ABA CTFA Practice Test - Questions Answers, Page 15
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Bonds usually pay interest _________ per year.
A.
Once
B.
Twelve times
C.
Twice
D.
Four times
Coupon rate is paid until the bond ____________.
A.
Matures
B.
Expires
C.
Is sold
D.
Reach to its half life to maturity
Bond's par value is known as __________ value.
A.
Call
B.
Maturity
C.
Face
D.
Coupon
Time consumed in clearing a check through the banking system.
A.
Processing float
B.
Deposit float
C.
Collection float
D.
Availability float
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
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
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
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
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
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
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