CTFA Online Practice Questions and Answers

When constructing a portfolio for a UK resident basic-rate taxpayer who requires an income, the most tax efficient solution would be achieved by:

A. Only investing in offshore products

B. Holding fixed-interest funds within a stocks and shares ISA

C. Purchasing National Savings and Investments (NSandI) Fixed-Interest Savings Certificates

D. Holding high-yielding equities within a stocks and shares ISA

You are considering two mutually exclusive investment proposals, project A and project B B's expected value of net present value is $1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that

A. Project A dominates project B

B. Project B dominates project A

C. Project A is more risky and should offer greater expected value

D. Each project is high on one variable, so the two are basically equal

In stocks, technical analysis is based on studying:

A. P/E

B. EPS trends

C. Stock fundamentals

D. Stock Charts

The nature and extent of interest rate risk, credit risk, reinsurance risk and other significant risks should be disclosed is required for:

A. Actuarial revenues

B. Actuarial assets

C. Actuarial liabilities

D. Actuarial expenses

Which of the following is the ratio of a company's total market value (price times number of shares) divided by sales?

A. Price to sales ratio

B. Price to book value ratio

C. Debt coverage ratio

D. Leverage ratio

A form of EMH which states that security prices fully reflect all publicly available information is known as:

A. Strong form

B. Week form

C. Semi strong form

D. None of these

Compared to investors with long investment time horizons, investors with short investment time horizons most likely require:

A. Less liquidity and less emphasis on capital appreciation

B. More liquidity and less emphasis on capital appreciation

C. Less liquidity and greater emphasis on capital appreciation

D. More liquidity and greater emphasis on capital appreciation

It is a market condition normally associated with investor optimism, economic recovery, and expansion; characterized by generally rising securities prices.

A. Bear market

B. Bull market

C. OTC

D. Dealers market

Bond prices are expressed as a percentage of:

A. Discount value

B. Par value

C. Future value

D. Intrinsic value

You can use to roughly estimate how many years a given sum of money must earn at a given compound annual interest rate in order to double that initial amount.

A. Rule 415

B. the Rule of 72

C. the Rule of 78

D. Rule 144