Cannon Trust School II - Sample Exam Questions with answers

Cannon Trust School II - Sample Exam |\ |\ |\ |\ |\ |\ |\




Questions with answers |\ |\




Bonds that can be traded for stock are known as - CORRECT
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ANSWERS ✔✔Convertible Bonds |\ |\




A company most likely will call bonds (assuming bonds are
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callable) it had previously issued if what occurs? - CORRECT
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ANSWERS ✔✔Interest Rates Fall |\ |\ |\




The LOWESTS&P's rating that would qualify as investment grade
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is what? - CORRECT ANSWERS ✔✔BBB-
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A treasury bill is taxable by which of the following entities? -
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CORRECT ANSWERS ✔✔Higher liquidity and higher marketability
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You manage a trust that holds zero-coupon bonds. To determine
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the tax liability, you should do what? - CORRECT ANSWERS
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✔✔Report the annual accrual each year.
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If investors expect interest rates to increase they will do what? -
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CORRECT ANSWERS ✔✔Decrease Duration
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A municipal bond issue secured by the income from a bridge or
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toll road is called a: - CORRECT ANSWERS ✔✔Revenue Bond
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Issue

, Dividend distributions from mutual funds are: - CORRECT
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ANSWERS ✔✔taxable as ordinary income or qualified dividends
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depending on status |\ |\




Open-end and closed-end investment companies differ in their -
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CORRECT ANSWERS ✔✔capitalization. |\ |\




Investment companies must issue financial statements to their|\ |\ |\ |\ |\ |\ |\ |\


shareholders: - CORRECT ANSWERS ✔✔semiannually. |\ |\ |\ |\




The price an investor will pay today when purchasing an open-
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end investment company is determined from - CORRECT
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ANSWERS ✔✔today's closing price. |\ |\ |\




Under the "conduit" theory, taxes payable on dividends and
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interest distributed by a regulated investment company are paid:
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- CORRECT ANSWERS ✔✔only by the shareholder.
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The market price of shares of a closed-end investment company
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is - CORRECT ANSWERS ✔✔determined by the supply and
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demand for the shares of the closed-end investment company.
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Money market funds invest primarily in: - CORRECT ANSWERS
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✔✔short term fixed income securities |\ |\ |\ |\