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ABA CTFA Practice Test - Questions Answers, Page 66

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Which of the following suggests that people express a different degree of emotion towards gains than towards losses?

A.
Loss aversion
A.
Loss aversion
Answers
B.
Prospect theory
B.
Prospect theory
Answers
C.
Illusion of control
C.
Illusion of control
Answers
D.
Anchoring
D.
Anchoring
Answers
Suggested answer: B

A form of the EMH which states that security prices fully reflect all public and private information.

A.
Strong form efficiency
A.
Strong form efficiency
Answers
B.
Weak form efficiency
B.
Weak form efficiency
Answers
C.
Semi strong form efficiency
C.
Semi strong form efficiency
Answers
D.
None of the given options
D.
None of the given options
Answers
Suggested answer: A

Which of the following is an objective of a tax shelter?

A.
Eliminate tax liabilities
A.
Eliminate tax liabilities
Answers
B.
Postpone tax liabilities as long as possible
B.
Postpone tax liabilities as long as possible
Answers
C.
Reduce tax liabilities as much as possible
C.
Reduce tax liabilities as much as possible
Answers
D.
Shift tax liabilities to other taxpayers
D.
Shift tax liabilities to other taxpayers
Answers
Suggested answer: B

All of the following are examples of financial assets EXCEPT.

A.
Stocks
A.
Stocks
Answers
B.
Transport vehicles
B.
Transport vehicles
Answers
C.
Bonds
C.
Bonds
Answers
D.
Bank deposits
D.
Bank deposits
Answers
Suggested answer: B

Which of the following equation is FALSE?

A.
Total risk = general risk + specific risk
A.
Total risk = general risk + specific risk
Answers
B.
Total risk = market risk + issuer risk
B.
Total risk = market risk + issuer risk
Answers
C.
Total risk = systematic risk + nonsystematic risk
C.
Total risk = systematic risk + nonsystematic risk
Answers
D.
Total risk = un-diversified risk + equity risk
D.
Total risk = un-diversified risk + equity risk
Answers
Suggested answer: D

Which of the following ratios will be used if portfolio's numerous other assets systematic risk of investment is the best?

A.
Treynor reward-to-volatility rati
A.
Treynor reward-to-volatility rati
Answers
B.
Jensen's differential return ratio
B.
Jensen's differential return ratio
Answers
C.
Jennet's return on liquidity ratio
C.
Jennet's return on liquidity ratio
Answers
D.
Sharpe reward-to-variability rati
D.
Sharpe reward-to-variability rati
Answers
Suggested answer: A

Which order will be executed automatically at the current bid or ask price?

A.
Limit order
A.
Limit order
Answers
B.
Market order
B.
Market order
Answers
C.
Stop order
C.
Stop order
Answers
D.
Good till cancelled
D.
Good till cancelled
Answers
Suggested answer: B

Which of the following is the ratio of share price to stockholder equity as measured on the balance sheet?

A.
Price to book value ratio
A.
Price to book value ratio
Answers
B.
Price to sales ratio
B.
Price to sales ratio
Answers
C.
Leverage ratio
C.
Leverage ratio
Answers
D.
Debt coverage ratio
D.
Debt coverage ratio
Answers
Suggested answer: A

Which of the following trading systems is used by the Stock Exchange?

A.
ISECTS
A.
ISECTS
Answers
B.
LOTS
B.
LOTS
Answers
C.
KATS
C.
KATS
Answers
D.
PETS
D.
PETS
Answers
Suggested answer: C

The S&P 500 Composite Stock Index is favored by most institutional investors and money managers. What does S&P stands for?

A.
Sophisticated and Poised
A.
Sophisticated and Poised
Answers
B.
Standard and Poor
B.
Standard and Poor
Answers
C.
Stylish and Permanent
C.
Stylish and Permanent
Answers
D.
Sojourn and Perennial
D.
Sojourn and Perennial
Answers
Suggested answer: B
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