CFA 1 - 25 Questions

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?
Which of the following statement is least accurate regarding Standard V(C) - Record Retention?
Which of the following statements is most likely correct regarding the major sections of GIPS standards?
Flotation costs are those costs which are incurred by a company during the process of raising additional capital. The value of these flotation costs is typically related to the amount and type of capital being raised. Which of the following statements is least likely accurate regarding flotation costs? 2
What is the most likely result of a decrease in the risk-free rate of return on put and call option prices?
A company has just issued $5 million of mandatory redeemable preferred shares with a par value of $100 per share and a 7 percent dividend. The issue matures in 5 years. Which of the following statements is least likely correct? The company’s:
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?
Which of the following is least accurately considered a firm's factor of production?
According to Standard I-A ‘Knowledge of Law’, members and candidates are required to:
Which of the following statements regarding market efficiency is least likely accurate?
Market equilibrium is most likely described as the price at which:
Two hypothetical currencies – ABC and XYZ – are trading at a spot rate of 1.60 ABC/XYZ . If the interest rate in ABC and XYZ's countries are 7% and 5%, respectively, the arbitrage-free forward rate ABC/YXZ is closest to:
Which of the following schools of economists applies the utility theory and argues that the government should not counteract business cycles?
The correlation of a risk-free asset to a risky portfolio is closest to
Which of the following elements of a financial statement is least likely to be directly related to the measurement of financial position?
In the event of bankruptcy, which of the following is most accurate?
A publishing firm contributed $250,000 to support some philanthropic projects. The firm immediately expensed that amount in its income statement for the current fiscal year. According to applicable tax legislation such contributions are not tax-deductible.
McKinney Alpha is an accredited research firm that only hires experienced and competent analysts offering them training and financial courses from time to time. The firm allows analysts to either prepare their own research or rely on secondary sources. Tyler Klein, an analyst at McKinney uses a research report prepared at Gemma Brokerage. If Klein will use that report, he will:
Samantha Bjork, CFA, has been offered an equity analyst position at a firm that has not adopted a formal code of ethics. Which of the following statements is most likely correct? Bjork:
Determine the conversion value of a convertible bond if the conversion ratio is 7:3 and the market price of the bond is $30.
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?
According to the Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit, a risk factor related to opportunity exists when:
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
Which of the following is least likely a macroeconomic influence that affects an industry’s growth? Changes in:
Bill Hardwick, CFA, is a bond specialist and a fixed-income portfolio manager for a large pension fund. Hardwick is considering inclusion of highly structured mortgage securities in the pension fund. However, his team has analyzed these products and has come to the conclusion that it is difficult to distinguish between good and bad investment options due to the complexity and layers of the securities. Rather than sort it all out, Hardwick opts to just simply avoid this sector entirely and invest instead in simpler securities that can be more easily analyzed and understood. Has Hardwick most likely violated the Standards?
CFA 1 - 25 Questions
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