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ABA CTFA Exam
Certified Trust and Financial Advisor (CTFA) (Page 10 )

Updated On: 26-Jan-2026
Page 10 of 91
PDF with 895 Questions

In the use of single-payment loan to finance a purchase or pay bills in situations where the funds to be used for repayment are known to be forthcoming in the near future.

  1. Interim financing
  2. Installment loans
  3. College savings plan
  4. Commercial loans

Answer(s): A



One potential problem with sensitivity analysis is that it generally looks at sensitivity "one variable at a time." However, one way to judge the sensitivity of results to simultaneous changes in two variables, at least, is to construct an.

  1. NPV profile
  2. NPV sensitivity matrix
  3. NPV sensitivity graph
  4. None of these

Answer(s): B



The method provides correct rankings of mutually exclusive projects, when one is Not subject to capital rationing.

  1. Net present value
  2. Internal rate of return
  3. Payback period
  4. Profitability index

Answer(s): A



If capital is to be rationed for only the current period, a firm should probably first consider selecting projects by descending order of.

  1. Net present value
  2. Payback period
  3. Internal rate of return
  4. Profitability index

Answer(s): D



Two mutually exclusive investment proposals have "scale differences" (i.e., the cost of the projects differ). Ranking these projects on the basis of IRR, NPV, and PI methods give contradictory results.

  1. Will never
  2. Will always
  3. May
  4. Will generally

Answer(s): C



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