CFA 1 - 50 Questions

Leading economic indicators (LEI) are variables that:
An analyst makes the following comment regarding derivative contracts: “All derivative contracts must have an underlying, two parties – a buyer and a seller, and low degrees of leverage” The comment is most likely to be:
Under IFRS the definitional criteria for identifiable intangible assets most likely includes:
Which of the following would most accurately be considered a primary source of liquidity?
Comel Systems, Inc. is exploring entering a new product line. This particular line is significantly riskier (both generally and systematically) than the other lines. If Comel's weighted average cost of capital is 8.0%, the rate it should use in assessing the new product line is most likely:
In repurchase agreements, repo margin provides a margin of safety to the:
A trader is analyzing the impact of a recent increase in the volatility of a particular stock on the value of European call and put options on that underlying. Increase in the volatility will most likely lead to:
According to European Central Bank (ECB), debt securities with a maturity of up to two years are part of which of the following aggregate categories of money?
Under which of the following situations would an increased return on equity (ROE) more likely be perceived negatively by shareholders?
Which of the following is considered to be best practice from shareowners’ perspective?
Which fo the following best describes a stockholder's claim to a company's assets under bankruptcy?
An investor purchases a 2-year zero-coupon bond with par value of $1,000 at $960. The implied interest earned on the bond is closest to:
Under which of the following cases is the capitalization of development cost most likely prohibited?
Which of the following statements is least likely accurate?
Which of the following statements is most likely correct regarding parametric and non-parametric tests?
The intercept of security characteristic line (SCL) is:
Which of the following statements is/are accurate regarding the common-size analysis of financial statements? I. A vertical common-size balance sheet presents all the line items as a percentage of total assets. II. A vertical common-size income statement presents all the line items as a percentage of net income. III. A horizontal common-size income statement calculates all line items as a percentage of the base year's income statement.
A recently issued sovereign bond for a given maturity is also referred to as:
The probability that the Eurozone economy will grow this year is 18%, and the probability that the European Central Bank (ECB) will loosen its monetary policy is 52%. Assuming that the joint probability that the Eurozone economy will grow and the ECB will loosen its monetary policy is 45%, then the probability that either the Eurozone economy will grow or the ECB will loosen its the monetary policy is closest to:
An investor placed a market buy order for thinly traded shares of G.Z.T Inc. The main drawback for the investor would be that:
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?
In conversation with a prospective client, a portfolio manager stated “I cannot guarantee that you will earn 18% on equities this year but I can provide you a range within which your return will lie. My range is quite popular among my clients and has a history of ten years. Each year, I develop the range by using financial models, economic forecasts and accredited reports. Based on the CFA Institute Standards, the portfolio manager:
Nisha Mazhar is a risk analyst, and she has been given the task to identify the factor that helps measure her organization's risk tolerance. Which of the following factors will help Mazhar complete her task?
Private equity investments tend to be:
Which of the following is most likely common among the assumptions of the Ricardian model and Heckscher-Ohlin model?
Which of the following is defined as the latest sovereign bond issue for a given maturity?
Exchange-traded securities are most likely referred to as credit risk-free because:
You are the favorite to win a tennis tournament. In fact, oddsmakers give you a 90% chance to win each match, regardless of who you are playing. Each match is considered an independent event. The probability of you winning all 10 matches to claim the trophy is closest to:
Due to the upcoming elections in the U.S., the CAD/USD currency exchange rates has risen from 1.17 to 1.31. Calculate the percentage change in the value of the USD in terms of CAD.
Which of the following statements is most likely correct? Enterprise value:
Of the following, which response best describes for whom an investment policy statement (IPS) should be developed?
Which of the following statement is least accurate regarding Standard V(C) - Record Retention?
Given callable common shares:
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:
Which of the following characteristics is unique to the fee structure of private equity funds? 2
Which of the following statements is most likely correct regarding verification?
A firm values its assets using fair values. Its asset base comprises of the following asset categories: Category 1: Fee-paying discretionary portfolios Category 2: Non-fee paying discretionary portfolios Category 3: Fee-paying non-discretionary portfolios Category 4: Non-fee paying non-discretionary portfolios Based on the requirements of the Global Investment Performance Standards (GIPS), for periods beginning on or after January 1, 2011, the firm's total assets are the aggregate of:
The short in a currency forward most likely:
Howard Walton, CFA, is a member of a team working on a heating oil price forecast. There are some specific portions of the forecast with which Walton does not agree, but he is generally confident of the group’s decision-making processes. Which of the following statements is most accurate? Walton:
ccording to Standard II-A ‘Material Non-Public Information’, if a member or candidate determines that information is material he should make reasonable efforts to:
The correlation of a risk-free asset to a risky portfolio is closest to
According to the Standards of Practice Handbook, which of the following statements is most likely correct regarding priority of transactions?
Sammy Sneadle, CFA, is the founder and portfolio manager of the Everglades Fund. In its first year the fund generated a return of 30 percent. Building on the fund’s performance, Sneadle created new marketing materials that showed the fund’s gross 1- year return as well as the 3 and 5-year returns which he calculated by using back-tested performance information. As the marketing material is used only for presentations to institutional clients, Sneadle does not mention the inclusion of back-tested data. According to the Standards of Practice Handbook, how did Sneadle violate CFA Institute Standards of Professional Conduct?
Which of the following properties of correlation and covariance is most likely correct?
A "war chest" typically describes a company having a large amount of:
Anne Berry purchased an electric vaporizer to reduce the contamination in fruit juices in her plant. She paid $550,000 to the vendor and $4,000 to another company for the installation of the machine. She recorded the vaporizer in her books at $554,000. Which valuation method was adopted in this case?
Demand is most accurately described as:
If a European bank is looking to borrow money from another bank over a short term, it would be most likely to use which measure for the assigned rate?
What happens to the prices in the long run when the aggregate demand increases and the economy recovers from an inflationary gap (classical approach)?
Which of the following is most likely an example of a non-amortizing loan?
CFA 1 - 50 Questions
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