Question 1

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:

Accepted Answer

A)  Commodity transaction 
B)  Mutual funds audit 
C)  Bond audit 
D)  None of these

Question 2

If your credit card is stolen and the thief runs up a total debt of $1,000, but you notify the issuer of the card as soon as you discover it is missing, what is the maximum amount that you can be forced to pay according to federal law?

Accepted Answer

A)  Nothing 
B)  $50 
C)  $500 
D)  $1000

Question 3

All of the following are the causes of change in investor's circumstances, EXCEPT:

Accepted Answer

A)  Investment horizon changes 
B)  Liquidity requirement changes 
C)  Authority circumstance changes 
D)  tax circumstances changes

Question 4

A sound portfolio statement helps to protect the client against a portfolio manager's:

Accepted Answer

A)  Financial behavior 
B)  Inappropriate investment 
C)  Unethical behavior 
D)  Hedging

Question 5

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

Accepted Answer

A)  Strong form efficiency 
B)  Weak form efficiency 
C)  Semi strong form efficiency 
D)  None of the given options

Question 6

Insurance agents act as contractors in groups who express one or more entity with express authority to act for the entity in dealing with insured.

Accepted Answer

A) True 
 B)False

Question 7

Many savings programs are protected by the federal government against loss. Which of the following is Not?

Accepted Answer

A)  A bond issued by one of the 50 states 
B)  A U.S. Treasury bond 
C)  A U.S. savings bond 
D)  A certificate of deposit at the bank

Question 8

Annuities can be purchased through the following methods EXCEPT:

Accepted Answer

A)  Single payment deferred 
B)  Periodic payment deferred 
C)  Immediate payment 
D)  Single payment accrued

Question 9

The SEC rules clarify that management's assessment and report is limited to internal control over financial reporting.

Accepted Answer

A) True 
 B)False

Question 10

Final approval should be obtained prior to placing a new system into operation is the activity that can be fall into which control?

Accepted Answer

A)  Organizations and operations control 
B)  System development control 
C)  Access control 
D)  Procedural control

Question 11

In which of the following cases resistance occurs?

Accepted Answer

A)  Inability to break below prior high 
B)  Inability to break below prior low 
C)  Inability to surpass prior high 
D)  Inability to repair beyond prior low

Question 12

When policy periods expire, the premiums written are earned and are recognized as __________.

Accepted Answer

A)  Liabilities 
B)  Expenses 
C)  Revenues 
D)  None of the above

Question 13

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

Accepted Answer

A)  ISECTS 
B)  LOTS 
C)  KATS 
D)  PETS

Question 14

Close-end funds are traded on:

Accepted Answer

A)  A primary market 
B)  Secondary market 
C)  Tertiary market 
D)  Are not traded anywhere

Question 15

Which of the following measures the sensitivity of the asset's price to interest rate movements, expressed as a number of years?

Accepted Answer

A)  Duration 
B)  Yield to maturity 
C)  Convexity 
D)  Immunization

Question 16

All of the following are the forms of risk, EXCEPT:

Accepted Answer

A)  Political risks 
B)  Interest rate risks 
C)  Presented risks 
D)  Economic risks

Question 17

Which of the following is a 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 18

What provide for monetary compensation to third parties for failure by the insured to perform specifically covered acts with in a state period?

Accepted Answer

A)  Worker compensation pools 
B)  Multiple perils 
C)  Surety bonds 
D)  Inter-insurance act

Question 19

If interest rates fall, a bond issuer may decide to pay off (or "retire") its debt and issue new bonds that pay a lower rate. When this happens, the fund may not be able to reinvest the proceeds in an investment with a high return or yield. This is an example of:

Accepted Answer

A)  Credit risk in bond funds 
B)  Prepayment risk in bond funds 
C)  Interest rate risk in bond funds 
D)  All of these

Question 20

Defined benefits & defined contribution plans and individual retirement accounts are commonly administered:

Accepted Answer

A)  Corporate Trusts 
B)  Charitable Trusts 
C)  Estate Administrations 
D)  Employee benefit trusts

Exam 2: Certified Trust and Financial Advisor