American Bankers Association CTFA Exam Practice Test Instant Access

Question 1

Which of the following equations assume a linear relationship between price and yield?

AYield to maturity equation

BDuration equation

CConvexity equation

DImmunization equation

Answer : B

Question 2

All of the following are the levels of market efficiency, Except:

ALow PE effect

BThe neglecting firm effect

CCommon size effect

DThe small firm effect

Answer : C

Question 3

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

AStraight term policy

BTerm life insurance

CDecreasing term policy

DRenewability

Answer : B

Question 4

Which of the following are required inputs of the present value approach?

ADiscount rate and the expected cash flows

BExpenses paid in cash and dividends disbursed

CEarnings in valuing stocks and stock-in-trade

DRetained earnings and dividend payout ratio

Answer : A

Question 5

A statistical measure of the variability of a distribution around its mean is referred to as __________.

AProbability distribution

BThe expected return

CThe standard deviation

DCo-efficient of variation

Answer : C

Question 6

The contracts that are not subject to unilateral changes in its provision and requires the performance of various functions and services for an extended period is called:

AShort-duration

BLong-duration

CMedium-duration

DFixed-duration

Answer : B

Question 7

Changes in existing policies that may result in additional premiums or return premiums, such as increases or decreases in coverage limits, in:

AEndorsement

BAudit premiums

CChange plan

DPolicyholder dividends

Answer : A

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