CFA study guide (Answered) 211
Questions and Correct Answers, 100%
Correct. Updated Fall 2024/2025.
The weighted average number of years to receipt of the principal and interest payments that will result
in realization of the initial market discount rate on a bond is best described as
Macaulay duration
When parties exchange fixed cash payments for payments that depend on the returns to a stock or a
stock index, they are purchasing a(n)
Equity swap
When the market rate of interest falls after issuance, a company selecting the fair value option for
reporting a liability with a fixed coupon rate will report
a loss
The primary goal of both monetary and fiscal policy focuses on balancing economic growth and
Inflation
A market structure characterized by homogeneous/standardized product differentiation is best described
as
perfect competition and oligopoly
The market structure in which a firm sells all of the product it produces at the market equilibrium price is
best described as:
Perfect competition
The power of a test is the probability of:
rejecting the null when it is false
A graphical depiction of a continuous distribution shows the left tail to be longer than the right tail. The
distribution is best described as having:
Negative skewness
In setting the confidence interval for the population mean of a normal or approximately normal
distribution, and given that the sample size is small, Student's t-distribution is the most appropriate
approach when the variance is
Unknown
,The probability of Event A is 40%. The probability of Event B is 60%. The joint probability of ABis 40%.
The probability (P) that A or B occurs, or both occur, is closest to
60%
Ethical principles are sets of beliefs centered around:
societies views on what is considered good or bad conduct
If a firm restructures and wants to remain compliant with the GIPS standards, it should most likely:
maintain the historical performances for all composites
In order to provide investors with a more comprehensive view of a firm's performance, the current GIPS
standards includes new provisions related to:
various measures of risk
If the distribution of the population from which samples of size n are drawn is positively skewed and
given that the sample size, n, is large, the sampling distribution of the sample means is most likely to
have a:
distribution that is approximately normal
empirical probability
probability estimated from data as a relative frequency of occurrence
A z-test regarding a mean is most appropriate when the
variance is unknown and sample is small and normally distributed
An approximate t-test is used to test the differences between means of two populations when
unknown population variances cannot be assumed to be equal
The probability of generating a random number equal to any fixed point under a continuous uniform
distribution
zero
Accounting profit =
Total revenue - Total variable costs - Total fixed costs
opportunity cost of capital + opportunity cost of labor
If the prices of substitute resources decrease, the demand for a given resource will most likely
, decrease
Unemployment rate =
unemployed/labor force x 100
Based on the elasticities approach, a country can implement an exchange rate policy to improve its trade
balance most effectively if it imports and exports products:
traded in competitive markets
A central bank announcement of a program to raise rates to moderate inflation will most likely lead to:
revised interest rate expectations
The structural deficit is the deficit that would exist if
the economy was at full employment
Both monetary and fiscal policies can most likely be used by a government to:
influence the level of economic activity
labor is the only input and the benefit of technology is reflected in labor productivity in which model?
Ricardian
economies of scale
Cost decreases as output increases
diseconomies of scale
Cost increases as output increases
Personal income =
National income - Taxes - Undistributed corporate profits + Transfer payments
National income =
GDP + Capital consumption allowance
Fundamental Qualitative Characteristics
Relevance and Faithful representation
Enhancing Qualitative Characteristics
Comparability, verifiability, timeliness, and understandability
In IFRS Dividends received can be classified as
Operating or investing activity
Fixed Charge Coverage Ratio
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