CTFA

CTFA practice questions, page 9 of 35, with answer review and explanations.

Question 41

Cash surplus divided by net income (after tax); indicates relative amount of cash surplus achieved during a given period is:

  1. Solvency ratio
  2. Liquidity ratio
  3. Savings ratio
  4. Debt service ratio

Question 42

Total monthly loan payments divided by monthly gross (before-tax) income; provides a measure of the ability to pay debts promptly is:

  1. Solvency ratio
  2. Liquidity ratio
  3. Savings ratio
  4. Debt service ratio

Question 43

A cash budget is the valuable money management tool that helps you EXCEPT:

  1. Maintain the necessary information to monitor and control your finances
  2. Decide how to allocate your income to reach your financial goals
  3. Implement a system of disciplined spending-as opposed to just existing from one paycheck to the next
  4. Enhance needles spending so you can increase the funds allocated to savings and investments

Question 44

Budget control schedule is:

  1. A summary that shows how actual income and expenses compare with the various budget categories
  2. A summary that shows how actual income and expenses compare with the various budget categories and where variances (surplus or deficit) exist
  3. A graphical presentation of cash flows
  4. The interest earned each year

Question 45

"Shareholder wealth" in a firm is represented by:

  1. The number of people employed in the firm
  2. The book value of the firm's assets less the book value of its liabilities
  3. The amount of salary paid to its employees
  4. The market price per share of the firm's common stock