CFP Mock Exam questions with correct answers

Which of the following is correct regarding certificates of deposit (CDs)? A. CD's are short-term securities that may be bought or sold in the open market at a market-determined price. B. CD's typically invest in high-quality, short-term investments, such as commercial paper, T-Bills, and money market funds. C. CDs are known as "time deposits" D. The financial institution pays a variable rate of interest for the term of the CD. CORRECT ANSWER C. CDs are known as "time deposits" [Certificates of deposit (CDs) are known as "time deposits". They are deposits made with a bank for a specified period of time.] All but which of the following are correct regarding Treasury bills? A. Have maturities of one year or less B. Sold in minimum denominations of $500 C. Considered to be default risk free D. Sold at a discount to par CORRECT ANSWER B. Sold in minimum denominations of $500 [Treasury bills are sold in minimum denominations of $1,000.] Which of the following describes the relationship between total risk, systematic risk, and unsystematic risk?