IIA iia-cfsa practice test

Certified Financial Services Auditor Exam

Last exam update: Sep 28 ,2024
Page 1 out of 34. Viewing questions 1-15 out of 511

Question 1

___________ have relatively low risks, compared to other mutual funds.

  • A. Stock funds
  • B. Hedge funds
  • C. Money funds
  • D. Both B and C
Answer:

C

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Question 2

Money market funds bond funds (also called fixed income funds) , and stock funds (also called
equity funds) are the categories of:

  • A. Mutual funds
  • B. Professionally managed portfolio
  • C. Hedge funds
  • D. None of these
Answer:

A

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Question 3

End users need to hedge the prices at which they can purchase these commodities for instance:

  • A. A University might want to lock in the price at which it purchases electricity to supply its air conditioning units for upcoming summer months
  • B. An airline wants to lock in the price of the jet fuel it needs to purchase in order to satisfy the peak in seasonal demand for travel
  • C. A cotton producer wants to hedge his exposure to changes in the price of fertilizers or his end product (cotton)
  • D. Only A and B
Answer:

D

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Question 4

I- A gold producers wants to hedge his losses attributable to a fall in the price of gold for his
current gold inventory.
II- A cattle farmer wants to hedge his exposure to changes in the price of his livestock These are the
examples of __________ who need to manage their exposure to fluctuations in the prices of their
commodities.

  • A. Hedgers
  • B. Producers
  • C. Speculators
  • D. None of these
Answer:

B

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Question 5

Investors typically cannot ascertain the exact makeup of a funds portfolio at any given time, nor can
they directly influence which securities the fund manager buys and sells or the timing of those
trades. This is because of _______ in mutual funds.

  • A. Price uncertainty
  • B. Lack of control
  • C. Costs despite negative returns
  • D. All of these
Answer:

B

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Question 6

All of these are disadvantages of mutual funds EXCEPT:

  • A. Cost despite negative returns
  • B. Liquidity
  • C. Lack of control
  • D. Price uncertainty
Answer:

B

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Question 7

Mutual funds provide an attractive investment choice because they generally offer the following
feature/s:

  • A. Professional Management
  • B. Diversification
  • C. Affordability
  • D. All of these
Answer:

D

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Question 8

One fund may invest on mostly established blue chip (Companies that pay regular dividends).
Another fund may invest in newer technology companies that pay no dividends but that may have
more potential for growth. These are the examples of:

  • A. Mutual funds
  • B. Index funds
  • C. Stock funds
  • D. Bond funds
Answer:

C

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Question 9

Close-end funds:

  • A. Are not redeemable
  • B. The investment portfolios generally are managed by separate entities
  • C. Are permitted to invest in a greater amount of “illiquid” securities than mutual funds.
  • D. All of these
Answer:

D

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Question 10

Close-end funds are traded on:

  • A. A primary market
  • B. Secondary market
  • C. Tertiary market
  • D. Are not traded anywhere
Answer:

B

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Question 11

A UIT typically issues redeemable securities (or “units”), like a mutual fund, which means:

  • A. That the UITs typically will make a one-time “public offering”
  • B. A UIT does not activity trade its investment portfolio
  • C. That the UIT will, buy back an investor’s request at their approximate net asset value
  • D. All of these
Answer:

C

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Question 12

The approximate per-share NAV plus any fees the fund imposes is the price:

  • A. That investors pay to purchase mutual fund
  • B. That investors receive on redemptions
  • C. Per share NAV
  • D. All of these
Answer:

A

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Question 13

If a mutual fund has an NAV of $100 million, and investors own $10,000,000 of funds shares, the
funds per share value will be:

  • A. $100
  • B. $1
  • C. $10
  • D. None of these
Answer:

C

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Question 14

There are some investment companies, known as exchange-traded funds or ETFS, which are legally
classified as open-end companies or UITs. EFTs differ from traditional open-end companies and UITs
because:

  • A. Pursuant to SEC exemptive orders
  • B. Shares issued by ETFs Traded on a secondary market
  • C. Are lonely redeem able in very large blocks (Blocks of 50,000 shares for example)
  • D. All of these
Answer:

D

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Question 15

I- With reference to the granting of customer credit lines a thorough analysis of the customers
overall financial position is performed prior to trading authorization.
II-confirmations of each transaction are sent to customers indicating the quantity, delivery
month and the contract price to ensure the integrity of transactions.
III-Original margin deposits in cash or acceptable securities to guarantee performance of
contracts are determined in accordance These all are adequate procedures and controls associated
with:

  • A. Commodity transaction
  • B. Mutual funds audit
  • C. Bond audit
  • D. None of these
Answer:

A

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