CTFA Exam Questions

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:

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....

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...

The dues paid for membership in our society; the cost of living in this country may be referred as:

Taxable income is:

Gross income essentially includes any and all income subject to federal taxes. Here are some common forms of gross income Except:

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...

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.

A technique used to reduce taxes in which a taxpayer shifts a portion of income to relatives in lower tax brackets.

When using a probability tree approach, we discount the various cash flows to their present value at:

A managerial option, in effect:

The presence of managerial, or real, options the worth of an investment project.

A firm's degree of operating leverage (DOL) depends primarily upon its:

EBIT is usually the same thing as:

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:

This statistic can be used as a quantitative measure of relative "financial risk."

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...

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?

If the intrinsic value of a stock is greater than its market value, which of the following is a reasonable conclusion?

When the market's required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:

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...

Interest rates and bond prices:

The expected rate of return on a bond if bought at its current market price and held to maturity.

___________ is a type of insurance that protects funds on deposit against failure of the institution; can be insured by the FDIC and the NCUA.

A checking account on which the financial institution pays interest; it have no legal minimum balance is called:

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?

It is a federally insured savings account, offered by banks and other depository institutions, that competes with money market mutual funds. What is it?

A comprehensive deposit account, offered primarily by brokerage houses and mutual funds is a/an:

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...

This type of risk is avoidable through proper diversification:

A statistical measure of the degree to which two variables (e.g., securities' returns) move together is:

According to the capital-asset pricing model (CAPM), a security's expected (required) return is equal to the risk-free rate plus a premium:

The risk-free security has a beta equal to , while the market portfolio's beta is equal to .

Carrie has a "certainty equivalent" to a risky gamble's expected value that is less than the gamble's expected value. Carrie shows:

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.

A measure of "risk per unit of expected return."

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...

Two people wishing to open a checking account may do so in which one of the following ways:

After opening the checking account, follow these basic procedures Except:

______________ is the result writing a check for an amount greater than the current account balance.

It is a booklet provided with a supply of checks, used to maintain accurate records of all checking account transactions.

An arrangement between the account holder and the depository institution wherein the institution automatically pays a check that overdraws the account is called:

Diversification__________:

An order made by an account holder instructing the depository institution to refuse payment on an already issued check.

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).

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...

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...

This is a saving bond issued by various denominations by the U.S Treasury. These are backed by the

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...

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...