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American Bankers Association CTFA Exam - Topic 2 Question 97 Discussion

Actual exam question for American Bankers Association's CTFA exam
Question #: 97
Topic #: 2
[All CTFA Questions]

When one buys a cash instrument, for example 100 shares of ABC Inc., the payoff is linear(disregarding the impact of dividends). If share are purchased at $50 and the price appreciated to $75, we have ________ on a mark-to-mark basis.

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Suggested Answer: A

by Shayne at Nov 23, 2025, 04:51 PM

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Angelyn
8 hours ago
Wait, are we sure about that? Seems too easy.
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Justine
6 days ago
A) Made $2500 all the way! Where's the challenge in this question?
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Elise
11 days ago
D) None of these? Seriously? This is basic math, people.
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Claribel
16 days ago
Hmm, I'm going with C) Made $2500. Gotta love these linear payoff questions!
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Sherita
21 days ago
C) Made $2500 is the right choice. Straightforward calculation.
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Marg
26 days ago
I feel like I might be mixing up the terms here, but if we bought 100 shares at $50 and they went up to $75, wouldn't that mean we lost money? Or is it the opposite?
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Candida
1 month ago
This seems similar to a practice question where we calculated gains from stock purchases. I believe the answer is A) Made $2500.
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Helga
1 month ago
I'm not entirely sure, but I think if we bought at $50 and sold at $75, it should be a gain, right?
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Paul
1 month ago
I remember that the payoff from buying shares is based on the difference between the purchase price and the selling price, so I think we made $2500.
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Edison
2 months ago
Wait, I'm not sure about this. The wording of the question is a bit confusing, and I'm not entirely sure what a "cash instrument" is in this context. I'll have to review the material and see if I can figure out the right approach.
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Sena
2 months ago
I'm pretty confident about this one. The question is straightforward, and the math is simple. As long as you understand the concept of a linear payoff, you should be able to get this right.
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Elke
2 months ago
Okay, I think I got this. The key is that the payoff is linear, disregarding dividends. So the gain would simply be the difference between the purchase price and the selling price, multiplied by the number of shares. That means option C is the correct answer.
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Miles
2 months ago
Totally agree, it's a straightforward calculation!
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Leigha
2 months ago
A) Made $2500
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Theola
3 months ago
Haha, who needs a calculator for this? C) Made $2500, no doubt.
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Carri
3 months ago
A) Made $2500 is the correct answer. Easy question!
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Howard
3 months ago
Hmm, I'm a bit confused. The question is talking about a "cash instrument" and "mark-to-market basis," which makes me think there might be something more complicated going on here. I'll have to think this through carefully.
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Shawna
3 months ago
This seems pretty straightforward. I'd go with option C - made $2500. The question is asking about the payoff on a mark-to-market basis, and if the shares were bought at $50 and appreciated to $75, that's a $25 gain per share on 100 shares, which is $2500.
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Renato
2 months ago
I agree, option C makes sense. That's a solid gain!
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