IIA-CFSA Online Practice Questions and Answers

Strategic planning is the process of taking a long-term view of the organization, the longer the view, the greater the uncertainty of risks and opportunities. Such reservations can better be handled by:

A. Timely decisions

B. Flexible/ Adaptive plans and processes

C. Periodic risk assessments

D. Focusing on current period organizational activity

Derivates can be effective low cost tools for managing expose experience losses due to:

A. Interest rate change

B. Master agreements

C. Commodity price change

D. All of these

Preferred stock is similar to common stock in that it represents ownership in a corporation. Preferred stockholders generally receive as fixed dividend rate. The types of preferred stock include all of the following EXCEPT:

A. Cumulative preferred stock

B. Non-cumulative preferred stock

C. Participating preferred stock

D. Invertible preferred stock

Some of the countries that do not permit companies to use IAS without a reconciliation to domestic generally accepted accounting principals are all EXCEPT:

A. US (United States), Canada

B. Japan

C. Hong Kong

D. None of these

Interest rate risk arises from differences between the timing of rate changes and the timing of cash flows ( _________ );from changing rate relationships among different yield curves affecting bank activities ( ____________ ); from changing rate relationship across the spectrum of maturities ( ____________ );and from internet-related options embedded in bank products ( _____________ ). Choose the appropriate set.

A. Repricing risk, basic risk, yield curve risk and option risk

B. Basic risk, yield curve risk, option risk and Repricing risk

C. Repricing risk option risk, yield curve risk, and basic risk

D. Basic risk, yield curve risk, option risk and repurchasing risk

Both veteran affairs department and the Federal Housing Administration require an appraisal by a certified or licensed real estate appraiser for transaction valued at:

A. 200,000or more

B. 250,000 or more

C. 225,000-or more

D. 500,000 or more

Which of the following would not generally be a responsibility of an underwriting department?

A. Helping policy owners with requests for information, interpreting policy language,answering questions regarding policy coverage

B. Verifying that the mortality/morbidity rates of the company's insurers do not exceed the rates assumed when the premiums were calculated

C. Considering the applicant's age, weight, physical condition, personal/family history, andother factors to determine the degree of risk

D. Negotiating and managing reinsurance agreements.

Variable life insurance is:

A. Permanent life insurance

B. Temporary life insurance

C. Flexible life insurance

D. None of these

A derivative with a convex payoff-profile at some point before the option's maturity is a simple plan vanilla option. As the option becomes progressively more-in-the money, the rate at which the position makes money increases until a sympathetically approaches the linear payoff of the future. Similarly, as the option becomes progressively more out-of the money, the rate at which the position loses money decreases until that rate becomes zero. This is an example of:

A. Spot rate

B. Non linear derivate

C. Linear derivate

D. None of these

Some objectives of an audit related to mutual funds might include determining that:

A. Mutual fund checks are issued in accordance with firm policies and supported by valid trades

B. Mutual fund purchases are confirmed on a timely basis

C. Mutual fund switches are not authorized by the client

D. All EXCEPT "C"