CANNON CTFA CORE EXAM 2026 TEST QUESTIONS AND
SOLUTIONS GRADED A+
✔✔A fidelity bond covers which of the following types of losses?
A. fraud
B. market fluctuation
C. poor judgment - ✔✔A. fraud
✔✔The alpha coefficient can best be described as the:
A. relative sensitivity of a stock's return to the market's return.
B. measure of issue-specific risk related to number of dissimilar issues held.
C. estimate of range (plus or minus) around the expected rate of return in which the
actual rate of return will tend to fall.
D. unexpected portion of the actual return. - ✔✔D. unexpected portion of the actual
return.
✔✔Which of the following clauses would MOST LIKELY be considered a general power
of appointment?
A. Pay for support, education and medical expenses in whatever amounts needed at
the trustee's discretion.
B. Pay my children for their support in their accustomed manner of living.
C. Pay my children for their comfort, welfare and happiness.
D. Pay my children for health, education, support or maintenance. - ✔✔C. Pay my
children for their comfort, welfare and happiness.
✔✔Corporate bonds are securities representing corporate:
A. stock.
B. guarantees.
C. ownership.
D. debt.
E. trusteeship. - ✔✔D. debt.
✔✔The price-earnings ratio of a stock selling for $20 with earnings of $2 is:
A. 2.
B. 5.
C. 10.
D. 20. - ✔✔C. 10.
✔✔Preferred stock which permits the owner to exchange it for common stock under set
terms and conditions is:
, A. convertible preferred stock.
B. callable preferred stock.
C. cumulative preferred stock.
D. participating preferred stock.
E. protected preferred stock. - ✔✔A. convertible preferred stock.
✔✔In the early stages of a business recession (decline in GNP), investment managers
usually buy:
A. growth stocks.
B. treasury bonds.
C. limited partnerships.
D. low-grade corporate bonds. - ✔✔B. treasury bonds.
✔✔A municipal bond issue secured by the income from a bridge or toll road is called a:
A. mortgage bond issue.
B. debenture issue.
C. general obligation issue.
D. revenue bond issue. - ✔✔D. revenue bond issue.
✔✔Which of the following is taxable, federally?
I. AAA corporate bond
II. US government bond
III. Cumulative preferred stock
IV. Out of state municipal bond
V. In state municipal bond
VI. Treasury bill
VII. Treasury note.
A. I, III, IV, and VI
B. I, II, III, and IV
C. I, II, III, VI, and VII
D. All of the above - ✔✔C. I, II, III, VI, and VII
✔✔Which of the following is taxable, at the state level?
I. AAA corporate bond
II. US government bond
III. Cumulative preferred stock
IV. Out of state municipal bond
V. In state municipal bond
VI. Treasury bill
VII. Treasury note.
SOLUTIONS GRADED A+
✔✔A fidelity bond covers which of the following types of losses?
A. fraud
B. market fluctuation
C. poor judgment - ✔✔A. fraud
✔✔The alpha coefficient can best be described as the:
A. relative sensitivity of a stock's return to the market's return.
B. measure of issue-specific risk related to number of dissimilar issues held.
C. estimate of range (plus or minus) around the expected rate of return in which the
actual rate of return will tend to fall.
D. unexpected portion of the actual return. - ✔✔D. unexpected portion of the actual
return.
✔✔Which of the following clauses would MOST LIKELY be considered a general power
of appointment?
A. Pay for support, education and medical expenses in whatever amounts needed at
the trustee's discretion.
B. Pay my children for their support in their accustomed manner of living.
C. Pay my children for their comfort, welfare and happiness.
D. Pay my children for health, education, support or maintenance. - ✔✔C. Pay my
children for their comfort, welfare and happiness.
✔✔Corporate bonds are securities representing corporate:
A. stock.
B. guarantees.
C. ownership.
D. debt.
E. trusteeship. - ✔✔D. debt.
✔✔The price-earnings ratio of a stock selling for $20 with earnings of $2 is:
A. 2.
B. 5.
C. 10.
D. 20. - ✔✔C. 10.
✔✔Preferred stock which permits the owner to exchange it for common stock under set
terms and conditions is:
, A. convertible preferred stock.
B. callable preferred stock.
C. cumulative preferred stock.
D. participating preferred stock.
E. protected preferred stock. - ✔✔A. convertible preferred stock.
✔✔In the early stages of a business recession (decline in GNP), investment managers
usually buy:
A. growth stocks.
B. treasury bonds.
C. limited partnerships.
D. low-grade corporate bonds. - ✔✔B. treasury bonds.
✔✔A municipal bond issue secured by the income from a bridge or toll road is called a:
A. mortgage bond issue.
B. debenture issue.
C. general obligation issue.
D. revenue bond issue. - ✔✔D. revenue bond issue.
✔✔Which of the following is taxable, federally?
I. AAA corporate bond
II. US government bond
III. Cumulative preferred stock
IV. Out of state municipal bond
V. In state municipal bond
VI. Treasury bill
VII. Treasury note.
A. I, III, IV, and VI
B. I, II, III, and IV
C. I, II, III, VI, and VII
D. All of the above - ✔✔C. I, II, III, VI, and VII
✔✔Which of the following is taxable, at the state level?
I. AAA corporate bond
II. US government bond
III. Cumulative preferred stock
IV. Out of state municipal bond
V. In state municipal bond
VI. Treasury bill
VII. Treasury note.
