CANNON CTFA COMPREHENSIVE SCRIPT
2026 QUESTIONS AND SOLUTIONS
◉ Foreign Securities Answer: What presents HIGH liquidity risk,
HIGH sovereign risk, and HIGH diversification
◉ Bid Price Answer: The lowest price on a stock acceptable to a
prospective seller.
◉ The income tax brackets of the remainderman Answer: When
choosing FIXED INCOME investments for a portfolio what is the least
important factor?
◉ Increase your holdings in municipal bonds Answer: What is the
best way to plan for an increase in tax rates?
◉ Earnings Answer: What are stock prices most impacted by?
◉ 11% Answer: What have stocks averaged since 1926?
◉ State Taxes Answer: Bonds issued by most government agencies
are exempt from what kind of taxes?
, ◉ The Issuer Answer: Call provisions benefit who?
◉ Modern Portfolio Theory Answer: a method that can be used by
risk-averse investors to construct diversified portfolios that
maximize their returns without unacceptable levels of risk. Investors
will only take on high-risk investments if they can expect a larger
reward. The portfolio itself is balanced in a way that its overall risk
is lower than some of its underlying investments.
◉ Systematic Risk Answer: refers to market risks that cannot be
reduced through diversification, or the possibility that the entire
market and economy will show losses that negatively affect
investments such as interest rates, wars, and recessions.
◉ Unsystematic Risk or Specific Risk Answer: Specific to individual
stocks, meaning it can be diversified as you increase the number of
stocks or other asset classes into a portfolio
◉ Joint Tenancy (WROS) Answer: Ownership by multiple individuals
who have an undivided interest. Everyone has equal interest,
multiple owners. Avoids Probate
◉ Sole Ownership Answer: Titled in the name of one person. Full
rights of property in life and death. Transfers under decedent's will
or intestate estate. Subject to Probate.
2026 QUESTIONS AND SOLUTIONS
◉ Foreign Securities Answer: What presents HIGH liquidity risk,
HIGH sovereign risk, and HIGH diversification
◉ Bid Price Answer: The lowest price on a stock acceptable to a
prospective seller.
◉ The income tax brackets of the remainderman Answer: When
choosing FIXED INCOME investments for a portfolio what is the least
important factor?
◉ Increase your holdings in municipal bonds Answer: What is the
best way to plan for an increase in tax rates?
◉ Earnings Answer: What are stock prices most impacted by?
◉ 11% Answer: What have stocks averaged since 1926?
◉ State Taxes Answer: Bonds issued by most government agencies
are exempt from what kind of taxes?
, ◉ The Issuer Answer: Call provisions benefit who?
◉ Modern Portfolio Theory Answer: a method that can be used by
risk-averse investors to construct diversified portfolios that
maximize their returns without unacceptable levels of risk. Investors
will only take on high-risk investments if they can expect a larger
reward. The portfolio itself is balanced in a way that its overall risk
is lower than some of its underlying investments.
◉ Systematic Risk Answer: refers to market risks that cannot be
reduced through diversification, or the possibility that the entire
market and economy will show losses that negatively affect
investments such as interest rates, wars, and recessions.
◉ Unsystematic Risk or Specific Risk Answer: Specific to individual
stocks, meaning it can be diversified as you increase the number of
stocks or other asset classes into a portfolio
◉ Joint Tenancy (WROS) Answer: Ownership by multiple individuals
who have an undivided interest. Everyone has equal interest,
multiple owners. Avoids Probate
◉ Sole Ownership Answer: Titled in the name of one person. Full
rights of property in life and death. Transfers under decedent's will
or intestate estate. Subject to Probate.
