American Bankers Association CTFA Exam - Topic 9 Question 35 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 35
Topic #: 9

[All CTFA Questions]

___________ 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

4 months ago

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

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Joseph

4 months ago

Definitely A! Keeping purchasing power is a must.

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Alberta

5 months ago

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

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My

5 months ago

Totally agree, inflation can really eat into returns.

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Andra

5 months ago

Capital preservation is key for long-term stability!

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Shawna

5 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

5 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

5 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

5 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

5 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

5 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

6 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

6 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

10 months ago

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

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Katina

10 months ago

C) Capital depreciation

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Leatha

10 months ago

B) Capital appreciation

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Dean

10 months ago

A) Capital preservation

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Carla

11 months ago

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

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Cristina

9 months ago

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

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Cristina

9 months ago

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

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Cristina

9 months ago

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

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Merlyn

11 months ago

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

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Goldie

9 months ago

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

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Myrtie

9 months ago

Capital appreciation? Maybe I should consider investing in stocks.

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Corrinne

9 months ago

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

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Keva

9 months ago

Capital preservation? That sounds like a safe bet.

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Cary

9 months ago

D) Capital budgeting

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Josefa

9 months ago

C) Capital depreciation

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Maia

9 months ago

B) Capital appreciation

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Dolores

9 months ago

A) Capital preservation

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Barbra

9 months ago

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

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Hester

10 months ago

B) Capital appreciation

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Arletta

10 months ago

Yes, investors want to minimize their risk of loss.

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Cherry

10 months ago

A) Capital preservation

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Izetta

11 months ago

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

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Idella

10 months ago

User1

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Jestine

10 months ago

User2

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Gail

11 months ago

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

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Adolph

11 months ago

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

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Pauline

11 months ago

A) Capital preservation

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