Certified Trust and Financial Advisor v1.0 (CTFA)

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Total 865 questions

It is a technique used to reduce taxes in which a taxpayer shifts a portion of income to relatives in lower tax brackets. What is it?

  • A. Income shifting
  • B. Deductions maximization
  • C. Tax deference
  • D. Tax evasion


Answer : A

A good way to keep your spending in line is to make all household transactions (even fun money or weekly cash allowances) using a tightly controlled:

  • A. Checking account
  • B. Balance sheet
  • C. Budget
  • D. Savings account


Answer : A

An account offered by credit unions that is similar to interest paying checking accounts offered by the other financial institutions is:

  • A. Deposit insurance
  • B. Share draft account
  • C. Internet bank
  • D. Checking and saving accounts


Answer : B

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

  • A. Deposit insurance
  • B. Share draft account
  • C. Internet bank
  • D. Checking and saving accounts


Answer : A

_____________ are a popular offering at bank and other depository institutions and competes for deposits with money market and mutual funds.

  • A. Money market deposit accounts
  • B. Money market mutual funds
  • C. Time deposit
  • D. Asset management account


Answer : A

________________ pools the funds f many small investors to purchase high return, short term marketable securities offered by the U. S treasury.

  • A. Money market deposit accounts
  • B. Money market mutual funds
  • C. Time deposit
  • D. Asset management account


Answer : B

It is a formal, legal commitment to extend credit up to some maximum amount over a stated period of time.

  • A. Letter of credit
  • B. Revolving credit agreement
  • C. Line of credit
  • D. Trade credit


Answer : B

The type(s) of collateral generally used for a secured short-term loan is(are):

  • A. Inventory and/or receivables
  • B. Common Stocks and bonds
  • C. Real estate
  • D. Machinery


Answer : A

The investment proposal with the greatest relative risk would have:

  • A. The highest standard deviation of net present value
  • B. The highest coefficient of variation of net present value
  • C. The highest expected value of net present value
  • D. The lowest opportunity loss likelihood


Answer : B

A safe-deposit box is a rented drawer in a bank"™s vault. Boxes can be rented for:

  • A. $40
  • B. $30
  • C. $40-$85
  • D. $90


Answer : C

Probability-tree analysis is best used when cash flows are expected to be:

  • A. Independent over time
  • B. Risk-free
  • C. Related to the cash flows in previous periods
  • D. Known with certainty


Answer : C

You are considering two mutually exclusive investment proposals, project A and project B B's expected value of net present value is $1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that

  • A. Project A dominates project B
  • B. Project B dominates project A
  • C. Project A is more risky and should offer greater expected value
  • D. Each project is high on one variable, so the two are basically equal


Answer : A

If two projects are completely independent (or unrelated), the measure of correlation between them is:

  • A. 0
  • B. 0.5
  • C. 1
  • D. -1


Answer : A

Managerial options can be viewed as:

  • A. Methods for reducing agency risk through the use of incentives
  • B. Methods for reducing total firm risk through diversification
  • C. Strategies for increasing management compensation
  • D. Opportunities for altering management decisions in the future


Answer : D

Checkbook ledger:

  • A. Is for informal use
  • B. Is a booklet provided with a supply of check
  • C. Used to maintain accurate record
  • D. Both B and C are correct


Answer : D

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Total 865 questions