Series 7: Chapter 7 Practice Question Answers

Chapter 7 Practice Question Answers

1. 1. Answer: C. Secured lenders are always paid first, and general partners are always paid last.
2. 2. Answer: A. An underwriter markets the DPP; a partnership manager makes decisions; a property manager manages properties. All of these, as well as syndicator, are roles of the general partner.
3. 3. Answer: B. The general partner manages the DPP on a daily basis; the limited partners may invest in businesses that compete with the DPP, sue to remove the general partner, and vote to dissolve the DPP.
4. 4. Answer: B. Depreciation reduces an asset’s book value, so accelerated depreciation reduces that book value more quickly than straight-line depreciation.
5. 5. Answer: A. Of those listed, oil and gas exploration is the most risky and likely would lead to the most losses that could be netted against passive income for tax purposes.
6. 6. Answer: D. An investor in a DPP needs to meet suitability standards set by the DPP and needs to be able to withstand losses, particularly in the nea