Series 7 Exam Question 270: Answer and Explanation

Question: 270

One of your clients is expecting to receive a lot of money over the next three years. Your client would like to shelter some of that money by investing in a DPP. Which of the following types of DPPs will help your client shelter the most money?

• A. Oil and gas income
• B. Oil and gas developmental
• C. Oil and gas combination
• D. Oil and gas wildcatting

Correct Answer: D

Explanation:

D. An oil and gas wildcatting (exploratory) program would best suit your client's needs. Oil and gas wildcatting programs drill in unproven areas and create quite a lot of write-offs in the early years. However, if oil is hit, a wildcatting program will bring in a lot of money.