American Bankers Association CTFA Exam - Topic 9 Question 35 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 35
Topic #: 9

___________ means that investors want to minimize their risk of loss, usually in real terms: They seek to maintain the purchasing power of their investment. In other words, the return needs to be no less than the rate of inflation.

ACapital preservation

BCapital appreciation

CCapital depreciation

DCapita budgeting

Show Suggested Answer

Suggested Answer: B

by Xochitl at Aug 25, 2022, 01:30 AM

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Veronika

8 months ago

I thought capital budgeting was more about planning, not this.

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Joseph

8 months ago

Definitely A! Keeping purchasing power is a must.

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Alberta

9 months ago

Wait, is capital depreciation really a thing? Sounds off.

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My

9 months ago

Totally agree, inflation can really eat into returns.

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Andra

9 months ago

Capital preservation is key for long-term stability!

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Shawna

9 months ago

I keep mixing up capital preservation and capital budgeting; I hope I don't confuse them on the exam!

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Nicolette

9 months ago

I feel like I've seen a question like this before, and it was definitely about keeping up with inflation, so A sounds right to me.

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Helaine

9 months ago

I'm not entirely sure, but I remember something about capital appreciation being more about growth rather than just preserving value.

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Glenn

9 months ago

I think the answer might be A, capital preservation, since it relates to minimizing risk and maintaining purchasing power.

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Barb

9 months ago

Hmm, I'm a little unsure about this one. The question mentions that the risk management plan is critical, but it doesn't explicitly state when it's created. I'll have to think this through carefully before selecting an answer.

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Rory

9 months ago

I have a nagging feeling that there could be a compilation error with the way `fourth` and `fifth` are initialized since they rely on the `list` and `vector`.

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Kimbery

10 months ago

Okay, let me think this through step-by-step. The key is understanding how the default scheduler works and the different queue types. I've got this!

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Deandrea

10 months ago

I remember studying cash transaction exemptions, but I'm not entirely sure if the 30 days is too short for a valid exemption.

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Mitsue

1 year ago

Capita budgeting? I thought we were talking about investments, not the Roman Empire.

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Katina

1 year ago

C) Capital depreciation

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Leatha

1 year ago

B) Capital appreciation

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Dean

1 year ago

A) Capital preservation

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Carla

1 year ago

Capital depreciation? Guess I should just throw my money into the nearest volcano and call it a day.

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Cristina

1 year ago

Investors aim for capital preservation to protect their investments from losing value.

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Cristina

1 year ago

Capital preservation is all about minimizing risk and maintaining purchasing power.

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Cristina

1 year ago

No, that's not the right option. It's actually capital preservation.

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Merlyn

1 year ago

Capital appreciation? Looks like I need to start a cryptocurrency farm in my basement.

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Goldie

1 year ago

That's a good idea, but remember to diversify your portfolio.

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Myrtie

1 year ago

Capital appreciation? Maybe I should consider investing in stocks.

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Corrinne

1 year ago

Yes, investors want to minimize risk and maintain purchasing power.

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Keva

1 year ago

Capital preservation? That sounds like a safe bet.

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Cary

1 year ago

D) Capital budgeting

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Josefa

1 year ago

C) Capital depreciation

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Maia

1 year ago

B) Capital appreciation

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Dolores

1 year ago

A) Capital preservation

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Barbra

1 year ago

That's right, they seek to maintain the purchasing power of their investment.

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Hester

1 year ago

B) Capital appreciation

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Arletta

1 year ago

Yes, investors want to minimize their risk of loss.

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Cherry

1 year ago

A) Capital preservation

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Izetta

1 year ago

Capital preservation? Sounds like I need to wrap my investments in bubble wrap!

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Idella

1 year ago

User1

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Jestine

1 year ago

User2

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Gail

1 year ago

I agree with A. It's important to minimize risk and maintain purchasing power.

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Adolph

1 year ago

I think it's A too. Investors always want to protect their capital.

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Pauline

1 year ago

A) Capital preservation

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