PART 1

1. Discuss how strictly adhering to an investment strategy of dollar cost averaging over time should always result in a lower average cost to the investor than if a share averaging strategy was followed

2. Describe the market environment when the investment strategies of dollar cost averaging and bond laddering work best

3. Discuss how the strategy of immunization is related to (a) reinvestment risk and (b) interest rate risk

PART 2

1. Analyze the different derivative security tools involved in hedging, briefly explaining how each are used to attain its objective to lower risk

2. Discuss the implications of employing portfolio insurance in an investment portfolio

3. Distinguish between the short sales of equity securities and those of exchange-traded funds

4. Discuss the implications of the following statement: "The derivative markets are actually negative-sum games."

5. Define an offsetting notional principal contract and explain when might an investor might engage in such a transaction

6. Explain how a combination of a long call and a short put equates to holding a synthetic position in the underlying stock

PART 3

1. Discuss the roles that initial margin and maintenance margin play in the leveraging of investment assets in a client's portfolio

2. Discuss the advantages and disadvantages of the leveraging of financial assets

3. Identify some of the alternative sources for "leverage" borrowing

4. Discuss the tax implications of leveraging investments, especially as it relates to capital gains and dividends under "the tax rules until 2010"