Accredited Wealth Management Advisor (AWMA) Exam 3 Practice Test
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About this Exam
Prepare with the Accredited Wealth Management Advisor (AWMA) Exam 3 Practice Test practice quiz. This question bank includes 10 questions covering risk, beta, estate, stage, and fiduciary. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.
Sample Questions
Question
1
Investors seeking the least risk should acquire stocks with beta coefficients
Explanation:
Beta measures a stock’s sensitivity to overall market movements, i.e., its systematic risk. A beta of 1 means the stock tends to move with the market; a beta below 1 indicates the stock is less volatile than the market, so it carries less market risk. To seek the least risk relative to the market, you want a beta under 1.0, which describes stocks that are less reactive to market swings. A beta above 1 signals greater volatility and higher risk, so those are not the best for minimizing risk. Keep in mind that even low-beta stocks still have unsystematic risk, which diversification can reduce.
Question
2
Estate tax portability requires timely filing.
Explanation:
Portability hinges on making a timely election for the deceased spouse. The unused federal estate tax exemption that belonged to the first spouse to die can be added to the surviving spouse’s exemption, but that only happens if the executor files the deceased spouse’s estate tax return to elect portability. That election is made on Form 706 and must be filed by the due date, typically nine months after death, with the possibility of extending the deadline (up to about 15 months) if a timely extension is requested. If the filing isn’t timely, the opportunity to transfer the unused exemption is lost in most cases, so portability depends on meeting that deadline.
Question
3
The stage of venture capital that involves beta testing and giving away free samples is known as which stage?
Explanation:
The stage being described is the one focused on turning an idea into a testable product and validating demand. Seed capital funds this early development work, including building a prototype, conducting beta testing, and offering free samples to attract initial users and gather feedback. These activities help prove that the concept works in the real world and OKs early product-market fit before scaling or pursuing larger rounds. Later stages—first stage (after there’s a working product and some revenue), second stage/expansion (for rapid growth), and mezzanine (late-stage financing closer to an exit)—are more about scaling, expanding operations, and preparing for liquidity rather than early product validation with beta tests and freebies. So seed capital is the best fit for the described activities.
Question
4
Which of the following is not one of the fiduciary duties required under the Standards of Conduct now in place for CFP professionals?
Explanation:
The key idea here is what counts as a fiduciary duty under the CFP Standards of Conduct. Fiduciary duties require placing the client’s interests ahead of the advisor’s own and acting with appropriate diligence and obedience to client directions. The duties that fit this description are loyalty (undivided loyalty to the client), care (act with prudence, skill, and diligence), and following client instructions (carry out the client’s directions when appropriate). Being competent is essential for giving good advice, and CFP professionals must maintain necessary knowledge and skills through ongoing education. However, competency isn’t framed as a fiduciary duty in these standards; it’s a baseline professional qualification that supports fulfilling fiduciary duties, not itself one of them.
Question
5
What is a primary risk of not incorporating liquidity planning into a wealth plan?
Explanation:
Having liquidity planning means making sure there is cash available to cover ongoing expenses, taxes, emergencies, and required withdrawals without having to touch long-term investments. If you skip this, you risk being forced to sell assets at inopportune times—often during market stress or when prices are unfavorable—to meet cash needs. Those forced sales can lock in losses, reduce overall wealth, and disrupt long-term goals. Higher investment returns aren’t a direct risk of lacking liquidity, and there’s always some risk in any plan—lacking liquidity increases the risk of running short when cash is needed and of failing to preserve wealth over time. It’s not about guarantees; it’s about reducing the chance of needing to sell at bad moments.
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Accredited Wealth Management Advisor (AWMA) Exam 3 Practice Test
This practice set contains 10 questions from the matching question bank and focuses on risk, beta, estate, stage, and fiduciary. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.
This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.
Frequently Asked Questions
This quiz contains a total of 10 practice questions carefully selected to test your knowledge on this subject.
Yes, you will have exactly 0 minutes to complete the exam. A countdown timer will be visible once you start.
Yes, you can retake this practice test as many times as you need. The questions and options may be randomized on subsequent attempts to ensure comprehensive learning.
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