American Bankers Association American Bankers Association Certifications CTFA Questions & Answers

• Question 831:

  The duties of a guardian in guardianship arrangements are similar to those of a trustee. Specifically, the guardian is obligated to: 1) Protect and preserve the assets 2) Submit an inventory and appraisal to the court 3) Retain or divest assets 4) Use principal and income for the benefit of the ward 5) Submit an annual accounting to the court

  A. Only 1.3,4

  B. All of these

  C. Only 1, 2

  D. All except 3

  Correct Answer: D

• Question 832:

  The responsibility of setting an estate includes:

  A. Taking possession of the property included within the descedent's estate

  B. Valuing the estate's property

  C. Paying any debts of the descedent's

  D. All of these

  Correct Answer: D

• Question 833:

  Securities products include:

  1.

  Trusts

  2.

  Annuities

  3.

  Derivatives

  4.

  Stocks

  5.

  Bonds

  6.

  Commodities

  7.

  Mutual Funds

  8.

  Pension Funds

  9.

  Term Loans

  10.

  Asset Management

  11.

  Money Market Products

  A. Only 1, 2, 3,4,5,10,11

  B. Only 1, 3, 5, 10

  C. All except 8, 9

  D. All except 8,9,10

  Correct Answer: C

• Question 834:

  The objective/s of a trust department audit is/ are to:

  A. Detect and prevent irregularities such as errors and fraud

  B. Access adequacy of accounting, operating, and administrative controls and procedures

  C. Determine the quantity of account administration

  D. all of the above

  Correct Answer: D

• Question 835:

  The objective/s of trust department's administration of corporate trust accounts include:

  A. Policies producers ensure compliance with governing instruments, applicable law and accepted fiduciary principles

  II. Deficiencies are identified and corrective action is promptly initiated III. There is sufficient management and staff expertise to administer these accounts IV. Effective policies, procedures and internal controls have been established The legitimate needs of security holders and other interested parties are met in a professional and timely manner

  B. III and IV

  C. I, II and IV

  D. II, III and V

  E. All of these

  Correct Answer: D

• Question 836:

  Personal trust accounts may be:

  A. Living or testamentary

  B. Revocable or irrevocable

  C. Both of these

  D. None of these

  Correct Answer: C

• Question 837:

  Which of the following is the right to sell?

  A. System option

  B. Strategic option

  C. Call option

  D. Put option

  Correct Answer: D

• Question 838:

  Individuals can invest in REITs:

  A. By purchasing their shares directly on an open exchange

  B. By investing in a mutual fund that specializes in public real estate

  C. Both AandB

  D. Either A or B; it depends

  Correct Answer: D

• Question 839:

  Which of the following is NOT an example of derivative security?

  A. Futures

  B. Options

  C. Swaps

  D. Bonds

  Correct Answer: D

• Question 840:

  Which of the following bonds are high yield bonds issued by companies that are considered highly speculative because of risk of default?

  A. Junk bonds

  B. Municipal bonds

  C. Callable bonds

  D. Convertible bonds

  Correct Answer: A