Cannon TrusT sChool II EXaM WITh CorrECT aCTual
QuEsTIons anD CorrECTlY WEll DEFInED ansWErs laTEsT
alrEaDY GraDED a+ (2026/2027)
Bonds that can be traded for stock are known as - ANSWER-Convertible Bonds
A company most likely will call bonds (assuming bonds are callable) it had previously
issued if what occurs? - ANSWER-Interest Rates Fall
The LOWESTS&P's rating that would qualify as investment grade is what? - ANSWER-
BBB-
A treasury bill is taxable by which of the following entities? - ANSWER-Higher liquidity
and higher marketability
You manage a trust that holds zero-coupon bonds. To determine the tax liability, you
should do what? - ANSWER-Report the annual accrual each year.
If investors expect interest rates to increase they will do what? - ANSWER-Decrease
Duration
A municipal bond issue secured by the income from a bridge or toll road is called a: -
ANSWER-Revenue Bond Issue
Dividend distributions from mutual funds are: - ANSWER-taxable as ordinary income or
qualified dividends depending on status
Open-end and closed-end investment companies differ in their - ANSWER-capitalization.
Investment companies must issue financial statements to their shareholders: - ANSWER-
semiannually.
QuEsTIons anD CorrECTlY WEll DEFInED ansWErs laTEsT
alrEaDY GraDED a+ (2026/2027)
Bonds that can be traded for stock are known as - ANSWER-Convertible Bonds
A company most likely will call bonds (assuming bonds are callable) it had previously
issued if what occurs? - ANSWER-Interest Rates Fall
The LOWESTS&P's rating that would qualify as investment grade is what? - ANSWER-
BBB-
A treasury bill is taxable by which of the following entities? - ANSWER-Higher liquidity
and higher marketability
You manage a trust that holds zero-coupon bonds. To determine the tax liability, you
should do what? - ANSWER-Report the annual accrual each year.
If investors expect interest rates to increase they will do what? - ANSWER-Decrease
Duration
A municipal bond issue secured by the income from a bridge or toll road is called a: -
ANSWER-Revenue Bond Issue
Dividend distributions from mutual funds are: - ANSWER-taxable as ordinary income or
qualified dividends depending on status
Open-end and closed-end investment companies differ in their - ANSWER-capitalization.
Investment companies must issue financial statements to their shareholders: - ANSWER-
semiannually.
