Ask Question
BusinessBusiness
31 July, 09:34

A younger client with a moderate amount of funds is considering the purchase of a home in the near-term future. For this reason, the investor wishes to keep their assets as liquid as possible in the event that the right deal on a home comes along. As this client's registered representative, which of the following would carry the LEAST amount of liquidity and therefore be unsuitable for this client?

(A) Investment in bonds and bond funds focused on municipal securities

(B) Investment in equity securities such as preferred stock

(C) Investment in a DPP (Direct Participation Program)

(D) Investment in CDs (Certificates of Deposit) with varying short-term maturities

+5
Answers (2)
  1. 31 July, 11:36
    0
    c) Investment in a DPP (Direct Participation Program)

    Explanation:

    Direct Participation Programs are a form of limited partnership. DPP has the lack of liquidity, since ownership interests are not always freely transferrable and require the approval of a general partner of the DPP. Each of the other items listed are more liquid on a short-term basis. Bonds can be sold, bond fund shares can be redeemed, equities are easily sold in the secondary market, and though CDs are not transferrable, the maximum maturity is 1 year or less, so the client would have short-term access to the funds invested.
  2. 31 July, 13:24
    0
    C

    Explanation:

    Investment in a DPP (Direct Participation Program)

    A direct participation program (DPP) is a direct participation plan, they are non-traded pooled investments in real estate or also in energy business over an extended time frame.

    DPPs are not traded, that means that they lack the ability to be liquid and also not a reliable pricing mechanism. With DPPs there usally is a requirement for clients to meet up with asset and income thresholds to invest.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A younger client with a moderate amount of funds is considering the purchase of a home in the near-term future. For this reason, the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
It is important to diversify your investments a. because money saved in a bank is not protected b. so you do not pay more taxes to the government c. in order to minimize risk and maximize return d. to keep your financial documents
Answers (1)
The key to building wealth involves high risk investing
Answers (1)
Can cathy withdraw money from her ira savings account
Answers (2)
Mr. Bundy believes that women make poor shoe salespersons, but hires a woman to sell his shoes anyway and treats them the same as his male employees. Based on this information, which of the following is TRUE regarding Mr. Bundy?
Answers (1)
From the bank reconciliation, no entry was recorded for deposits in transit. This would cause A. assets to be overstated. B. assets to be understated. C. no impact since deposits in transit are already included in the balance per books. D.
Answers (1)
New Questions in Business
Malcolm has decided that he wants to open up his own law practice. The time has come to establish prices for his services.
Answers (1)
The pursuit of only a singular, substantive goal often tends to support the choice of a competitive strategy. a. True b. False
Answers (2)
Tony is the sole shareholder of O. K. Oil Corporation. Tony uses O. K's funds to pay his personal expenses and to create Pure Fuel Corporation to engage in the same business as O. K. Oil. He then transfers all of O. K. Oil's assets to Pure Fuel.
Answers (1)
All else held constant, the law of demand suggests that as rev: 05_02_2018 Multiple Choice the demand for tablets increases, the price of tablets will increase. income increases, the quantity of tablets demanded will increase.
Answers (1)
When making decisions for her department, Ellie tends to take a long time because she takes into consideration a large amount of information. What type of decision-making style does Ellie demonstrate?
Answers (1)
Home » Business » A younger client with a moderate amount of funds is considering the purchase of a home in the near-term future. For this reason, the investor wishes to keep their assets as liquid as possible in the event that the right deal on a home comes along.
Sign Up Forgot Password?