American Bankers Association CTFA Exam Practice Test Instant Access

Question 1

Internal Control is:

Athe process of controlling the impact of risk related events on a company

Bthe process of planning the processes in order to avoid risk related events to a company

Cthe process of designing the models to avoid risk related events on a company

DAll of the above

Answer : A

Question 2

The process of analyzing and projecting the trends of a company's capital position given its current circumstances, its recent past, and its intended business plan under a variety of future scenarios is called:

APermanence and Reliability Testing

BDynamic Capital Adequacy Testing

CCapital Market Testing

DNone of the above

Answer : B

Question 3

Which of the following is NOT the primary consideration for defining the capital of a company for purposes of measuring capital adequacy?

APermanence

BFreedom from mandatory fixed charges

CDebtors of the business

DCreditors of the business

Answer : C

Question 4

A private agreement to buy or sell a given quantity of an asset such as a currency, interest rate or commodity at a specified future date at a specified price is called:

AForward investment plan

BFuture agreement plan

CFuture Contract

DForward Contract

Answer : D

Question 5

Put Option is:

AA procedure that grants the holder the right but not the obligations to buy the main asset at the specified market price.

BA strategy that grants the holder the right to sell the underlying asset at the actual price.

CAn instrument that grants the holder the right but not the obligations to sell the underlying asset at the specified strike price.

DAn activity that grants the holder the right to put obligations to the underlying asset at the specified strike price.

Answer : C

Question 6

The evaluation and subsequent purchase or sale of investments is based on the judgment of the entity's investment and finance committees.

ATrue

BFalse

Answer : A

Question 7

What encompasses investment income and gains and losses, as well as custody of investment and recordkeeping?

AValuation data

BVerification note

CTransaction cycle

DInvestment evaluation

Answer : C

American Bankers Association CTFA Certified Trust and Financial Advisor Exam Practice Test