CFA 1 - 50 Questions

Which of the following statements is most likely correct regarding the major sections of GIPS standards?
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:
Regarding business segments, companies are not required to provide:
Market equilibrium is most likely described as the price at which:
Which of the following statements are accurate regarding corporate governance? I. A board should have a committee of independent members who set executive compensation. II. A board should have the authority to hire third-party consultants. III. Elections should be staggered to let the board members execute long-term plans.
As of September 5, 2014, the current price of corn is $3.60 per bushel. Farmers have stopped asking if they will profit this year - the question now is how much will they lose for their year's work. Under which of the following 6-month futures corn prices would backwardation most likely be present?
Under IFRS cash receipt of interest cannot be classified as a (n):
Of the following, which response best describes for whom an investment policy statement (IPS) should be developed?
Gloria Inc. ships 5 machines to a customer at $5,550 per machine. The total cost for Gloria Inc. is $26,250 and payment is due in 60 days. No cash changes hands at delivery. The accounting treatment related to this transaction at the time of shipment most likely includes:
A stock index representing U.S. manufacturing would most accurately be described as a:
The production process of a calculator could look something like the following: Cost of factory buying raw materials: $2.00 Cost of retailer buying from factory: $5.00 Cost of customer buying from retailer: $9.00
A U.S. based firm has a position in a European bond for a par value of €50 million. For a 1 basis point increase in yield the market value of the investment changes to €49.85 million and for a 1 basis point decrease in yield investment value changes to €51.23 million. The price value of basis point for the investment is closest to:
According to Standard I-A ‘Knowledge of Law’, members and candidates are required to:
Which of the following is least likely a macroeconomic influence that affects an industry’s growth? Changes in:
Which of the following are not part of other comprehensive income? I. Exchange differences on translating foreign operations II. Issuance of equity shares III. Actuarial gains/losses IV. Loss from sale of machinery
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:
Under which measurement scale is data categorized, but not ranked?
A real exchange rate is different from a nominal exchange rate in that the real exchange rate:
A corporation’s board of directors typically has several committees that serve various functions. The committees furthermore report to the board regularly. Which of the following board committees is most likely responsible for monitoring the financial reporting process?
An investor uses simple stock screen criteria based on a P/E ratio of less than 5 and financial leverage ratio of less than 0.5. The investor will least likely exclude stocks of companies:
Investors have the tendency to be:
The implied volatility on S&P 500 options has decreased over the past month. An analyst would most likely conclude that:
Which of the following statements is most likely correct regarding parametric and non-parametric tests?
Which of the following statement is least accurate regarding Standard V(C) - Record Retention?
You are given: Price of corn today: $7.00 per bushel 1-year corn future: $8.00 per bushel Which of the following terms most accurately describes this environment?
Reginald Fuller manages institutional portfolios on behalf of BDY Advisors. Fuller also manages an account of a trust company named SOTO Trust. The trust offered Fuller a $50,000 cash gift if he succeeded in achieving a 20% return this year. The best practice for Fuller includes:
A consumer with a steeper indifference curve most likely indicates that his marginal rate of substitution (MRSXY) is:
Which of the following statements is most likely correct regarding Global Investment Performance Standards' compliance requirements?
Given callable common shares:
A hypothetical futures contract has a current market price of $19 and initial margin requirement of $9. The maintenance margin requirement is $4. For 15 short contracts, the price at which a margin call will trigger is:
For a normal random variable approximately 68% of all outcomes fall within:
Identify the most appropriate explanation of ''channel stuffing''.
On 1 January 2014, Neway Construction entered into a contract to lay pipes for a factory. The project will take an estimated two years to complete. As stated in the contract, total revenue for the project is an estimated $2,500,000. Total cost is expected to be 70% of revenue. Neway incurred $800,000 of costs in 2014. Assuming Neway estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the percentage-of-completion method, the revenue that will be reported in 2014 is closest to:
What is the most likely result of a decrease in the risk-free rate of return on put and call option prices?
Which of the following orders would most likely go unexecuted?
Anita Vizquel, CFA, is a sole practitioner providing investment advisory services. Based on extensive and ongoing research, Vizquel believes that Viatex Brokerage provides the best execution at a competitive price and she uses the firm for the majority of her clients' trades. In recognition of her loyalty, Viatex provides Vizquel with soft dollar commissions in the form of research reports that Vizquel finds very relevant for some, but not all, of her clients. Has Vizquel violated the CFA Standards?
What would be a recommended action for a firm that has disclosed material non-public information in an analyst meeting?
A primary motivation for investment in commodities is most likely the:
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 U.S. GAAP at the end of year 1, EBB would recognize $0 revenue, $0 cost of construction and $0 income. The $26 million expenditure would be recorded as an increase in inventory account and decrease in cash (if EBB paid cash for all expenditures).
In the case of a collusion, firms agree to:
Of the following, which represent the most significant advantage of real estate?
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?
In the event of bankruptcy, which of the following is most accurate?
Which of the following two measures are based on the total risk and provide similar rankings?
Under which of the following accounting standards would a deferred tax be recognised on temporary differences arising from undistributed profits of associates (investments) when the investor controls the sharing of profit?
Russell Bellamy, CFA, a manager with a regional bank, sends out a regular newsletter to clients on a monthly basis. Independent of his position, Bellamy has been appointed to the Board of a local nonprofit organization that provides grants to local artists. In his latest newsletter to clients, Bellamy mentions his appointment as well as the fact that the organization recently announced the start of a fundraising campaign. Has Bellamy most likely violated the Standards?
Leading economic indicators (LEI) are variables that:
The correlation of a risk-free asset to a risky portfolio is closest to
Under which of the following situations would a nonparametric test be more appropriate than a parametric test?
CFA 1 - 50 Questions
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