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ABA CTFA Practice Test - Questions Answers, Page 68

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In which of the following accounts the trading charges are high?

A.
Savings account
A.
Savings account
Answers
B.
System account
B.
System account
Answers
C.
Personal account
C.
Personal account
Answers
D.
Cash account
D.
Cash account
Answers
Suggested answer: D

Which of the following terms refer to the recurring and fluctuating levels of economic activity that an economy experiences over a long period of time?

A.
Claims cycle
A.
Claims cycle
Answers
B.
Reaction cycle
B.
Reaction cycle
Answers
C.
Business cycle
C.
Business cycle
Answers
D.
Capital cycle
D.
Capital cycle
Answers
Suggested answer: C

Which one of the following is correct formula for calculating operating margin?

A.
Net Profit/Net Sales
A.
Net Profit/Net Sales
Answers
B.
Net income/Net Sales
B.
Net income/Net Sales
Answers
C.
Operating income/Net Sales
C.
Operating income/Net Sales
Answers
D.
Operating income/credit sales
D.
Operating income/credit sales
Answers
Suggested answer: C

_____ do not change the collective wealth of shareholders.

A.
Stock splits
A.
Stock splits
Answers
B.
Bonus shares
B.
Bonus shares
Answers
C.
Right shares
C.
Right shares
Answers
D.
All of the following
D.
All of the following
Answers
Suggested answer: D

Which of the following is the reason stock prices behave the way they do at resistance lines?

A.
Many investors want to buy at this price
A.
Many investors want to buy at this price
Answers
B.
Market makers resist moving prices lower than this price
B.
Market makers resist moving prices lower than this price
Answers
C.
Many investors want to sell at this price
C.
Many investors want to sell at this price
Answers
D.
Market makers support prices at this level
D.
Market makers support prices at this level
Answers
Suggested answer: C

Which of the following ratios are of more concern for the shareholders?

A.
Liquidity and profitability
A.
Liquidity and profitability
Answers
B.
Liquidity and leverage
B.
Liquidity and leverage
Answers
C.
Profitability and activity
C.
Profitability and activity
Answers
D.
Profitability and leverage
D.
Profitability and leverage
Answers
Suggested answer: D

More investors are using technical analysis now than in earlier periods because:

A.
Investors are able to know the quantitative calculations of technical analysis
A.
Investors are able to know the quantitative calculations of technical analysis
Answers
B.
More business schools are now teaching technical analysis
B.
More business schools are now teaching technical analysis
Answers
C.
The Internet makes more data available to track stock prices
C.
The Internet makes more data available to track stock prices
Answers
D.
There is now more empirical evidence supporting technical analysis
D.
There is now more empirical evidence supporting technical analysis
Answers
Suggested answer: D

Which of the following statements hold TRUE for ask price?

A.
It is the price at which a broker is willing to sell a certain security
A.
It is the price at which a broker is willing to sell a certain security
Answers
B.
It is the price at which a broker is willing to buy a certain security
B.
It is the price at which a broker is willing to buy a certain security
Answers
C.
It is the quoted price in an order to buy shares of a company
C.
It is the quoted price in an order to buy shares of a company
Answers
D.
It is the rate at which a dealer will buy the base currency
D.
It is the rate at which a dealer will buy the base currency
Answers
Suggested answer: A

All of the following are characteristics of stop orders EXCEPT:

A.
Protecting profits
A.
Protecting profits
Answers
B.
Minimizing losses
B.
Minimizing losses
Answers
C.
Rapid execution
C.
Rapid execution
Answers
D.
It is seldom used by investors
D.
It is seldom used by investors
Answers
Suggested answer: C

All of the following are the problems associated to the Dividend Discount Model, EXCEPT:

A.
This model need infinite stream of dividends
A.
This model need infinite stream of dividends
Answers
B.
This model has uncertain dividend stream
B.
This model has uncertain dividend stream
Answers
C.
This model must estimate future dividends
C.
This model must estimate future dividends
Answers
D.
This model requires constant earnings per share
D.
This model requires constant earnings per share
Answers
Suggested answer: D
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