IIA IIA Certifications IIA-CFSA Questions & Answers

• Question 331:

  Municipal bonds are issued by state and local governments, U.S. territories, and non-federal public agencies such as school districts, cities, and airport authorities. Municipal debt is considered the second safest form of debt security after U.S. government obligations. Some types of municipal bonds include all of the following EXCEPT:

  A. General obligation bonds

  B. Revenue bonds

  C. Single barreled bonds

  D. Moral obligation bonds

  Correct Answer: C

• Question 332:

  ____________ are the instruments with maturities of 30 years for new issues (10-to-30-years issues were allowed in the past). The amounts range from $1,000 to $1,000,000 and are sold at auction in a manner similar to that for treasury notes.

  A. Treasury notes

  B. Treasury receipts

  C. Treasury bonds

  D. Treasury bills

  Correct Answer: C

• Question 333:

  The U.S government is the largest borrower in the world and has a variety of debt instruments. These government obligations or issues are a safe form of debt security, and there has never been a default. The "full faith and credit of the government" back these issues. Some terms and definitions include:

  A. Negotiable securities

  B. Non-negotiable securities

  C. Series YY bonds

  D. Series NN bonds

  Correct Answer: AB

• Question 334:

  Unsecured bonds are not backed by assets and provide no claim on assets for bondholders These include:

  A. Debenture

  B. Subordinated debenture

  C. Collateral trust bonds

  D. Trust indenture

  Correct Answer: AB

• Question 335:

  It is a contract that defines corporation and bondholders responsibilities and is designed to protect the right of the bondholders. A trustee (most often a commercial bank) is generally appointed to ensure that the obligations defined in the agreement are of trust indenture must e filled with SEC. What is it?

  A. Bond certificate

  B. Trust indenture

  C. Secured bonds

  D. Collateral trust

  Correct Answer: B

• Question 336:

  A bond currently priced at $1,250 with a 10% nominal yield of $100 would have a current field of _____________. The same bond priced at $800 would have a current yield of __________.

  A. 9%, 12.5%

  B. 12.5%, 9%

  C. 8%, 12.5%

  D. 12.5%, 8%

  Correct Answer: C

• Question 337:

  Bond yield is the return on a bond. Which of the following terms may apply to bond yields?

  A. Nominal yield

  B. Market yield

  C. Yield to Maturity

  D. Both A and C

  Correct Answer: D

• Question 338:

  Notes and bonds are long-term debt instruments. Long-term debt instruments are sold at ______________ when the market rate _____________ the stated interest rate.

  A. Discount, exceeds

  B. Premium, exceeds

  C. Discount, less than

  D. Premium, less than

  Correct Answer: A

• Question 339:

  These are similar to coupon bonds in that ownership is based on possession. These have not been issued for the last couple of decades, however those previously issued will continue to exist until they reach maturity. What are these?

  A. Registered bonds

  B. Bearer bonds

  C. Book-entry bonds

  D. Putable bonds

  Correct Answer: B

• Question 340:

  Which of the following is/are included in the specific steps for auditing short-term investments?

  A. Ensure that policies and procedures for short-term trading activities exist, are periodically reviewed for changes, and are properly approved

  B. Review to ensure that trading policies include allowed and restricted trading instruments, approved traders

  C. Review the short-term trading activity to ensure compliance with trading policies and procedures and applicable regulatory environment

  D. All of the above

  Correct Answer: D