Practice CTFA Exam Online

Question 1

Which of the following is Correct?

A :

the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

B :

the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.

C :

the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

D :

the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

Answer: A

Question 2

Which of the following is the right to sell?

A : System option

B : Strategic option

C : Call option

D : Put option

Answer: D

Question 3

An investor wants to buy 100 shares of a company but due to shortage of funds investor can only 30% of the total share price and will borrow rest of 70% from brokerage firm. Which of the following type of account will be suitable for investor in this situation?

A : Cash account

B : Margin account

C : Real account

D : CFA account

Answer: B

Question 4

The accumulation phase in annuities can last from as long as:

A : One day to five years

B : One day to decades

C : Ten days to ten years

D : All of these

Answer: B

Question 5

Which one of the following is correct formula for calculating operating margin?

A : Net Profit/Net Sales

B : Net income/Net Sales

C : Operating income/Net Sales

D : Operating income/credit sales

Answer: C

Name:	Certified Trust and Fiduciary Advisor (CTFA)
Exam Code:	CTFA
Certification:	Certified Trust and Financial Advisor
Vendor:	American Bankers Association
Total Questions:	900
Last Updated:	Nov 04, 2025

American Bankers Association CTFA Answers