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CFA Level 1 Sample Questions With Complete Solutions Latest Update
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CFA Level 1 Sample Questions With Complete Solutions Latest Update
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CFA Level 1 Sample Questions With CompleteSolutions Latest Update
The feature of a well-functioning investment industry that gives investors the
ability to quickly buy and sell a significant amount of an investment without
having a material impact on the price is described as:
A liquidity
B competitive markets
C risk transfer - correct answers A
According to fundamental ethical and professional principles applicable to the
investment industry, which group should have its interests ranked first?
A Clients
B Employers
C Co-workers - correct answers A
Regulators often seek public consultation prior to the implementation of new
regulations in order to:
A ensure the new rules are favorable to those likely to be affected
B educate consumers and service providers on the new rules
C improve the final rules by undertaking a cost-benefit analysis - correct answers C
A financial advisory firm that implements internal policies regarding information
barriers, suitability standards, and restrictions on self-dealing is addressing issues
related to which of the following types of regulation?
A Sales practices rules
,B Trading rules
C Disclosure rules - correct answers A
The best financial statement to use to find information about what a company
owns and owes others is called the:
A income statement
B balance sheet
C cash flow statement - correct answers B
If two variables do not have a strong (linear) relationship, the correlation
coefficient between the two variables will be closest to:
A0
B -1
C +1 - correct answers A
In contrast to forward contracts, futures contracts:
A trade on organized exchanges
B have contract sizes tailored to investor needs
C have negotiable expiration dates - correct answers A
Which type of private equity strategy is most likely used to finance a start-up
company?
A Growth equity
B Buyout
C Venture capital - correct answers C
,In commercial real estate investment, the amount derived from discounting future
cash flows of lease and rental payments plus capital appreciation represents the
value of the:
A asset
B equity
C liability - correct answers A
The type of bank that is exclusively owned by its members is a:
A savings and loan bank
B commercial bank
C mutual bank - correct answers C
A form of pension plan in which the participant has some ability to determine how
pension contributions are invested is described as a(n):
A defined contribution plan
B endowment plan
C defined benefit plan - correct answers A
An investor attempting to replicate a price-weighted index would hold an equal:
A percentage of outstanding shares of each security in the index
B amount invested in each security in the index
C number of units (shares) of each security in the index - correct answers C
From the standpoint of taxes, investors will benefit from:
, A deferring taxes to the future if tax rates will be higher in the future
B realizing gains via stock repurchases as opposed to receiving the same gains as
dividends
C selling appreciated shares to meet cash needs instead of borrowing against
them - correct answers B
If a decrease in the selling price of a company's only product results in an increase
in the company's total revenue, the demand for the company's product is:
A elastic
B unit-elastic
C inelastic - correct answers A
Which of the following actions taken by a central bank is expansionary?
A Increasing the reserve requirement
B The purchase of government bonds
C Increasing its policy rate - correct answers B
Which of the following government actions will most likely lead to an increase in
the level of aggregate demand? A reduction in:
A transfer payments
B public spending on social goods and infrastructure
C the capital gains tax - correct answers C
If Mexico is running a large current account deficit with Canada, which of the
following will most likely occur?
A Canada will reduce its imports from Mexico
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