CTFA

CTFA practice questions, page 28 of 35, with answer review and explanations.

Question 136

Concentration banking:

  1. Increases idle balances
  2. Moves excess funds from a concentration bank to regional banks
  3. Is less important during periods of rising interest rates
  4. improves control over corporate cash

Question 137

Which would be an appropriate investment for temporarily idle cash that will be used to pay quarterly dividends three months from now?

  1. A long-term Aaa-rated corporate bond with a current annual yield of 9.4 percent
  2. A 30-year Treasury bond with a current annual yield of 8.7 percent
  3. Ninety-day commercial paper with a current annual yield of 6.2 percent
  4. Common stock that has been appreciating in price 8 percent annually, on average, and paying a quarterly dividend that is the equivalent of a 5 percent annual yield

Question 138

According to the Bond Equivalent Yield (BEY) method, the yield on a $1,000, 13-week US Treasury bill purchased for $960 would be closest to:

  1. 16 Percent
  2. 16.7 Percent
  3. 17 Percent
  4. 17.8 Percent

Question 139

Accounts receivable conversion (a.k.a., check conversion) is the conversion of a paper check to

  1. An electronic check image
  2. A "substitute check"
  3. An ACH debit transaction
  4. A foreign currency

Question 140

It is a type of flexible mortgage where the payments increase for a specified period of time and then level off. What is it?

  1. Flexible payment mortgage
  2. Graduated payment mortgage
  3. Constant payment mortgage
  4. Variable payment mortgage