Question 1

All of the following is required to calculate the present value figure Except:

Accepted Answer

A)  The amount of future cash flows 
B)  The length of time 
C)  The discount rate 
D)  The retained earnings

Question 2

The profitability of an insurance entity on a statutory basis is generally gauged by:

Accepted Answer

A)  combined ratio and its operating ratio 
B)  single module ratio and its operating ratio 
C)  Net ratio 
D)  Gross ration and actual ratio

Question 3

Which of the following is the current market in which all buying and selling is done on cash or margin basis?

Accepted Answer

A)  Target market 
B)  Historic market 
C)  Regular market 
D)  Borough market

Question 4

Changes in Government rules and regulation will adversely affect which of the following industry?

Accepted Answer

A)  Defensive industry 
B)  Cyclic industry 
C)  Growth industry 
D)  None of the given options

Question 5

The trend lines can have following trends, Except:

Accepted Answer

A)  Upward trend 
B)  Downward trend 
C)  Trend range 
D)  Round phase

Question 6

Risk retention group is:

Accepted Answer

A)  A public entity formed by the members of the public pool primarily to provide business risk competency to the members. 
B)  A business entity formed by the members of the private pool primarily to provide commercial asset insurance to the members. 
C)  An insurance entity formed by the members of the private pool primarily to provide commercial liability insurance to the members. 
D)  An insurance entity formed by the members of the public pool primarily to provide commercial expense insurance to the members.

Question 7

The administration of personal trust accounts is primarily controlled by all of the following EXCEPT:

Accepted Answer

A)  Terms of Governing instrument 
B)  A will 
C)  Trust agreement 
D)  Court order

Question 8

What can be the possible strategy to avoid liability?

Accepted Answer

A)  Understand what causes liability 
B)  Develop you own safety program 
C)  Carry adequate liability insurance 
D)  None of these

Question 9

Insurance entities establish ___________ to investigate and settle some or all of the claims of the member companies.

Accepted Answer

A)  Company competency 
B)  Claim opportunities 
C)  Corrective strategies 
D)  Adjustment bureaus

Question 10

The industries that are least affected by recessions and economic adversity are referred as which of the following?

Accepted Answer

A)  Growth industries 
B)  Cyclical industries 
C)  Interest-sensitive industries 
D)  Defensive industries

Question 11

Several insurance provisions affect a health insurance plan's value to you. Some important provisions address:

Accepted Answer

A)  The persons and places covered 
B)  Cancellation 
C)  Re-existing conditions 
D)  Rehabilitation coverage

Question 12

End users need to hedge the prices at which they can purchase these commodities for instance:

Accepted Answer

A)  A University might want to lock in the price at which it purchases electricity to supply its air conditioning units for upcoming summer months 
B)  An airline wants to lock in the price of the jet fuel it needs to purchase in order to satisfy the peak in seasonal demand for travel 
C)  A cotton producer wants to hedge his exposure to changes in the price of fertilizers or his end product (cotton) 
D)  Only A and B

Question 13

Current yield is defined as:

Accepted Answer

A)  Internal rate of return that equates the prevailing market price with future interest and principle payments 
B)  Approximate yield to call for premium bonds 
C)  Coupon interest divided by average of market and call prices 
D)  Coupon rate expressed as a percent of the prevailing market price

Question 14

Mutual entities, reciprocal or inter-insurance exchanges, public entity risk pools are all principal kinds of:

Accepted Answer

A)  Property and expense insurance organizations 
B)  Feasibility and performance assurance organizations 
C)  Property and liability insurance organizations 
D)  Building and asset related organizations

Question 15

A package of coverage including most property and liability coverage except workers' compensation, automobile insurance and surely bonds is called:

Accepted Answer

A)  Single peril 
B)  Multiple peril 
C)  Property lines 
D)  professional Property

Question 16

Which of the following necessary in order to reduce the huge number of possible investments to a smaller number that can investigate carefully?

Accepted Answer

A)  Securing 
B)  Saving 
C)  Discounting 
D)  None of these

Question 17

In a bar chart what does the red line represents?

Accepted Answer

A)  Stock prices are getting high 
B)  Stock prices are getting low 
C)  Stock prices are closing 
D)  Stock prices are opening

Question 18

The approximate per-share NAV plus any fees the fund imposes is the price:

Accepted Answer

A)  That investors pay to purchase mutual fund 
B)  That investors receive on redemptions 
C)  Per share NAV 
D)  All of these

Question 19

In which of the following markets do the investors cannot short sell?

Accepted Answer

A)  Target market 
B)  Historic market 
C)  Borough market 
D)  Regular market

Question 20

Companies that have capitalization amounts of more than $2 billion are known as _________.

Accepted Answer

A)  Small cap companies 
B)  Mid cap companies 
C)  Growth companies 
D)  Large cap companies

Exam 2: Certified Trust and Financial Advisor