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ABA CTFA Practice Test - Questions Answers, Page 15
Question list
List of questions
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Question 141
Bonds usually pay interest _________ per year.
A.
Once
B.
Twelve times
C.
Twice
D.
Four times
Suggested answer: C
Question 142
Coupon rate is paid until the bond ____________.
A.
Matures
B.
Expires
C.
Is sold
D.
Reach to its half life to maturity
Suggested answer: A
Question 143
Bond's par value is known as __________ value.
A.
Call
B.
Maturity
C.
Face
D.
Coupon
Suggested answer: C
Question 144
Time consumed in clearing a check through the banking system.
A.
Processing float
B.
Deposit float
C.
Collection float
D.
Availability float
Suggested answer: D
Question 145
Commercial paper is essentially:
A.
Another form of junk bond
B.
A short-term unsecured corporate IOU
C.
An intermediate-term corporate bond
D.
A certificate that may be exchanged for a share of common stock at a specified future date
Suggested answer: B
Question 146
Concentration banking:
A.
Increases idle balances
B.
Moves excess funds from a concentration bank to regional banks
C.
Is less important during periods of rising interest rates
D.
improves control over corporate cash
Suggested answer: D
Question 147
Which would be an appropriate investment for temporarily idle cash that will be used to pay quarterly dividends three months from now?
A.
A long-term Aaa-rated corporate bond with a current annual yield of 9.4 percent
B.
A 30-year Treasury bond with a current annual yield of 8.7 percent
C.
Ninety-day commercial paper with a current annual yield of 6.2 percent
D.
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
Suggested answer: C
Question 148
According to the Bond Equivalent Yield (BEY) method, the yield on a $1,000, 13-week US Treasury bill purchased for $960 would be closest to .
A.
16 Percent
B.
16.7 Percent
C.
17 Percent
D.
17.8 Percent
Suggested answer: B
Question 149
Accounts receivable conversion (a.k.a., check conversion) is the conversion of a paper check to
A.
An electronic check image
B.
A 'substitute check'
C.
An ACH debit transaction
D.
A foreign currency
Suggested answer: C
Question 150
It is a type of flexible mortgage where the payments increase for a specified period of time and then level off. What is it?
A.
Flexible payment mortgage
B.
Graduated payment mortgage
C.
Constant payment mortgage
D.
Variable payment mortgage
Suggested answer: B
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