American Bankers Association CTFA Exam Practice Test Instant Access

Question 1

Lease is:

AAn arrangement in which the lessee receives the use of a car (or the asset) in exchange for making monthly lease payments over a specified period

BAn arrangement in which the lessee receives the use of a car (or the asset) in exchange for making weekly lease payments

CAn arrangement in which the lessee receives the use of a car (or the asset) in exchange for making Quarterly lease payments over a specified period

DAn arrangement in which the lessee receives the use of a car (or the asset) in exchange for making monthly lease payments

Answer : A

Question 2

Stock beta measures:

AStock volatility

BCompany earnings

CStock correlation with the CPI

DCompany debt

Answer : A

Question 3

The two most common types of dollar rolls are:

AFixed-coupon and yield-maintenance agreements

BVariable-coupon and yield-maintenance agreements

CFixed-coupon and Accounting agreements

DVariable -coupon and Principal agreements

Answer : A

Question 4

Audit objectives that apply to one sales portion are all EXCEPT:

AEnsure that daily activity of each salesman is reviewed by head salesman

BEnsure that inventory is being accurately market to market on a continuing basis

CEnsure customer markups are reasonable relative to NASD

DNone of these

Answer : B

Question 5

Which of the following is least likely to be considered a short-term marketable security?

AAn original issue 30-year corporate bond with one-year remaining until final maturity

BAn original issue 30-year government bond with one-year remaining until final maturity

CA 90-day Treasury bill

DShort-term corporate debt instruments with a 9-month original maturity

Answer : A

Question 6

Insurance coverage that protects real and personal property from catastrophic losses caused by a variety of perils, such as fire, theft, vandalism, and windstorm is referred as:

AProperty insurance

BInsurance premium

CLiability insurance

DPeril

Answer : B

Question 7

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 because:

AIts very costly

BIt does little more than give lenders a lucrative source of income

CIt increases market interest charges

DIt increases inflation

Answer : A, B

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