CANNON CTFA FINAL PAPER 2026 COMPLETE
QUESTIONS AND ANSWERS
◉ What type of property is subject to contractual beneficiary
designation and (usually) avoids probate. Examples like life
insurance, annuities, IRAs, Qualified Retirement Plans, and/or Pay
on death/transfer on death arrangements? Answer: Contract
Property
◉ A decrease in the money supply will:
A. Increase inflation
B. Increase GNP
C. Slow the economy, or
D. Help the housing industry Answer: C. slow the economy
◉ The most important factor in the long-term performance of equity
(Stock) investments is
A. The economy
B. Interest rates
C. The industry of the corporation
D. The management of the corporation Answer: D. The management
of the corporation
,◉ The most important factor in short-term performance of equity
(stock) investments is
A. The economy
B. Interest rates
C. The industry of the corporation
D. The management of the corporation Answer: A. The Economy
◉ Cycical changes in the business cycle would most likely have the
greatest effect on a:
A. Utility company
B. Food retailer
C. Brewery
D. Machine tool company Answer: D. Machine tool company
◉ Which of the following would be an example of the use of fiscal
policy to stimulate the economy?
A. An increase in spending by the federal government on new
highway construction
B. A decrease int he reserve requirement for banks
C. Action by the federal reserve board to increase the money supply
D. Intervention int he currency markets by the government to
strengthen the US dollar Answer: A. an Increase in spending by the
federal government on new highway construction
,◉ The strengthening in the US Dollar in comparison to other
currencies would have the effect of making which o f the following
true?
A. US exports less competitive than domestic goods only, no effect on
foreign imports
B. US exports more competitive than domestic goods only, no effect
on foreign imports
C. Foreign exports less competitive than US goods, and US exports
more competitive than domestic goods.
D. Foreign exports more competitive than US goods, and US exports
less competitive than domestic goods. Answer: D. Foreign imports
MORE competitive than US Goods and US exports LESS competitive
than domestic goods
◉ Interest rates rise and yields on money market instruments
increase well above interest rates offered by banks. Investors,
therefore, invest directly in the higher yielding instruments with
funds they have withdrawn from banks. This is known as which of
the following?
A. Intermediation
B. Disintermediation
C. Crowding out
D. The multiplier effect Answer: B. Disintermediation
, ◉ The Federal Reserve Board has three tools to regulate the
economy: Open market operations, reserve requirements, and
margin requirements. If the Federal Reserve Board wishes to
stimulate a sluggish economy, it would do so by doing which of the
following?
A. Selling US Government securities in the open market and raising
reserve requirements and reducing margin requirements
B. BUYING US Government securities in the open market and raising
reserve requirements and INCREASING margin requirements
C. Selling US Government securities in the open market and
LOWERING reserve requirements and INCREASING margin
requirements
D. Buying US Government securities in the open market and
lowering reserve requirements and REDUCING margin requirements
Answer: D. BUYING US Government securities in the open market
and LOWERING reserve requirements and REDUCING margin
requirements
◉ When a member bank of the Federal Reserve System borrows
from the Federal Reserve Bank in its district, it will pay the:
QUESTIONS AND ANSWERS
◉ What type of property is subject to contractual beneficiary
designation and (usually) avoids probate. Examples like life
insurance, annuities, IRAs, Qualified Retirement Plans, and/or Pay
on death/transfer on death arrangements? Answer: Contract
Property
◉ A decrease in the money supply will:
A. Increase inflation
B. Increase GNP
C. Slow the economy, or
D. Help the housing industry Answer: C. slow the economy
◉ The most important factor in the long-term performance of equity
(Stock) investments is
A. The economy
B. Interest rates
C. The industry of the corporation
D. The management of the corporation Answer: D. The management
of the corporation
,◉ The most important factor in short-term performance of equity
(stock) investments is
A. The economy
B. Interest rates
C. The industry of the corporation
D. The management of the corporation Answer: A. The Economy
◉ Cycical changes in the business cycle would most likely have the
greatest effect on a:
A. Utility company
B. Food retailer
C. Brewery
D. Machine tool company Answer: D. Machine tool company
◉ Which of the following would be an example of the use of fiscal
policy to stimulate the economy?
A. An increase in spending by the federal government on new
highway construction
B. A decrease int he reserve requirement for banks
C. Action by the federal reserve board to increase the money supply
D. Intervention int he currency markets by the government to
strengthen the US dollar Answer: A. an Increase in spending by the
federal government on new highway construction
,◉ The strengthening in the US Dollar in comparison to other
currencies would have the effect of making which o f the following
true?
A. US exports less competitive than domestic goods only, no effect on
foreign imports
B. US exports more competitive than domestic goods only, no effect
on foreign imports
C. Foreign exports less competitive than US goods, and US exports
more competitive than domestic goods.
D. Foreign exports more competitive than US goods, and US exports
less competitive than domestic goods. Answer: D. Foreign imports
MORE competitive than US Goods and US exports LESS competitive
than domestic goods
◉ Interest rates rise and yields on money market instruments
increase well above interest rates offered by banks. Investors,
therefore, invest directly in the higher yielding instruments with
funds they have withdrawn from banks. This is known as which of
the following?
A. Intermediation
B. Disintermediation
C. Crowding out
D. The multiplier effect Answer: B. Disintermediation
, ◉ The Federal Reserve Board has three tools to regulate the
economy: Open market operations, reserve requirements, and
margin requirements. If the Federal Reserve Board wishes to
stimulate a sluggish economy, it would do so by doing which of the
following?
A. Selling US Government securities in the open market and raising
reserve requirements and reducing margin requirements
B. BUYING US Government securities in the open market and raising
reserve requirements and INCREASING margin requirements
C. Selling US Government securities in the open market and
LOWERING reserve requirements and INCREASING margin
requirements
D. Buying US Government securities in the open market and
lowering reserve requirements and REDUCING margin requirements
Answer: D. BUYING US Government securities in the open market
and LOWERING reserve requirements and REDUCING margin
requirements
◉ When a member bank of the Federal Reserve System borrows
from the Federal Reserve Bank in its district, it will pay the:
