CTFA Exam Questions

Treasury stock is:

A call provision, a sinking fund, and/or conversion are used to retire:

Preferred shareholders' claims on assets and income of a firm come those of creditors those of common shareholders.

Dual classes of are common in new ventures where promotional usually goes to the founders.

Palo Alto Industries has a debt-to-equity ratio of 1.6 compared with the industry average of 1.4. This means that the company:

A legal claim permitting the lender in case the borrower defaults, to liquidate the items serving as collateral to satisfy the obligation is called:

It is a mortgage on personal property given as a security for the payment of an obligation.

_________ is a legal note giving to the lender the right to sell collateral if the borrower defaults on the obligation.

These are additional charges you may owe if you decide to pay off your loan prior to maturity. What are these?

A universal life insurance policy provides two types of death protection. The first type, known as Option A, provides a level death benefit. As the cash value increases:

A method of calculating interest by computing finance charges on the original loan balance and then adding the interest to that balance.

Credit life or disability insurance is:

Sometimes, as a condition of receiving an installment loan, a borrower is required to buy credit life insurance. From borrower's perspective, credit life insurance not a good deal...

An activity that reduces the probability that a loss will occur is called:

Loss control is an activity that:

Underwriting directly affects an insurance company's chances of success. If underwriting standards are too high, then people will be unjustly denied insurance converge and insuranc...

Just as with other aspects of personal financial planning, life insurance decision can be made easier by following a step-by-step approach. You will need to answer some questions....

Life insurance is intangible. You can't see, smell, touch or taste its benefits and those benefits mainly happen when someone is died. However, life insurance does have some import...

A method of determining the amount of life insurance coverage needed by multiplying gross annual earnings by some selected number is called:

According to multiple of earnings method, the rule of thumb used by many insurance agents is that your insurance coverage should be equal to 5 to 10 times your current income. For...

Need analysis method is a more detailed approach than multiple-of-earnings method. This method considers both financial obligations and financial resources of the insured and his o...

Insurance that provides only death benefits, for a specified period, and does not provide accumulation of cash value is called:

It is a term life policy written for a given number of years with coverage remaining unchanged throughout the effective period. What is it?

It is a term life policy provision allowing the insured to renew the policy at the end of its term without having to show evidence of insurability

Decreasing term policy is:

__________ is the accumulated refundable value of an insurance policy; results from the investment earnings on paid-in insurance premiums.

Three major types of whole life policies are available. Which of the following is/are Not out of those?

Whole life insurance is a life insurance designed to offer ongoing insurance coverage over the course of an insured's entire life. The noteworthy advantage of whole life insurance...

Group health insurance is the health insurance consisting of contracts written between a group, (employer, union, etc.) and the health care provider. Most health insurance plans fa...

A form of HMO in which subscribers receive services from physicians practicing from their own offices and from community hospitals affiliated with the IPA.

It's a managed care plan that is similar to a plan that is similar to a PPO but reimburses members only when affiliated providers are used. What is it?

____________ is a hybrid form of HMO that allows members to go outside the HMO network for care and reimburses them at a specified percentage of the cost.

If you have caused an accident, which type of automobile insurance would cover damage to your own car?

Many savings programs are protected by the federal government against loss. Which of the following is Not?

Which of the following instruments is NOT typically associated with spending?

Prescription drug coverage is:

A universal life insurance provides two types of death protections, i.e. Type A and B. As with any insurance policy, universal life insurance has its own pros and cons. There are t...

It is an insurance plan designed to supplement the basic coverage of hospitalization, surgical and physician expenses; used to finance more catastrophic medical costs. What is it?

______________ is a health insurance plan that combines into a single policy the coverage for basic hospitalization, surgical, and physician expenses along with major medical prote...

Most of the major types of health plans are sufficient to meet the protection needs of most individuals and families. But, insurance companies offer other options that provide limi...

It is the initial amount not covered by an insurance policy and thus the insured's responsibility; it's usually determined on a calendar-year basis or on a per-illness or eracciden...

A participation or co-insurance clause stipulates that the company will pay some portion of the covered loss in excess of the deductible rather than the entire amount. How much por...

There is a feature which is commonly found in health insurance policies that limit the amount that will be paid for certain specified expenses, even if the claim does not exceed ov...

Several insurance provisions affect a health insurance plan's value to you. Some important provisions address:

Many health insurance plans omit or offer only reduced benefits for treatment of mental disorders. For example, a health insurance policy may offer hospitalization benefits that co...

The delivery of medical and personal care, other than hospital care, to persons with chronic medical conditions resulting from either illness or frailty is called:

___________ is a policy provision ensuring continued insurance coverage for the insured's lifetime as long as premiums continue to be paid.

Even if the policy's requirements are met, the insured must pay long-term care expenses during waiting, or elimination period. Typical waiting periods are:

It is a contractual clause allowing the insured to continue insurance only at the insurer's option. What is it?

When a family member becomes sick for an extended period, the effect on the family goes beyond medical bills. The average chance of a person age 35 becoming disabled for 90 days or...