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Q136. (Topic 1)
Bank may serve as trustee or custodian for pension and profit sharing plans that self-employed individuals establish for them selves and their employees. These types of trust are referred to as:
A. Defined benefit plans
B. Keogh plans
C. Individual retirement account
D. None of these
Answer: B
Q137. (Topic 2)
This agreement occurs when a security is sold with an agreement to buy it back. The repurchase date is usually very short term, often one day. Dealers sell a portion of their securities to entities with cash reserves and agree to buy them back for the principal plus interest. What is this?
A. Certificate of deposit
B. Commercial Paper
C. Money market fund
D. Repurchase agreement
Answer: D
Q138. (Topic 3)
Whole life policies accrue a cash value that the insurer must surrender to the policyholder if the policy does not remain in force until the policyholder’s death. The actual cash value payable to the policyholder in this circumstance would be:
A. Plus any surrender charges
B. Less any surrender charges
C. Plus policy repayments outstanding
D. Less any surrender charges and policy repayments outstanding
Answer: D
Q139. (Topic 3)
Following are the EU Saving Directives paying agents EXCEPT: A. Banks and deposit takers
B. Brokers, Registrars and investment funds
C. Castilians and transfer agent
D. All of these
Answer: D
Q140. (Topic 2)
“A special type of annuity that involves a contract between the annuitant and insurer in whichinsurer credits the annuity account with return amounts based on changes in an equity indexsuch as the S&P500 (composite price index),” is:
A. Price indexed annuity
B. Variable index annuity
C. Stock indexed annuity
D. Equity indexed annuity
Answer: D
Q141. (Topic 4)
A sound Asset/Liability management policy must manage following risk EXCEPT:
A. Credit Risk
B. Capital Risk
C. Interest-Rate risk
D. None of these
Answer: D
Q142. (Topic 3)
To the extent that the hedged relationship ceases to be effective, the hedging instrument’s gains/losses should be transferred from the reserve and recognized in:
A. Assets
B. Receivables
C. Income
D. Expense
Answer: A
Q143. (Topic 1)
Types of commercial loans are /are:
A. Installment loans
B. Floor plan financing
C. Asset-based financing
D. Both B and C
Answer: D
Q144. (Topic 5)
___________ have relatively low risks, compared to other mutual funds.
A. Stock funds
B. Hedge funds
C. Money funds
D. Both B and C
Answer: C
Q145. (Topic 5)
Charitable trust that is an irrevocable trust and that may be testamentary or inter-vivos (Between living persons) is called:
A. Foundations
B. Charitable Remainder Unitrust
C. Charitable Remainder Annuity Trust
D. None of these
Answer: D
Q146. (Topic 5)
A manufacturer wants to protect the company from financial loss resulting from third-party lawsuits. The manufacturer has learned of several recent jury awards over $7 million for product defects. The manufacturer currently has only $5 million in this type of coverage. The manufacturer has also learned that several automobile claims have been recently awarded against other company’s cars in accidents over $1 million. The manufacturer has damaged his competition and the manufacturer wants to protect his company further than the current policy allows. What insurance coverage product will the manufacturer likely buy?
A. A personal injury protection (PIP) policy to protect others from personal injury
B. An umbrella policy to place a protective umbrella over existing coverage.
C. A surplus lines policy to protect against claims in surplus of the policy limits.
D. A floater policy to float coverage where needed.
Answer: B
Q147. (Topic 1)
An example of an invalid deductive argument is as follows: Major premises: All employees who are committing fraud drive luxury cars. Minor premises: __________ Conclusion: Therefore, John Doe is committing fraud. What will be the minor premise in this example?
A. John Doe is an employee
B. John Doe drives a luxury car
C. John Doe is a senior management level employee
D. John Doe drives an ordinary car
Answer: B
Q148. (Topic 4)
Insider rule/s:
A. They are not allowed to profit from their information by trading a stock before that information is public.
B. They are generally barred from short selling.
C. Must file a personnel statement with SEC and report all personal security transactions in their corporation no later than 10 days after the end of the calendar month in which they occur.
D. Both A & C
Answer: D
Q149. (Topic 2)
The balance sheet is the fundamental report of a company’s financial position. An examination of a balance sheet will assist in determining:
A. If the company meets its financial obligations
B. The amount of money invested in outside the company
C. The company’s debt ratio
D. The type of assets that company has purchased with its debt financing
Answer: A,C
Q150. (Topic 1)
Reasonable assurance relates to the:
A. Audit planning process
B. Scope of the internal audit
C. End of the audit process
D. Whole audit process
Answer: D