Exam (elaborations)
CFA 4 QUESTIONS AND ANSWERS 2024
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Exam of 8 pages for the course CFA at CFA (CFA 4)
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CFA 4if you were fired from a previous job and fail to tell your new employer is that a violation
and if so of what? - answer yes, misconduct. this information could potentially harm your
new employer and he needs to know man!
digress of price discrimination - answer1st degree-- know price that every consumer is
willing to pay. 2nd degree-- price varies according to quantity demanded. sellers aren't
able to distinguish classes or consumers. third degree-- charging different prices to
different consumer groups. charging kids and adults differently. peak and off peak rates
for electricity.
disposition bias - answer loss aversion
if you get offered a senior position with a new department at a bank that has bad
compliance procedures and/or bad marketing materials what should you do? - answer
not accept the position. possibly agree to be hired as an interim consultant until proper
procedures are taken.
why would a multinational financial services holding company be unlikely to be able to
claim GIPS compliance? - answerGIPS standards require that firms be defined as an
investment firm, subsidiary, or division held out to clients as a distinct business entity.
multinational finance firm unlikely to be operating solely as an investment firm.
to claim compliance with GIPS, who do you have to make a reasonable effort to provide
a compliant presentation to? - answerprospective investors only. it is reccomended to
do so also for existing investors, but you don't have too.
the primary monetary goal of most major central banks is... - answermaintaining price
stability. is it though??
a motor scooter rental shop charges $90 per day. owner is considering a Wed special of
75 per day. at current price, shop rents 40 scooters and expects rentals to increase to
60 at lower price. - answer$45. Change in TR/Change in quantity.
This is technically incorrect!!!!!
deadweight loss problems from price ceilings/floors - answerdraw it out and think of lost
surplus to identify...
how is a building owned for the purpose of leasing out to tenants treated by under IFRS
- answeras an investment property, can be reported at either cost or fair value. only
, prior losses that are reversed are shown as profit in income statement. gains above
prior value are recorded in shareholders equity.
under IFRS, how are deferred tax liabilities and warranties classified as current or non-
current - answerDTL are non-current and warranties are current.
income tax expense equals... - answerincome tax payable (income tax rate times by
taxable income) plus increase in deferred tax liabilities. look at 174.
redo #179. repeat #237 and 238!! - answer
Elliot Wave Theory - answerwave 1 is a large gain, wave 2 gives back much of gains
from Wave 1, but not all. the lost proportion is usually a percentage equal to a
fibonaccci ratio, and consists of three smaller waves.
three main sources of return for a commodities future contract... - answer1. collateral
yield, roll yield, and spot price return. i think the reason why convience yield isn't
factored in is that it probably doesn't change very much...
can early exercise of deep in the money american call be advantageous -
answerapparently not. remember early exercise of call's can be good if it has cashflows
like dividends etc.
if future prices and interest rates are negatively correlated.. - answerthe forwards will be
more desirable than futures (for long positions)
the voting rights of an unsponsored depository receipt belong to the... -
answerdepository bank.
be able to estimate value of stock using forward P/E!!!! - answer
a bond with the greatest reinvestment risk out of one selling at a premium/discount/par -
answerpremium.... has the highest coupon rate and therefore highest risk of not being
able to reinvest at that rate...
CAPM assumes that investors plan for the same single holding period!! - answer
having a higher risk aversion coefficient means... - answeryou have a lower risk
tolerance!
how do you solve for the macaulay duration of a non-callable perpetual bond with a
yield in perpetuity? - answer(1+r)/r
justified forward P/E ratio - answerdividend payout ratio/(r-g)
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