[Aug-2021] Updated CFA Level CFA-Level-I Exam Questions BUNDLE PACK
Master The CFA Content CFA-Level-I EXAM DUMPS WITH GUARANTEED SUCCESS!
NEW QUESTION 518
Which type of common shares is the most risky?
- A. callable common shares.
- B. puttable common shares.
- C. normal common shares.
Answer: A
Explanation:
This is because the call price limits investors potential future total return.
NEW QUESTION 519
Suppose that P(A) = 0.7 and P(AB) = 0.42, find the probability of B given A, P(B|A).
- A. 0.294
- B. 0.829
- C. 0.600
Answer: C
Explanation:
The correct answer is P(B|A) = P(AB)/P(A) = 0.42/0.7 = 0.60.
NEW QUESTION 520
Which one of the following best explains why the crowding out effect, brought on by an increase in government spending financed by the sale of government bonds to the public, is likely to reduce aggregate demand?
- A. The question is based on a false premise. The crowding-out effect suggests that the government's selling of bonds to the public is a very effective tool with which to stimulate demand.
- B. The sale of government bonds to the public reduces the money supply and will offset the expansionary impact of the increased government spending.
- C. The sale of government bonds to the public will drive up interest rates, thereby retarding private investment and aggregate demand.
Answer: C
NEW QUESTION 521
The joint probability of three events is given as 35%. Their individual probabilities are 50%, 60%, and
8 0%. What should be their joint probability if they are independent?
- A. 35%
- B. 24%
- C. 63.3%
Answer: B
Explanation:
For the events to be independent, their joint probability should equal the product of their individual probabilities = 0.50 x 0.60 x 0.80 = 0.24, or 24%. Since this is different from 35%, the events are not independent.
NEW QUESTION 522
A bank quotes 7.80% with an effective annual interest rate of 8.11%. Is the compounding
- A. daily?
- B. monthly?
- C. quarterly?
Answer: A
Explanation:
m
Use the formula 1 + i = (1 + j/m) , where i = effective interest rate, and j = nominal interest rate, Thus 1 + m
0 .0811 = (1 + 0.078/m) and solve for m by trial and error.
NEW QUESTION 523
An individual asset's relative systematic risk is calculated based on the:
- A. Capital market line.
- B. Efficient frontier.
- C. Security market line.
Answer: C
Explanation:
An individual asset's relative systematic risk is calculated based on the Security Market Line.
NEW QUESTION 524
The benefits provided by investment companies include all of the following except:
- A. individually tailored portfolios
- B. professional management and record keeping
- C. diversification
Answer: A
Explanation:
Investment companies benefits of professional management, diversification, and record keeping. They typically do not provide individually tailored portfolios.
NEW QUESTION 525
If ending inventory is understated by $2,000 and beginning inventory is overstated by $3,000, the net income will be
- A. understated by $5,000.
- B. overstated by $5,000.
- C. overstated by $1,000.
Answer: A
Explanation:
COGS = BI + Purchase - EI). If BI is higher, the COGS is higher. If EI is lower, the COGS is higher. Based on the relationship, the COGS is overstated by $2,000 + $3,000. The net income is understated by $5,000.
NEW QUESTION 526
If a researcher were to choose random days and calculate the difference in sales volume for the two fish markets in New Bedford, Massachusetts and analyze those differences, what type of experiment is being conducted?
- A. t test
- B. F test
- C. paired difference
Answer: C
NEW QUESTION 527
Analysts should go beyond the "bottom line" when analyzing and interpreting financial statements because
- A. nonrecurring items included in net income affect ratio analysis.
- B. calculations of trends and ratios are unreliable.
- C. math errors are sometimes made.
Answer: A
Explanation:
To avoid reaching incorrect conclusions, analysts should go beyond the "bottom line" when analyzing and interpreting financial statements because nonrecurring items included in net income affect ratio analysis. The calculations of trends and ratios are based on the assumption that net income and other components are comparable from year to year and from company to company. Going beyond the
"bottom line" means looking at the components that created the final result, in this case, net income which is used in ratio analysis. If nonrecurring items exist, they should be considered when making interpretations.
NEW QUESTION 528
It is estimated that 70% of motorists on a certain stretch of highway exceed the speed limit. A highway patrolman with a radar device randomly selects 15 motorists on this part of the highway and checks their speed. What is the probability that at least 13 are caught speeding?
- A. 0.128
- B. 0.908
- C. 0.092
Answer: A
Explanation:
We use the binomial distribution with n = 15 and pai = 0.7 to get P(X>= 13) = p(13) + p(14) + p(15) = 0.092 + 0.031 + 0.005 = 0.128.
NEW QUESTION 529
Which of the following is true for monopolistically competitive firms in long-run equilibrium?
- A. Price exceeds average total cost.
- B. Price equals the minimum average total cost.
- C. Price exceeds marginal cost.
Answer: C
Explanation:
Since the monopolistic competitor operates where P = ATC in the long run and MC ATC for the firm then it is true that P > MC
NEW QUESTION 530
Each of the following transactions has the effect of reducing retained earnings except ________.
I). stock splits.
II). cash dividends.
III). stock dividends.
IV). dividends in kind.
- A. I, II, III and IV.
- B. I only.
- C. I and IV.
Answer: B
Explanation:
Stock splits have no effect on retained earnings. They are simply a redistribution of the same equity of the company but with a different number of outstanding shares.
NEW QUESTION 531
Futures contracts differ from forward contracts in the following ways:
I). Futures contracts are standardized.
II). For futures, performance of each party is guaranteed by a clearinghouse.
III). Futures contracts require a daily settling of any gains or losses.
- A. I and III only
- B. I and II only
- C. I, II, and III
Answer: C
NEW QUESTION 532
Which of the following combinations would not be a likely outcome by combining an interest rate swap with a currency swap?
- A. A fixed rate in the U.S. dollar swapped for floating rate in a foreign currency.
- B. A fixed rate in the U.S. dollar swapped for floating rate in U.S. dollar.
- C. A floating rate in the U.S. dollar swapped for fixing rate in foreign currency.
Answer: B
Explanation:
A fixed rate in U.S. dollar swapped for floating rate in U.S. dollar is just a plain vanilla interest rate swap. Hence, this structure would not involve a currency swap and it would not constitute a correct answer.
NEW QUESTION 533
......
Pass CFA CFA-Level-I Exam – Experts Are Here To Help You: https://www.passleadervce.com/CFA-Level/reliable-CFA-Level-I-exam-learning-guide.html
Get Latest CFA Level CFA-Level-I Practice Test For Quick Preparation: https://drive.google.com/open?id=162-DQeNUYVKmvKdDJoQRmoKdR2-fn-es