "true average compound rate of growth" measure?
• Why is the tax aspect of investments particularly important for pension funds?
• What is liquidity risk?
• What are the two components of return on an investment?
• When must pre-retirement survivor benefits notifications be issued?
• Why is understanding currency risk important for investors?
• In a target benefit plan, how are contributions predominantly determined?
• What is a requirement of the Section 404(c) safe harbor provision?
• What defines a defensive stock?
• Which of the following best describes a Qualified Default Investment Alternative (QDIA)?
• Which term refers to the risk associated with loss of value due to inflation?
• Which risk is primarily associated with common stocks?
• What is standard deviation a measure of in statistical analysis?
• What does the Capital Asset Pricing Model (CAPM) analyze?
• A Defined Contribution Hybrid Plan primarily combines which two plan structures?
• When does a deferred life annuity begin to pay out?
• Which administrative issue must be considered when structuring investment provisions of a DC plan?
• What is beta used to measure in investment analysis?
• Which of the following best describes a factor in improving employer investment education?
• What is included under "Other investment fund fees"?
• What is one of the purposes of Rule 12b-1 fees?
• What is an example of a factor that contributes to market risk?
• Which category is NOT excluded from the definition of investment advisor under the Advisors Act?
• What does dollar cost averaging involve?
• Market risk is primarily associated with which type of investment reaction?
• What is an immediate life annuity designed to do?
• What is the maturity range for certificates of deposit typically issued by commercial banks?
• What might render a performance measurement system ineffective?
• What does the risk-adjusted rate of return in portfolio measurement help assess?
• What does performance measurement output analyze?
• Which type of risk is characterized by the inverse relationship between bond prices and interest rates?
• What type of information does a Summary Annual Report (SAR) contain?
• Which type of risk reflects the relationship between investment returns and inflation rates?
• Which role is commonly included in a Retirement Plan Committee?
• What is a common feature of blue chip stocks?
• What does a Summary of Material Modification (SMM) need to explain?
• What is one benefit of a successful investment program for an employer?
• Which of the following best describes the duty of loyalty for fiduciaries?
• What is an essential function of a successful investment program?
• In defined benefit plans, when is post-retirement survivor benefits notification required?
• What is the primary purpose of performance measurement in investments?
• What does the Markowitz model propose regarding efficient portfolios?
• What distinguishes a deferred life annuity from an immediate life annuity?
• What factor is primarily considered in an age-weighted profit sharing plan?
• What does a retirement plan loan policy provide?
• Which of the following is a key advantage of a Cash Balance Plan for younger workers?
• What qualifies as a lump sum distribution from a qualified retirement plan?
• How often must a defined contribution plan with direct investments provide benefit statements?
• Which of the following describes a fixed annuity?
• What is the concept of comprehensive diversification in asset allocation?
• Which aspect of administrative issues is crucial for effective investment structuring?
• Which type of stock is generally more attractive to pension plans seeking current income?
• What characterizes commercial paper as an investment?
• Which feature is typical of defined benefit hybrid plans?
• Which scenario allows for an exception to the early distribution tax as per the Tax Reform Act of 1986?
• How does interest rate risk impact investments?
• Interest-sensitive stocks tend to behave how in relation to interest rate changes?
• What does 'yield' in an investment context refer to?
• Which is not a responsibility of employers in Defined Contribution (DC) plan investment provisions?
• Which of the following is NOT a core activity in employee benefits?
• What factor contributes to enhanced investment opportunities in defined contribution (DC) plans?
• What does risk premium indicate in financial investments?
• How is the geometric mean useful in finance?
• When using a stochastic model, what do repeated iterations help to assess?
• Which classification of common stocks is typically considered less stable?
• What is meant by currency risk?
• What is supplied upon request under the PPA related to retirement plans?
• What defines when a broker or investment advisor becomes a fiduciary under ERISA?
• What is alpha in the context of portfolio management?
• New comparability plans allow plan sponsors to do what with participant contributions?
• What is meant by inflation risk?
• Under what regulation are defined benefit hybrid plans typically subject?
• What does an increase in interest rates typically signify for long-term bonds?
• What defines a cash balance plan?
• What does the Security Market Line (SML) represent in the Capital Asset Pricing Model (CAPM)?
• What does an investor use the equity risk premium for?
• What is typically considered the fund level of lifestyle funds?
• Which caveat is NOT associated with a performance measurement system?
• What can trigger the additional tax on distributions under the Tax Reform Act of 1986?
• What does liquidity refer to in relation to investments?
• More recent studies on diversification indicate the need for how many stocks?
• How are typical ongoing management fees expressed?
• What is one outcome expected from Tactical asset allocation strategies?
• What kind of fees are often used to cover the cost of advertising for an investment fund?
• Under the Best Interest Contract Exemption, what must financial institutions ensure with their advisors?
• According to effective investment strategies, what is necessary for employer stock?
• What is the maturity range for U.S. Treasury bills?
• Why is regular investing important in dollar cost averaging?
• What type of advisor can be exempt from registration under the Advisors Act?
• What is the main goal of a passive investment strategy?
• What does the portfolio's beta value represent?
• What characterizes a deterministic model in wealth management?
• How many elements define an investment advisor under the Advisors Act?