CTFA Exam Questions
379 real CTFA exam questions with expert-verified answers and explanations. Page 2 of 8.
- Question #52
The amount of liquid funds will vary with your personal circumstances and comfort level. Another useful liquidity guideline is to have a reserve fund equal to:
- Question #53
Even if, the annual balances, in certain months expenses may exceed income, causing a monthly budget deficit. Likewise, a surplus occurs when income in some months exceed expenses....
- Question #54
It is the value today of an amount to be received in future; it is the amount that would have to be invested today at a given interest rate over a specified period of time to accum...
- Question #55
The dues paid for membership in our society; the cost of living in this country may be referred as:
- Question #56
Taxable income is:
- Question #57
Gross income essentially includes any and all income subject to federal taxes. Here are some common forms of gross income Except:
- Question #58
An adoption tax credit of up to $11650 is available for the qualifying costs of adopting child under age 18. Only taxpayers with AGI under $17,730 are eligible for the adoption tax...
- Question #59
An extension of time beyond the April 15 deadline during which taxpayers, with the approval of the IRS, can file their returns without incurring penalties.
- Question #60
A technique used to reduce taxes in which a taxpayer shifts a portion of income to relatives in lower tax brackets.
- Question #61
When using a probability tree approach, we discount the various cash flows to their present value at:
- Question #62
A managerial option, in effect:
- Question #63
The presence of managerial, or real, options the worth of an investment project.
- Question #64
A firm's degree of operating leverage (DOL) depends primarily upon its:
- Question #65
EBIT is usually the same thing as:
- Question #66
In the context of operating leverage break-even analysis, if selling price per unit rises and all other variables remain constant, the operating break-even point in units will:
- Question #67
This statistic can be used as a quantitative measure of relative "financial risk."
- Question #68
Espinosa Coffee & Trading, Inc.'s common stock measured beta is calculated to be 0.75. The market beta is, of course, 1.00 and the beta of the industry of which the company is a pa...
- Question #69
What's the value to you of a $1,000 face-value bond with an 8% coupon rate when your required rate of return is 15 percent?
- Question #70
If the intrinsic value of a stock is greater than its market value, which of the following is a reasonable conclusion?
- Question #71
When the market's required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:
- Question #72
Virgo Airlines will pay a $4 dividend next year on its common stock, which is currently selling at $100 per share. What is the market's required return on this investment if the di...
- Question #73
Interest rates and bond prices:
- Question #74
The expected rate of return on a bond if bought at its current market price and held to maturity.
- Question #75
___________ is a type of insurance that protects funds on deposit against failure of the institution; can be insured by the FDIC and the NCUA.
- Question #76
A checking account on which the financial institution pays interest; it have no legal minimum balance is called:
- Question #77
Which one of the followings is a mutual fund that pools the funds of many small investors and purchases high-return, short-term marketable securities?
- Question #78
It is a federally insured savings account, offered by banks and other depository institutions, that competes with money market mutual funds. What is it?
- Question #79
A comprehensive deposit account, offered primarily by brokerage houses and mutual funds is a/an:
- Question #80
Money market deposit account is a federally insured savings account, offered by banks and other depository institutions, that competes with money market mutual funds. Depositors ca...
- Question #81
This type of risk is avoidable through proper diversification:
- Question #82
A statistical measure of the degree to which two variables (e.g., securities' returns) move together is:
- Question #83
According to the capital-asset pricing model (CAPM), a security's expected (required) return is equal to the risk-free rate plus a premium:
- Question #84
The risk-free security has a beta equal to , while the market portfolio's beta is equal to .
- Question #85
Carrie has a "certainty equivalent" to a risky gamble's expected value that is less than the gamble's expected value. Carrie shows:
- Question #86
Specially coded plastic cards used to transfer funds from a customer's bank account to the recipient's account to pay for goods or services.
- Question #87
A measure of "risk per unit of expected return."
- Question #88
Plaid Pants, Inc. common stock has a beta of 0.90, while Acme Dynamite Company common stock has a beta of 1.80. The expected return on the market is 10 percent, and the risk-free r...
- Question #89
Two people wishing to open a checking account may do so in which one of the following ways:
- Question #90
After opening the checking account, follow these basic procedures Except:
- Question #91
______________ is the result writing a check for an amount greater than the current account balance.
- Question #92
It is a booklet provided with a supply of checks, used to maintain accurate records of all checking account transactions.
- Question #93
An arrangement between the account holder and the depository institution wherein the institution automatically pays a check that overdraws the account is called:
- Question #94
Diversification__________:
- Question #95
An order made by an account holder instructing the depository institution to refuse payment on an already issued check.
- Question #96
It is a check payable to a third party that is drawn by a bank on itself in exchange for the amount specified plus, in most cases, a service fee (of about $5).
- Question #97
Short-term interest rates generally fluctuate ______ long-term rates, so it pays to monitor interest rate movements, shop around for the best rates, and place your funds in savings...
- Question #98
Many financial planning experts recommend keeping a minimum of ____ to _____ of your investment portfolio in savings-type instruments in addition t the 3 to 6 months of liquid rese...
- Question #99
This is a saving bond issued by various denominations by the U.S Treasury. These are backed by the
- Question #100
A systematic approach to selecting and financing a vehicle can mean significant savings. Before making any major purchase-whether it's a car, house, or large appliance-consider som...
- Question #101
The loss in the value of an asset, such as an automobile, that occurs over its period of ownership; calculated as the difference between the price initially paid and the subsequent...