Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
certdemy free pracrtice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following statement regarding inflation adjusted return is / are true?
I. Inflation does not reduces the purchasing power of an investor’s funds.
II. Removing the effects of inflation from the return of an investment allows the investor to see the true earning potential of the security.
III. CPI, is the index used to measure inflation.
IV. An inflation-adjusted return is a rate of return that accounts for inflation’s effects.Correct
Inflation-adjusted return, also known as real return, is the return of an investment reduced by the rate of inflation.This is so measured because inflation reduces the purchasing power of an investor’s funds. A long-term investment then should be adjusted for inflation to determine its real return.
Incorrect
Inflation-adjusted return, also known as real return, is the return of an investment reduced by the rate of inflation.This is so measured because inflation reduces the purchasing power of an investor’s funds. A long-term investment then should be adjusted for inflation to determine its real return.
-
Question 2 of 10
2. Question
How can investor reduce the impact of taxes on his/her return?
I. By investing in short term capital gains.
II. By investing in municipal bonds fund.
III. By investing in municipal bonds.
IV. By investing in long term capital gains.Correct
The most common way of reducing the impact of taxes on returns is by investing in tax-exempt investment vehicles, such as municipal bonds and municipal bond funds. Long- term capital gains are taxed at a rate lower than the investor’s earned incomerate.
Incorrect
The most common way of reducing the impact of taxes on returns is by investing in tax-exempt investment vehicles, such as municipal bonds and municipal bond funds. Long- term capital gains are taxed at a rate lower than the investor’s earned incomerate.
-
Question 3 of 10
3. Question
Which of these statements is true?
I. Bonds are always traded at par.
II. When a bond is bought at a discount to par, the yield to maturity increases.
III. When a bond is traded at par, yield to maturity will equal the coupon rate.
IV. When a bond is purchased at a premium, the yield to maturity will be lower than the sum of the coupon payments.Correct
When a bond is bought at a discount to par, the yield to maturity increases, because when the bond is redeemed, the investor will receive the difference between the purchase price and par value and add that to the interest received to determine the return on investment. If a bond is traded at par, yield to maturity will equal the coupon rate, since it will be redeemed without profit or loss
Incorrect
When a bond is bought at a discount to par, the yield to maturity increases, because when the bond is redeemed, the investor will receive the difference between the purchase price and par value and add that to the interest received to determine the return on investment. If a bond is traded at par, yield to maturity will equal the coupon rate, since it will be redeemed without profit or loss
-
Question 4 of 10
4. Question
Company Z’s 20-year $1,000 par bonds have a price of $970 and annual coupon rate of 9%. Find its current yield.
I. 10.5%
II. 10%
III. 9%
IV. 9.28%Correct
This can be expressed as follows: annual dividends received per share/share price = current yield.
Incorrect
This can be expressed as follows: annual dividends received per share/share price = current yield.
-
Question 5 of 10
5. Question
Which statements holds true in case of benchmark portfolio?
I. Less expensive for investors to participate.
II. A preset list of securities to be used to compare the performance of an actual portfolio.
III. Based on the theory that its impossible to outperform the market.
IV. Less expensive to manage.Correct
Benchmark portfolios are often viewed as a product of the efficient market theory, the theory that it is impossible to outperform the market. Benchmarked portfolios are often less expensive to manage and less expensive for investors to participate
Incorrect
Benchmark portfolios are often viewed as a product of the efficient market theory, the theory that it is impossible to outperform the market. Benchmarked portfolios are often less expensive to manage and less expensive for investors to participate
-
Question 6 of 10
6. Question
Which statement holds true for a joint accounts?
I. The joint owners may be designated as joint tenants with rights of survivorship.
II. Joint account is a type of bank account that allows more than one person to own and manage it.
III.Everyone named on the account has equal access to funds, regardless of who deposited the money.
IV. When selling a security under this signature of one owner would also suffice.Correct
Joint accounts are accounts owned by multiple adult clients. Each adult owner retains some measure of power over the account. The advisor should collect suitability information for all owners of a joint account. When securities are sold from joint accounts, all owners must sign for the securities for the transaction to be qualified as delivery in goodform.
Incorrect
Joint accounts are accounts owned by multiple adult clients. Each adult owner retains some measure of power over the account. The advisor should collect suitability information for all owners of a joint account. When securities are sold from joint accounts, all owners must sign for the securities for the transaction to be qualified as delivery in goodform.
-
Question 7 of 10
7. Question
Which of the following statement stands true for an affiliated person?
I. An affiliated person is someone in a position to influence the actions of a corporation.
II. They cant influence the actions of a corporation.
III. Affiliated persons may also be called control persons.
IV. Affiliated persons usually include directors, officers, owners of more than 5% of the firm’s outstanding stock.Correct
An affiliated person is a person who owns (either directly or indirectly), controls, or holds the power to vote five percent or greater of issued stock of an investment company. This definition also includes people who control or are controlled by employees and directors of the investment company. Although greater than five percent voting power makes the person an affiliated person.
Incorrect
-
Question 8 of 10
8. Question
Which of these statements are true?
I. A controlling person is any person who owns twenty-five percent or more of that company’s issued stock.
II. Prospectuses are legally required to be filed with the SEC as part of the Initial Public Offering (IPO) process.
III. A SEC filing is a financial statement or other formal document submitted to the Securities and Exchange Commission.
IV. Annual report includes: Audited statements of income, financial position, cash flow, and a summary of the company’s financial data.Correct
Acompany that is publicly traded and listed on any major exchange must be registered with the Securities Exchange Commission and provide regular statements of that company’s condition, or financial statements to the SEC. A controlling person, or a person said to own a controlling share of issued stock, is any person who owns twenty-five percent or more of that company’s issued stock.
Incorrect
Acompany that is publicly traded and listed on any major exchange must be registered with the Securities Exchange Commission and provide regular statements of that company’s condition, or financial statements to the SEC. A controlling person, or a person said to own a controlling share of issued stock, is any person who owns twenty-five percent or more of that company’s issued stock.
-
Question 9 of 10
9. Question
Which statements hold true for rule 147?
I. The company can sell the securities to individuals residing in different states also.
II. The company must be incorporated in the state in which it is offering the securities.
III.The company must carry out a significant portion of its business in that state, which is defined as at least 80% of its operations.
IV. Provides an exemption from federal registration of a security if the security is sold to a person within the same state as that of the issuers.Correct
Rule 147 is a rule under the Uniform Securities Act (USA) that provides an exemption from federal registration of a security if the security is sold to a person within the same state as the issuer’s location and place of business
Incorrect
Rule 147 is a rule under the Uniform Securities Act (USA) that provides an exemption from federal registration of a security if the security is sold to a person within the same state as the issuer’s location and place of business
-
Question 10 of 10
10. Question
Which of the following statement is/are true?
I. IRR is use to determine the viability of an investment.
II. NPV is used in capital budgeting to analyze the profitability of a projected investment or project.
III.Descriptive statistics in short describe and understand the features of a specific data set by giving short summaries about the sample and measures of the data.
IV. The most recognized types of descriptive statistics are the mean, median, and mode.Correct
The most useful descriptive statistics pertaining to the securities industries are the measures of central tendency (mean, median, and mode).These measurements are useful to investors, allowing them to determine if a security matches their risk tolerance and return needs. It is used to determine the viability of an investment.
Incorrect
The most useful descriptive statistics pertaining to the securities industries are the measures of central tendency (mean, median, and mode).These measurements are useful to investors, allowing them to determine if a security matches their risk tolerance and return needs. It is used to determine the viability of an investment.