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Certified Trust and Financial Advisor (CTFA) Questions 136–140 (page: 29)

Updated On: 9-Feb-2026

Which would be an appropriate investment for temporarily idle cash that will be used to pay quarterly dividends three months from now?

  1. A long-term Aaa-rated corporate bond with a current annual yield of 9.4 percent
  2. A 30-year Treasury bond with a current annual yield of 8.7 percent
  3. Ninety-day commercial paper with a current annual yield of 6.2 percent
  4. Common stock that has been appreciating in price 8 percent annually, on average, and paying a quarterly dividend that is the equivalent of a 5 percent annual yield

Answer(s): C



According to the Bond Equivalent Yield (BEY) method, the yield on a $1, 000, 13-week US Treasury bill purchased for $960 would be closest to .

  1. 16 Percent
  2. 16.7 Percent
  3. 17 Percent
  4. 17.8 Percent

Answer(s): B



Accounts receivable conversion (a.k.a., check conversion) is the conversion of a paper check to

  1. An electronic check image
  2. A "substitute check"
  3. An ACH debit transaction
  4. A foreign currency

Answer(s): C



It is a type of flexible mortgage where the payments increase for a specified period of time and then level off. What is it?

  1. Flexible payment mortgage
  2. Graduated payment mortgage
  3. Constant payment mortgage
  4. Variable payment mortgage

Answer(s): B



________ is a claim upon a piece of property for the payment or satisfaction of a debt or obligation.

  1. Escrow
  2. Lien
  3. Callable debt
  4. Balloon payment mortgage

Answer(s): B



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