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ABA CTFA Practice Test - Questions Answers, Page 13

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Question 121

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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 premium
A discount
A discount
cannot be determined without more information
cannot be determined without more information
Face value
Face value
Suggested answer: A
asked 16/09/2024
Dave Stacey
36 questions

Question 122

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Virgo Airlines will pay a $4 dividend next year on its common stock, which is currently selling at $100 per share. What is the market's required return on this investment if the dividend is expected to grow at 5% forever?

4 Percent
4 Percent
5 Percent
5 Percent
7 Percent
7 Percent
9 Percent
9 Percent
Suggested answer: D
asked 16/09/2024
Rajesh Tripathy
34 questions

Question 123

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Interest rates and bond prices:

Move in the same direction
Move in the same direction
Move in opposite directions
Move in opposite directions
Sometimes move in the same direction, sometimes in opposite directions
Sometimes move in the same direction, sometimes in opposite directions
Have no relationship with each other (i.e., they are independent)
Have no relationship with each other (i.e., they are independent)
Suggested answer: B
asked 16/09/2024
Bahman Talachian
34 questions

Question 124

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The expected rate of return on a bond if bought at its current market price and held to maturity.

Yield to maturity
Yield to maturity
Current yield
Current yield
Coupon Yield
Coupon Yield
Capital gains yield
Capital gains yield
Suggested answer: A
asked 16/09/2024
Minoel Prendi
37 questions

Question 125

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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 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 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)
They can open joint account that allows either one to write checks (the most common type of joint account)
All of the above
All of the above
Suggested answer: D
asked 16/09/2024
Lara Umemoto
55 questions

Question 126

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

Always right checks in ink
Always right checks in ink
Include the name of the person being paid the date, and the amount of the check
Include the name of the person being paid the date, and the amount of the check
Note the check's purpose on the check
Note the check's purpose on the check
Sign the check in a different way than on the signature card
Sign the check in a different way than on the signature card
Suggested answer: D
asked 16/09/2024
Hector Moreno
47 questions

Question 127

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______________ is the result writing a check for an amount greater than the current account balance.

Overdrafts
Overdrafts
Undercrofts
Undercrofts
Checkbook ledger
Checkbook ledger
Overdraft protection
Overdraft protection
Suggested answer: A
asked 16/09/2024
Sterling White
50 questions

Question 128

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It is a booklet provided with a supply of checks, used to maintain accurate records of all checking account transactions.

Overdrafts
Overdrafts
Undercrofts
Undercrofts
Checkbook ledger
Checkbook ledger
Overdraft protection
Overdraft protection
Suggested answer: C
asked 16/09/2024
Tim Klein
41 questions

Question 129

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An arrangement between the account holder and the depository institution wherein the institution automatically pays a check that overdraws the account is called:

Overdrafts
Overdrafts
Undercrofts
Undercrofts
Checkbook ledger
Checkbook ledger
Overdraft protection
Overdraft protection
Suggested answer: D
asked 16/09/2024
Anna Pytka
38 questions

Question 130

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Diversification__________:

Allows you to profit in any market
Allows you to profit in any market
Is a way to reduce volatility of your investments
Is a way to reduce volatility of your investments
Is the only way to profit in the long run
Is the only way to profit in the long run
Requires investing in hundreds of funds
Requires investing in hundreds of funds
Suggested answer: B
asked 16/09/2024
AHOPkos Varga
31 questions
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