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ABA CTFA Practice Test - Questions Answers, Page 25

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Question 241

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A way to analyze whether debt or lease financing would be preferable is to:

Compare the net present values under each alternative, using the cost of capital as the discount rate
Compare the net present values under each alternative, using the cost of capital as the discount rate
Compare the net present values under each alternative, using the after-tax cost of borrowing as the discount rate
Compare the net present values under each alternative, using the after-tax cost of borrowing as the discount rate
Compare the payback periods for each alternative
Compare the payback periods for each alternative
Compare the effective interest costs involved for each alternative
Compare the effective interest costs involved for each alternative
Suggested answer: B
asked 16/09/2024
Gianni Masaracchia
49 questions

Question 242

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A conventional revolving credit agreement allows:

To borrow a fixed amount for the entire commitment period
To borrow a fixed amount for the entire commitment period
To borrow for a short-period with a right to renew the loan during the commitment period
To borrow for a short-period with a right to renew the loan during the commitment period
To possibly include a provision to convert the credit agreement into a term loan contract at maturity
To possibly include a provision to convert the credit agreement into a term loan contract at maturity
All of the above
All of the above
Suggested answer: D
asked 16/09/2024
mohammed zakir
42 questions

Question 243

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The type of lease that includes a third party, a lender, is called a(n):

Sale and leaseback
Sale and leaseback
Direct leasing arrangement
Direct leasing arrangement
Leveraged lease
Leveraged lease
Operating lease
Operating lease
Suggested answer: C
asked 16/09/2024
FARIZA MANNAN
42 questions

Question 244

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One advantage of a financial lease is that:

It has a shorter maturity than term loans
It has a shorter maturity than term loans
It never appears as a liability on the balance sheet
It never appears as a liability on the balance sheet
It eliminate the needs to make periodic payments
It eliminate the needs to make periodic payments
It provides a way to indirectly depreciate land
It provides a way to indirectly depreciate land
Suggested answer: D
asked 16/09/2024
Claudious Utete
44 questions

Question 245

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Medium-term notes (MTNs) have maturities that range up to:

One year (But no more)
One year (But no more)
Two years (but no more)
Two years (but no more)
Ten years (but no more)
Ten years (but no more)
Thirty years (or more)
Thirty years (or more)
Suggested answer: D
asked 16/09/2024
Tammy Tran
34 questions

Question 246

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A direct lease, a sale and leaseback, and a leveraged lease are all examples of:

Operating leases
Operating leases
Financial leases
Financial leases
Full-service leases
Full-service leases
'off-balance sheet' methods of financing
'off-balance sheet' methods of financing
Suggested answer: B
asked 16/09/2024
Bahman Talachian
31 questions

Question 247

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One of the components of monthly mortgage insurance is homeowner's insurance. Its cost varies with factor/s as:

Age of the house
Age of the house
Location
Location
Material used in construction
Material used in construction
A and B Only
A and B Only
Suggested answer: A, B, C
asked 16/09/2024
Charles Marlin
43 questions

Question 248

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Sale of real estate property in which the proceeds are less than the balance owed on loan secured by property sold.

Foreclosure
Foreclosure
Real estate short sale
Real estate short sale
Multiple listing service
Multiple listing service
None of these
None of these
Suggested answer: B
asked 16/09/2024
Brandy Butman
38 questions

Question 249

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Real estate commissions generally range _______ for new homes and ________ for previously occupied homes or resales. It may be possible to negotiate a lower decision with your broker or to find or one who charges a flat fee.

From 5%-6% for new and from 6%-7%
From 5%-6% for new and from 6%-7%
From 4%-6% for new and from 6%-9%
From 4%-6% for new and from 6%-9%
From 4%-6% for new and from 8%-9%
From 4%-6% for new and from 8%-9%
From 4%-6% for new and from 6%-7%
From 4%-6% for new and from 6%-7%
Suggested answer: A
asked 16/09/2024
Ricardo Andres
35 questions

Question 250

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It is the process of arranging with a mortgage lender, in advance of buying a home, to obtain the amount of mortgage financing the lender deems affordable to home buyer.

Multiple listing service
Multiple listing service
Prequalification
Prequalification
Earnest money deposit
Earnest money deposit
Contingency clause
Contingency clause
Suggested answer: B
asked 16/09/2024
Asad yaseen
43 questions
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