Cannon Trust School II - Sample Exam |\ |\ |\ |\ |\ |\ |\
Questions with answers |\ |\
Bonds that can be traded for stock are known as - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Convertible Bonds |\ |\
A company most likely will call bonds (assuming bonds are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
callable) it had previously issued if what occurs? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Interest Rates Fall |\ |\ |\
The LOWESTS&P's rating that would qualify as investment grade
|\ |\ |\ |\ |\ |\ |\ |\ |\
is what? - CORRECT ANSWERS ✔✔BBB-
|\ |\ |\ |\ |\
A treasury bill is taxable by which of the following entities? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Higher liquidity and higher marketability
|\ |\ |\ |\ |\ |\
You manage a trust that holds zero-coupon bonds. To determine
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the tax liability, you should do what? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔Report the annual accrual each year.
|\ |\ |\ |\ |\
If investors expect interest rates to increase they will do what? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Decrease Duration
|\ |\ |\
A municipal bond issue secured by the income from a bridge or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
toll road is called a: - CORRECT ANSWERS ✔✔Revenue Bond
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Issue
, Dividend distributions from mutual funds are: - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔taxable as ordinary income or qualified dividends
|\ |\ |\ |\ |\ |\ |\ |\
depending on status |\ |\
Open-end and closed-end investment companies differ in their -
|\ |\ |\ |\ |\ |\ |\ |\ |\
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-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
end investment company is determined from - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔today's closing price. |\ |\ |\
Under the "conduit" theory, taxes payable on dividends and
|\ |\ |\ |\ |\ |\ |\ |\ |\
interest distributed by a regulated investment company are paid:
|\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔only by the shareholder.
|\ |\ |\ |\ |\ |\ |\
The market price of shares of a closed-end investment company
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is - CORRECT ANSWERS ✔✔determined by the supply and
|\ |\ |\ |\ |\ |\ |\ |\ |\
demand for the shares of the closed-end investment company.
|\ |\ |\ |\ |\ |\ |\ |\
Money market funds invest primarily in: - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔short term fixed income securities |\ |\ |\ |\
Questions with answers |\ |\
Bonds that can be traded for stock are known as - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Convertible Bonds |\ |\
A company most likely will call bonds (assuming bonds are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
callable) it had previously issued if what occurs? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Interest Rates Fall |\ |\ |\
The LOWESTS&P's rating that would qualify as investment grade
|\ |\ |\ |\ |\ |\ |\ |\ |\
is what? - CORRECT ANSWERS ✔✔BBB-
|\ |\ |\ |\ |\
A treasury bill is taxable by which of the following entities? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Higher liquidity and higher marketability
|\ |\ |\ |\ |\ |\
You manage a trust that holds zero-coupon bonds. To determine
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the tax liability, you should do what? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔Report the annual accrual each year.
|\ |\ |\ |\ |\
If investors expect interest rates to increase they will do what? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Decrease Duration
|\ |\ |\
A municipal bond issue secured by the income from a bridge or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
toll road is called a: - CORRECT ANSWERS ✔✔Revenue Bond
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Issue
, Dividend distributions from mutual funds are: - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔taxable as ordinary income or qualified dividends
|\ |\ |\ |\ |\ |\ |\ |\
depending on status |\ |\
Open-end and closed-end investment companies differ in their -
|\ |\ |\ |\ |\ |\ |\ |\ |\
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-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
end investment company is determined from - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔today's closing price. |\ |\ |\
Under the "conduit" theory, taxes payable on dividends and
|\ |\ |\ |\ |\ |\ |\ |\ |\
interest distributed by a regulated investment company are paid:
|\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔only by the shareholder.
|\ |\ |\ |\ |\ |\ |\
The market price of shares of a closed-end investment company
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is - CORRECT ANSWERS ✔✔determined by the supply and
|\ |\ |\ |\ |\ |\ |\ |\ |\
demand for the shares of the closed-end investment company.
|\ |\ |\ |\ |\ |\ |\ |\
Money market funds invest primarily in: - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔short term fixed income securities |\ |\ |\ |\
