Question 1

If the following are balance sheet changes: $5,005 decrease in accounts receivable $7,000 decrease in cash $12,012 decrease in notes payable $10,001 increase in accounts payablea "use" of funds would be the:

Options :

A : $7,000 decrease in cash

B : $5,005 decrease in accounts receivable

C : $10,001 increase in accounts payable

D : . $12,012 decrease in notes payable

Answer: D

Question 2

The actual market value of a right will differ from its theoretical value for all of the following reasons Except for:

Options :

A : The size of the firm-s marginal tax rate

B : The amount of transactions costs incurred

C : Investor speculation

D : The irregular exercise and sale of rights over the subscription period

Answer: A

Question 3

Stephen is about to commence taking benefits from his personal pension scheme, which includes protected rights. He should be aware that:

Options :

A : He can take up to 25% of the total fund as a pension commencement lump sum

B : He has the right to exercise the open market option

C : His whole pension fund must provide limited price indexation in payment

D : The value of the protected rights element will not count towards the lifetime allowance

Answer: A,B

Question 4

Once the dealer accepts your offer, you complete the purchase transaction and take the delivery of the car. If you are not paying cash for the car, you can arrange financing:

Options :

A : Through a consumer finance company

B : At your bank

C : A credit union

D : All of these

Answer: D

Question 5

The two most common types of dollar rolls are:

Options :

A : Fixed-coupon and yield-maintenance agreements

B : Variable-coupon and yield-maintenance agreements

C : Fixed-coupon and Accounting agreements

D : Variable -coupon and Principal agreements

Answer: A

Free CTFA Mock Exam – Practice Online Confidently

Buying Options: