Which of These Statements Most Accurately Describes Both an Unregistered

question 1

Multiple Choice

Which of these statements most accurately describes both an unregistered financial advisor and a registered investment advisor?

• A)Both are interested and willing to work with relatively low net worth investors; only the registered advisor is overseen by the SEC.
• B)Both charge fees to manage funds; only a registered investment advisor is legally obligated to put his investors' interests ahead of his own.
• C)Registered investment advisors tend to charge lower fees; unregistered financial advisors charge higher fees but take on more clients.
• D)Registered investment advisors and unregistered financial advisors most often charge an annual fee.

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Definitions:

CPI-Measured Inflation Hedge

An investment or asset that is expected to increase in value at a rate that matches or exceeds the rate of inflation as measured by the Consumer Price Index (CPI), thus preserving purchasing power.

TIPS

Treasury Inflation-Protected Securities, a type of U.S. Treasury bond designed to help investors protect against inflation.

Fully-Funded Pension Funds

Pension plans that have sufficient assets to meet all the pension obligations to participants, both present and anticipated.

Inflation Hedge

An investment that is considered to protect against the decrease in purchasing power due to inflation.