4. Why do clients tend to seek the help of a financial planner for investment planning?

I. They want to increase the return of their investments.

II. They want to increase the income earned from their investments.

III. They want to decrease the taxes paid on their investments.

a. I only

b. II only

c. I and II only

d. I, II, and III

5. A financial planner who is worried that interest rates will increase should

a. increase the duration of client bond portfolios.

b. decrease the yield earned on fixed-income investments.

c. increase the average maturuity with bond portfolios.

d. decrease the duration of client bond portfolios.

6. Jamie is in the 25% combined federal and state tax bracket. She is considering purchasing either a corporate bond that yields 5.0% or a municipal bond from the state where she resides. She should purchase the corporate bond, assuming the credit quality was the same, if the municipal bond

a. yields more than 6.7%.

b. Yields more than 3.75%.

c. yields more than 5.0%.

d. yields less than 3.75%.