A checking account on which the financial institution pays interest; it have no legal minimum balance is called:

Negotiable order of withdrawal account

Financial intermediaries :

Include insurance companies and pension funds

Do not invest in new long-term securities

Include insurance companies and pension funds

Include the national and regional stock exchanges

Are usually underwriting syndicates

Loan disclosure statement is:

A document which lenders are required to supply borrowers

That states the dollar amount of finance charges

That states APR applicable to a loan

In a typical loan amortization schedule, the dollar amount of interest paid each period.

Remains constant with each payment

Any one of these can be the case

Which one of the followings is a mutual fund that pools the funds of many small investors and purchases high-return, short-term marketable securities?

Negotiable order of withdrawal account

It is a federally insured savings account, offered by banks and other depository institutions, that competes with money market mutual funds. What is it?

Negotiable order of withdrawal account

A comprehensive deposit account, offered primarily by brokerage houses and mutual funds is a/an:

Negotiable order of withdrawal account

Money market deposit account is a federally insured savings account, offered by banks and other depository institutions, that competes with money market mutual funds. Depositors can check-writing privileges or ATM to access MMDA accounts. A major problem with the growing popularity of interest-paying checking accounts has been:

A rise in monthly bank charges, which can easily amount to more than the interest earned on all but the highest account balances

A slump in monthly bank charges, which can easily amount to more than the interest earned on all but the highest account balances

A fall in monthly bank charges, which can easily amount to more than the interest earned on all but the highest account balances

A rise in monthly bank charges, which can easily amount to more than the interest earned on all but the highest account balances

A rise in monthly bank charges, which can easily amount less than the interest earned on all but the highest account balances

According to the capital-asset pricing model (CAPM), a security's expected (required) return is equal to the risk-free rate plus a premium:

Based on the systematic risk of the security

Based on the unsystematic risk of the security

Based on the total risk of the security

Based on the systematic risk of the security

Financial goals cove a wide range of financial aspirations such as:

Setting up a savings and investment program

Today's well-defined employee benefits package cover a full spectrum of benefits that may include all EXCEPT:

Subsidized employee benefit plan

Accumulating assets to enjoy in retirement is only part of the:

Long-term financial planning process

Short-term financial planning process

Life time financial planning process

Permanent financial planning process

This is a type of employee benefit plan wherein the employer allocates a certain amount of money and then the employee spends that money for benefits selected from a menu covering everything from child care to health and life insurance to retirement benefits.

Both of the above are one and the same

When determining the interaction between the UK and EU on the regulation of the financial services industry, the UK government must always

implement new EU Directives by passing acts of Parliament.

seek approval from the European Commission before implementing any new regulations.

implement new EU Directives by passing acts of Parliament.

accommodate all EU Decisions in UK legislation.

provide copies of new regulation to the European Commission within a reasonable period of time for their approval.

The Financial Services and Markets Act 2000 regulates the provision of which type(s) of financial advice?

Advice to vulnerable individuals only

Advice to all individuals and group personal pensions schemes only

Advice to all individuals unless they are elective professional clients

Simon has experience of dealing with retail clients and is now in training to qualify as a pension transfer specialist. As a consequence, which of the following statements are true?

His firm is allowed to impose a time limit on completion of the qualification

His supervisor must also be suitably qualified

He must have at least 3 years experience as an adviser before his training can commence

His firm is allowed to impose a time limit on completion of the qualification

His supervisor must also be suitably qualified

Once qualified, CPD requirements are waived for 12 months

Once qualified, records of his training must be maintained for at least 5 years

When constructing a portfolio for a UK resident basic-rate taxpayer who requires an income, the most tax efficient solution would be achieved by:

Holding fixed-interest funds within a stocks and shares ISA

Only investing in offshore products

Holding fixed-interest funds within a stocks and shares ISA

Purchasing National Savings & Investments (NS&I) Fixed-Interest Savings Certificates

Holding high-yielding equities within a stocks and shares ISA

The principal reasons for using the Sharpe ratio when calculating a portfolio's performance are:

It indicates the percentage return above/below the risk-free rate for each unit of risk taken

The higher the number, the more a portfolio manager can be said to have added value

It indicates the percentage return above/below the risk-free rate for each unit of risk taken

It will always be quoted on a rolling quarterly basis

A positive Sharpe ratio will always guarantee positive returns

The higher the number, the more a portfolio manager can be said to have added value

Pauline, a basic-rate taxpayer, has a portfolio which comprises of various equity and fixed-interest unit trusts and OEICs. She should be aware that:

Any losses from this portfolio are allowable for Capital Gains Tax calculations

The taxation of dividends on the OEICs held will be treated the same way as the unit trusts

Any losses from this portfolio are allowable for Capital Gains Tax calculations

Her entire portfolio will be subject to a 10% tax credit

Only the proceeds of sale from the OEICs could be subject to Capital Gains Tax

The taxation of dividends on the OEICs held will be treated the same way as the unit trusts

She can never reclaim any tax deducted at source

ABA CTFA Practice Test 1 - Free Online Exam Prep & Questions

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

Deposit Insurance

Demand deposit

Time deposit

Money market mutual fund

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