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ABA CTFA Practice Test - Questions Answers, Page 10

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Question 91

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

Letter of credit
Letter of credit
Revolving credit agreement
Revolving credit agreement
Line of credit
Line of credit
Trade credit
Trade credit
Suggested answer: B
asked 16/09/2024
Thomas Schmitt
49 questions

Question 92

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

Inventory and/or receivables
Inventory and/or receivables
Common Stocks and bonds
Common Stocks and bonds
Real estate
Real estate
Machinery
Machinery
Suggested answer: A
asked 16/09/2024
Vladimir Kosintsov
41 questions

Question 93

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The investment proposal with the greatest relative risk would have:

The highest standard deviation of net present value
The highest standard deviation of net present value
The highest coefficient of variation of net present value
The highest coefficient of variation of net present value
The highest expected value of net present value
The highest expected value of net present value
The lowest opportunity loss likelihood
The lowest opportunity loss likelihood
Suggested answer: B
asked 16/09/2024
Jeff Fazio
49 questions

Question 94

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

$40
$40
$30
$30
$40-$85
$40-$85
$90
$90
Suggested answer: C
asked 16/09/2024
Emergya Ingenieria SLU Emergya Ingenieria SLU
29 questions

Question 95

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

Independent over time
Independent over time
Risk-free
Risk-free
Related to the cash flows in previous periods
Related to the cash flows in previous periods
Known with certainty
Known with certainty
Suggested answer: C
asked 16/09/2024
James Sutter
39 questions

Question 96

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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

Project A dominates project B
Project A dominates project B
Project B dominates project A
Project B dominates project A
Project A is more risky and should offer greater expected value
Project A is more risky and should offer greater expected value
Each project is high on one variable, so the two are basically equal
Each project is high on one variable, so the two are basically equal
Suggested answer: A
asked 16/09/2024
Heng Tan
35 questions

Question 97

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

0
0
0.5
0.5
1
1
-1
-1
Suggested answer: A
asked 16/09/2024
Sergio da Costa
36 questions

Question 98

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Managerial options can be viewed as:

Methods for reducing agency risk through the use of incentives
Methods for reducing agency risk through the use of incentives
Methods for reducing total firm risk through diversification
Methods for reducing total firm risk through diversification
Strategies for increasing management compensation
Strategies for increasing management compensation
Opportunities for altering management decisions in the future
Opportunities for altering management decisions in the future
Suggested answer: D
asked 16/09/2024
Victor Avila
35 questions

Question 99

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Checkbook ledger:

Is for informal use
Is for informal use
Is a booklet provided with a supply of check
Is a booklet provided with a supply of check
Used to maintain accurate record
Used to maintain accurate record
Both B and C are correct
Both B and C are correct
Suggested answer: D
asked 16/09/2024
Antoine CHEA
29 questions

Question 100

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Assume that you purchase a car for $20,000 in September. You make a down payment of $3000 and finance the remaining amount $17000 with a 4-year, 5.5% installment loan payable monthly. Your September 30 income statement would show a cash expenditure of $3000, and each subsequent monthly income statement would your monthly loan payment of:

$395
$395
$495
$495
$795
$795
$295
$295
Suggested answer: A
asked 16/09/2024
Babatunde Badiru
43 questions
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