CANNON CTFA COMPREHENSIVE EXAMS 2025/2026
QUESTIONS WITH ANSWERS RATED A+
✔✔For the following condition indicate the Equity Management Style that the following
characteristic would tend to represent on a relative basis.
Dividend Yield lower than the market averages
A. Growth
B. Value
C. Both - ✔✔A. Growth
✔✔Which of the following occurs when a surviving spouse purchases the remainder
interest in a QTIP marital trust from the remaindermen?
A. The remaindermen made a gift to the surviving spouse.
B. The spouse made a gift to the remaindermen
C. No gift is made because the spouse paid adequate consideration to the
remaindermen.
D. The trust no longer qualifies as a QTIP, triggering estate tax in the decedent
spouse's estate. - ✔✔C. No gift is made because the spouse paid adequate
consideration to the remaindermen.
✔✔Distributions from a charitable remainder trust to the non-charitable beneficiaries
are:
A. tax-exempt.
B. income to the recipient.
C. not permitted.
D. taxable to the recipient to the extent of the trust's income and capital gains that year
and undistributed from prior years. - ✔✔D. taxable to the recipient to the extent of the
trust's income and capital gains that year and undistributed from prior years.
✔✔A decedent owns a $1,400,000 in her own name, a $150,000 vacation home jointly
with her spouse and a $100,000 life insurance policy with the children as beneficiaries.
Which of the following is the value of her gross estate?
A. $1,250,000
B. $1,400,000
C. $1,475,000
D. $1,575,000 - ✔✔D. $1,575,000
✔✔Which of the following is true concerning alternate valuation of a decedent's estate?
,A. When elected, alternate valuation applies to all assets in the gross estate, the
personal representative may not value some assets at date of death and others at
alternate valuation date.
B. Alternate valuation may be elected only if it results in a higher value for the gross
estate and results in higher estate taxes.
C. When elected, alternate valuation does not apply to any assets sold within six
months following date of death, they are valued at date of death value.
D. When elected, the alternate value is used for estate tax purposes but the cost basis
of the asses is sitll the date of death value for capital gain tax purposes. - ✔✔A. When
elected, alternate valuation applies to all assets in the gross estate, the personal
representative may not value some assets at date of death and others at alternate
valuation date.
✔✔A decedent passed away on September 18. Her income for the full year of her death
was $85,000, of which $60,000 had been earned and received as of September 18.
How much income should be reported on the decedent's estate's initial income tax
return?
A. $25,000
B. $60,000
C. $85,000
D. It depends on the fiscal year chosen for her estate - ✔✔D. It depends on the fiscal
year chosen for her estate
✔✔You find this tax apportionment clause in the document: "No taxes or expenses of
administration shall be borne by any specific distribution made in this Article, but any
taxes allocable to such gift of cash or tangible personal property shall be borne by the
residuary trust estate." The 75-year-old decedent has used his/her entire GSTT
exemption during life. A specific bequest of $10,000 is made to a family friend, age 35.
Approximately how much will she receive?
A. $0
B. $6,000
C. $7,143
D. $10,000 - ✔✔C. $7,143
✔✔Last year, you bought a building for $800,000. The current FMV is $1,000,000. The
building is covered for fire-related perils for $700,000 with an 80% coinsurance
provision and a $2,000 straight deductible. Last week, a fire broke out causing $700,000
in damage. What would the insurance company pay?
A. $612,000
B. $507,000
C. $612,500
D. $698,000 - ✔✔C. $612,500
, ✔✔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.
QUESTIONS WITH ANSWERS RATED A+
✔✔For the following condition indicate the Equity Management Style that the following
characteristic would tend to represent on a relative basis.
Dividend Yield lower than the market averages
A. Growth
B. Value
C. Both - ✔✔A. Growth
✔✔Which of the following occurs when a surviving spouse purchases the remainder
interest in a QTIP marital trust from the remaindermen?
A. The remaindermen made a gift to the surviving spouse.
B. The spouse made a gift to the remaindermen
C. No gift is made because the spouse paid adequate consideration to the
remaindermen.
D. The trust no longer qualifies as a QTIP, triggering estate tax in the decedent
spouse's estate. - ✔✔C. No gift is made because the spouse paid adequate
consideration to the remaindermen.
✔✔Distributions from a charitable remainder trust to the non-charitable beneficiaries
are:
A. tax-exempt.
B. income to the recipient.
C. not permitted.
D. taxable to the recipient to the extent of the trust's income and capital gains that year
and undistributed from prior years. - ✔✔D. taxable to the recipient to the extent of the
trust's income and capital gains that year and undistributed from prior years.
✔✔A decedent owns a $1,400,000 in her own name, a $150,000 vacation home jointly
with her spouse and a $100,000 life insurance policy with the children as beneficiaries.
Which of the following is the value of her gross estate?
A. $1,250,000
B. $1,400,000
C. $1,475,000
D. $1,575,000 - ✔✔D. $1,575,000
✔✔Which of the following is true concerning alternate valuation of a decedent's estate?
,A. When elected, alternate valuation applies to all assets in the gross estate, the
personal representative may not value some assets at date of death and others at
alternate valuation date.
B. Alternate valuation may be elected only if it results in a higher value for the gross
estate and results in higher estate taxes.
C. When elected, alternate valuation does not apply to any assets sold within six
months following date of death, they are valued at date of death value.
D. When elected, the alternate value is used for estate tax purposes but the cost basis
of the asses is sitll the date of death value for capital gain tax purposes. - ✔✔A. When
elected, alternate valuation applies to all assets in the gross estate, the personal
representative may not value some assets at date of death and others at alternate
valuation date.
✔✔A decedent passed away on September 18. Her income for the full year of her death
was $85,000, of which $60,000 had been earned and received as of September 18.
How much income should be reported on the decedent's estate's initial income tax
return?
A. $25,000
B. $60,000
C. $85,000
D. It depends on the fiscal year chosen for her estate - ✔✔D. It depends on the fiscal
year chosen for her estate
✔✔You find this tax apportionment clause in the document: "No taxes or expenses of
administration shall be borne by any specific distribution made in this Article, but any
taxes allocable to such gift of cash or tangible personal property shall be borne by the
residuary trust estate." The 75-year-old decedent has used his/her entire GSTT
exemption during life. A specific bequest of $10,000 is made to a family friend, age 35.
Approximately how much will she receive?
A. $0
B. $6,000
C. $7,143
D. $10,000 - ✔✔C. $7,143
✔✔Last year, you bought a building for $800,000. The current FMV is $1,000,000. The
building is covered for fire-related perils for $700,000 with an 80% coinsurance
provision and a $2,000 straight deductible. Last week, a fire broke out causing $700,000
in damage. What would the insurance company pay?
A. $612,000
B. $507,000
C. $612,500
D. $698,000 - ✔✔C. $612,500
, ✔✔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.
