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Exam Code : CTFA
Exam Name : Certified Trust and Financial Advisor (CTFA)
Vendor Name : "Financial"







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Certified Trust and Financial Advisor (CTFA)


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Question: 440

A person purchased a share of Acme.com common stock exactly one year ago for $45. During the past year the common stock paid an annual dividend of $2.40. The person sold the security today for $85. What is the rate of return the firm has earned?


A. 5.3%

B. 194.2%

C. 88.9%

D. 94.2%




Answer: D



Question: 441

A set of possible values that a random variable can assume and their associated probabilities of occurrence are referred to as .


  1. Probability distribution

  2. The expected return

  3. The standard deviation

  4. Co-efficient of variation




Answer: A



Question: 442

A statistical measure of the variability of a distribution around its mean is referred to as

.


  1. Probability distribution

  2. The expected return

  3. The standard deviation

  4. Co-efficient of variation




Answer: C



Question: 443

The weighted average of possible returns, with the weights being the probabilities of occurrence is referred to as .


  1. Probability distribution

  2. The expected return

  3. The standard deviation

  4. Co-efficient of variation




Answer: B



Question: 444

Which of the following statements regarding covariance is correct?


  1. Covariance always lies in the range -1 to +1

  2. Covariance, because it involves a squared value, must always be a positive number (or zero)

  3. Low co-variances among returns for different securities leads to high portfolio risk

  4. Co-variances can take on positive, negative, or zero values




Answer: D



Question: 445

Total portfolio risk is .


  1. Equal to systematic risk plus non-diversifiable risk

  2. Equal to avoidable risk plus diversifiable risk

  3. Equal to systematic risk plus unavoidable risk

  4. Equal to systematic risk plus diversifiable risk




Answer: D



Question: 446


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


  1. Bear market

  2. Bull market

  3. OTC

  4. Dealers market




Answer: B



Question: 447

is a condition of the markets typically associated with investor pessimism and economic slowdown; characterized by generally falling securities prices.


  1. Bear market

  2. Bull market

  3. OTC

  4. Dealers market




Answer: B



Question: 448

A person who buys and sells securities on behalf of clients and gives them investment advice and information is called:


  1. Stockholder

  2. Account executive

  3. Financial consultant

  4. All are one and the same




Answer: D



Question: 449

A broker is:


  1. Far more than a salesperson


  2. Mostly interested in his own commission

  3. May not be socially known

  4. Can trade your stock without your permission




Answer: A, B



Question: 450

A broker who, in addition to executing clients’ transactions, offers a full array of brokerage services is:


  1. Full-service broker

  2. Discount broker

  3. Online broker

  4. OTC broker




Answer: A