CANNON TRUST
FUNDAMENTALS
EXAM QUESTIONS AND ANSWERS
THIS EXAM CONTAINS :
CANNON TRUST
CANNON TRUST FUNDAMENTALS
EXAM QUESTIONS AND ANSWERS
,Cannon Trust Fundamentals Practice Exam (2026–2027)
Section 1: Fiduciary Duties & Trust Basics (Q1–Q50)
A trustee’s primary responsibility is to:
A. Maximize personal profit
B. Act in the best interest of beneficiaries
C. Avoid all investments
D. Follow only federal law
Answer: B
The duty of loyalty requires trustees to:
A. Prioritize personal gain
B. Avoid conflicts of interest
C. Invest only in government bonds
D. Delegate all responsibilities
Answer: B
Which of the following is NOT a fiduciary duty?
A. Duty of prudence
B. Duty of loyalty
C. Duty of impartiality
D. Duty of secrecy from beneficiaries
Answer: D
The “Prudent Investor Rule” obligates trustees to:
A. Invest only in risk‑free assets
,B. Diversify investments appropriately
C. Guarantee profits to beneficiaries
D. Avoid professional advice
Answer: B
A trustee must keep beneficiaries informed under the duty of:
A. Loyalty
B. Impartiality
C. Disclosure
D. Confidentiality
Answer: C
The initial step in administering a trust is:
A. Filing tax returns
B. Identifying trust assets
C. Distributing income immediately
D. Hiring investment advisors
Answer: B
Trust accounting requires:
A. Mixing personal and trust funds
B. Clear separation of principal and income
C. Reporting only to the grantor
D. Ignoring minor beneficiaries
Answer: B
, A discretionary trust gives the trustee authority to:
A. Decide whether and how much to distribute
B. Eliminate beneficiaries
C. Change the trust terms
D. Avoid fiduciary duties
Answer: A
Which document governs trust administration?
A. Trustee’s personal notes
B. The trust instrument
C. Beneficiary agreements
D. State tax code only
Answer: B
Failure to properly administer a trust may result in:
A. Trustee liability
B. Beneficiary liability
C. Automatic termination of the trust
D. No consequences
Answer: A
FUNDAMENTALS
EXAM QUESTIONS AND ANSWERS
THIS EXAM CONTAINS :
CANNON TRUST
CANNON TRUST FUNDAMENTALS
EXAM QUESTIONS AND ANSWERS
,Cannon Trust Fundamentals Practice Exam (2026–2027)
Section 1: Fiduciary Duties & Trust Basics (Q1–Q50)
A trustee’s primary responsibility is to:
A. Maximize personal profit
B. Act in the best interest of beneficiaries
C. Avoid all investments
D. Follow only federal law
Answer: B
The duty of loyalty requires trustees to:
A. Prioritize personal gain
B. Avoid conflicts of interest
C. Invest only in government bonds
D. Delegate all responsibilities
Answer: B
Which of the following is NOT a fiduciary duty?
A. Duty of prudence
B. Duty of loyalty
C. Duty of impartiality
D. Duty of secrecy from beneficiaries
Answer: D
The “Prudent Investor Rule” obligates trustees to:
A. Invest only in risk‑free assets
,B. Diversify investments appropriately
C. Guarantee profits to beneficiaries
D. Avoid professional advice
Answer: B
A trustee must keep beneficiaries informed under the duty of:
A. Loyalty
B. Impartiality
C. Disclosure
D. Confidentiality
Answer: C
The initial step in administering a trust is:
A. Filing tax returns
B. Identifying trust assets
C. Distributing income immediately
D. Hiring investment advisors
Answer: B
Trust accounting requires:
A. Mixing personal and trust funds
B. Clear separation of principal and income
C. Reporting only to the grantor
D. Ignoring minor beneficiaries
Answer: B
, A discretionary trust gives the trustee authority to:
A. Decide whether and how much to distribute
B. Eliminate beneficiaries
C. Change the trust terms
D. Avoid fiduciary duties
Answer: A
Which document governs trust administration?
A. Trustee’s personal notes
B. The trust instrument
C. Beneficiary agreements
D. State tax code only
Answer: B
Failure to properly administer a trust may result in:
A. Trustee liability
B. Beneficiary liability
C. Automatic termination of the trust
D. No consequences
Answer: A
