» CFA 1 – 10 questions

Venture capital most commonly refers to:

Minority investing in mature capital

Financing for start-ups

Privatizing public firms

Galactic Hyper is a chain of hypermarkets who sells most of its products for cash, which is why its days sales outstanding are as low as 22 days. Assuming that the firm's average receivables are $234,000, and the cost of goods sold (COGS) for the 1-year period is $1,245,000, the annual sales of Galactic are closest to:

$3,882,000.

$1,410,400.

$4,880,200.

An auction in which each bidder submits a price or bid to the auctioneer simultaneously and independently is categorized as:

Dutch auction.

English auction.

Sealed bid auction.

Sullivan Investments, an asset management firm, complied with the GIPS standards on 1 January 2006. Can Sullivan link its non-GIPS compliance performance for periods beginning on or after 1 January 2000 with its GIPS compliance performance?

Yes

Only if it discloses periods of non-compliance.

No

Brodes is exploring new product opportunities. This particular line of business is about as systematically risky as Brodes's portfolio as a whole. How should Brodes best discount the present value of inflows and present value of outflows?

Discount both at the weighted average cost of capital.

Discount inflows at the risk-free rate and outflows at the weighted average cost of capital.

Discount inflows at the weighted average cost of capital and outflows at the risk-free rate.

Which of the following schools of economists applies the utility theory and argues that the government should not counteract business cycles?

Austrian school

Social economics school

Neoclassical school

The Sharpe Ratio measures'

return relative to beta

return relative to standard deviation

beta

Which of the following is the highest ranked unsecured debt?

Senior unsecured.

Senior subordinated.

First lien loan.

Which of the following is least likely a characteristic of open-ended mutual funds?

An open-end structure makes it easy to grow in size but creates pressure on the portfolio manager to manage the cash inflows and outflows.

In open-end funds, new shares are created and sold at a premium or a discount to net assets values depending on the demand for the shares.

Open-end funds accept new investment money and issue additional shares to existing or new investors. Therefore, the number of outstanding shares changes after every new investment.

Regarding business segments, companies are not required to provide:

disclose segment information under both IFRS and U.S, GAAP.

full financial statements for segments.

factors used to identify reportable segments.

CFA 1 - 10 Questions