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ABA CTFA Practice Test - Questions Answers, Page 58

Question list

List of questions

Question 571

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____________ swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets.

Question 572

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Standard and poor's 500 index, the Dow Jones Industrial average, or the Toronto stock Exchange index is the examples of:

Question 573

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The main objective/s of an audit of swaps is/are:

Question 574

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Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

Question 575

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Occasionally, a company will issue additional shares of its stocks, called ____________, to raise additional capital.

Question 576

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Customer accounts: Ensure that the firm is exercising due diligence in the opening and supervision of customer accounts. The procedures should be formalized in writing and in accordance with the ru

Question 577

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Call provisions are often part of ______________, but usually not bonds issued by ______________.

Question 578

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Audit objectives that apply to one sales portion are all EXCEPT:

Question 579

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Which of the following is not an audit objective of a commodity department?

Question 580

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I- With reference to the granting of customer credit lines a thorough analysis of the customer's overall financial position is performed prior to trading authorization. II-confirmations of each tra

Question 571

____________ swaps give companies extra flexibility to exploit their comparative advantage in their respective borrowing markets.

Fixed-floating swaps

Currency swaps

Interest rate swaps

None of these

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Question 572

Standard and poor's 500 index, the Dow Jones Industrial average, or the Toronto stock Exchange index is the examples of:

Equity indices

Stock exchange indices

OTC market indices

All of these

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Question 573

The main objective/s of an audit of swaps is/are:

To determine the adequacy and effectiveness of controls relating to rate swap transactions

To ascertain that swap transaction are properly recorded in accordance with their term

To ensure that the company's financial statements and regulatory reports properly reflect in accordance with generally accepted accounting principles, the results of swap activity

All of these

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Question 574

Adequate procedures and controls associated with swap transactions should exist to help minimize the risks inherent in transaction process. Example/s of these controls may include:

A daily reconciliation of traders' positions should be performed

To minimize market risk in hedge transactions: There should be independent sign-off procedures for hedging models All hedge strategies should be clearly defined All software and products should be secure and temper resistant

All transactions should be authorized and affirmed

All of these

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Question 575

Occasionally, a company will issue additional shares of its stocks, called ____________, to raise additional capital.

Secondary Offering

IPO

Private Placement

Preferred Offering

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Question 576

Customer accounts:

Ensure that the firm is exercising due diligence in the opening and supervision of customer accounts. The procedures should be formalized in writing and in accordance with the rules and regulations of the appropriate regulatory authority. Ensure that daily customer positions and option exercises are in accordance with the limits established by the appropriate exchange. Verify that commissions generated by customer trades are properly calculated and posted to the general ledger.

This is one of the primary audit objectives of stock and options

This is one of the primary audit objectives of swaps

This is one of the primary audit objectives of bonds

None of these

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Question 577

Call provisions are often part of ______________, but usually not bonds issued by ______________.

Zero coupon bond, Federal Government bonds

Corporate bonds, Zero coupon bonds

Corporate and municipal bonds, bonds issued by Federal Government

None of these

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Question 578

Audit objectives that apply to one sales portion are all EXCEPT:

Ensure that daily activity of each salesman is reviewed by head salesman

Ensure that inventory is being accurately market to market on a continuing basis

Ensure customer markups are reasonable relative to NASD

None of these

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Question 579

Which of the following is not an audit objective of a commodity department?

All customer accounts are opened and maintained in accordance with the rules and regulations commodity futures trading commission (CFTC) and the various commodity Exchanges

Adequate control exist to ensure the accuracy and propriety of information contained in regulatory reports, such as the commodity futures trading commission form 1-FR, and the focus report

Verify the accuracy and reporting (inventory reports, fail reports, again reports and profit and loss reports.)

None of these

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Question 580

I- With reference to the granting of customer credit lines a thorough analysis of the customer's overall financial position is performed prior to trading authorization.

II-confirmations of each transaction are sent to customers indicating the quantity, delivery month and the contract price to ensure the integrity of transactions.

III-Original margin deposits in cash or acceptable securities to guarantee performance of contracts are determined in accordance These all are adequate procedures and controls associated with:

Commodity transaction

Mutual funds audit

Bond audit

None of these

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Total 895 questions