Interest rates and bond prices:

Sometimes move in the same direction, sometimes in opposite directions

Have no relationship with each other (i.e., they are independent)

Two people wishing to open a checking account may do so in which one of the following ways:

They can each open individual checking accounts (on which the other cannot write checks)

They can open a joint account that requires both signatures on all checks

They can open joint account that allows either one to write checks (the most common type of joint account)

After opening the checking account, follow these basic procedures Except:

Sign the check in a different way than on the signature card

Include the name of the person being paid the date, and the amount of the check

Note the check's purpose on the check

Sign the check in a different way than on the signature card

Diversification__________:

Is a way to reduce volatility of your investments

Allows you to profit in any market

Is a way to reduce volatility of your investments

Is the only way to profit in the long run

Requires investing in hundreds of funds

A systematic approach to selecting and financing a vehicle can mean significant savings. Before making any major purchase-whether it's a car, house, or large appliance-consider some basic guidelines to wise purchasing decisions.

Research your purchase thoroughly, considering not only the market but also your personal needs

Do not purchase and make necessary repairs promptly

The loss in the value of an asset, such as an automobile, that occurs over its period of ownership; calculated as the difference between the price initially paid and the subsequent sale price.

Independent dealership car lots

Coupon rate is paid until the bond ____________.

Reach to its half life to maturity

Commercial paper is essentially:

A short-term unsecured corporate IOU

An intermediate-term corporate bond

A certificate that may be exchanged for a share of common stock at a specified future date

Concentration banking:

improves control over corporate cash

Moves excess funds from a concentration bank to regional banks

Is less important during periods of rising interest rates

improves control over corporate cash

Which would be an appropriate investment for temporarily idle cash that will be used to pay quarterly dividends three months from now?

Ninety-day commercial paper with a current annual yield of 6.2 percent

A long-term Aaa-rated corporate bond with a current annual yield of 9.4 percent

A 30-year Treasury bond with a current annual yield of 8.7 percent

Ninety-day commercial paper with a current annual yield of 6.2 percent

Common stock that has been appreciating in price 8 percent annually, on average, and paying a quarterly dividend that is the equivalent of a 5 percent annual yield

A mortgage score which is in first lien position,

Taking priority over all other liens

A mortgage score which is in first lien position,

Taking priority over all other liens

ABA CTFA Practice Test 4 - Free Online Exam Prep & Questions

When the market's required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:

A premium

A discount

cannot be determined without more information

Face value

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