CFA Chartered Financial Analyst Economics Questions with 100% Correct Answers Complete Package

Financial Statement Analysis Framework Correct Answer provides an overview of the methodology used by analysts to consistently analyze financial statements 1. articulate the purpose and context of analysis 2. collecting data 3. process the data 4. analyzing and interpreting the processed data ...

Faithful representation, substance over form, prudence, neutrality, completeness Correct Answer According to the IFRS what are the 5 qualities of financial information that improve reliability Costs can be reliably measured Correct Answer According to IFRS what condition must be met for revenue r...

Current Ratio Correct Answer Current Assets divided by current liabilities Quick Ratio Correct Answer Cash plus marketable securities plus receivables divided by current liabilities Cash Ratio Correct Answer Cash plus marketable securities divided by current liabilities Defensive Interval R...

Default Risk Correct Answer Risk that a borrower will not make promised payments Liquidity Risk Correct Answer Risk of recieving less than fair value for an investment if it must be sold for cash quickly Required Interest Rate on A Security Correct Answer = Nominal Interest Rate + Default Ris...

In situations where the laws of a member or candidate's country of residence, the local laws of regions where the member or candidate does business, and the Code and Standards specify different requirements, the member or candidate must abide by: A. local law or the Code and Standards, whicheve...

Price change based on convexity Correct Answer -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration Correct Answer Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration Correct Answer [(v-)-(v+)]/[2V0(change in yield)] Futur...

Nominal risk free rate equals... Correct answer real risk free rate + expected inflation Required interest rate on a security correct answer nominal risk free rate + default risk premium + liquidity premium + maturity risk premium Ear or apy correct answer (1+periodic rate)^m - 1 Always hig...

Price Elasticity of Demand Formula Correct Answer (% Change in Quantity Demanded) / (%t Change in Price) Cross Elasticity of Demand Formula Correct Answer (% Change in Quantity Demanded) / (% Change in Price of Substitute or Complement) Income Elasticity of Demand Formula Correct Answer (% Cha...

Money multiplier Correct Answer 1/reserve requirement Macroeconomic equilibrium Correct Answer where the IS and LM curves intersect. IS curve shows equilibrium between income and expenditure. LM curve shows equilibrium between the real money supply and the real interest rate M/P Correct Answer...

Product Markets (Goods Markets) Correct Answer Markets for goods and services to consumers Factor Markets Correct Answer Markets for factors of production (raw material, goods and services used in production) Intermediate Goods Correct Answer Good and services used in the production of final g...

Economics Correct Answer - The study of production, distribution and consumption of goods and services - The principles of the allocation of scarce resources among competing uses - Can be divided into two broad areas of study: micro and macro Macroeconomics Correct Answer - The branch of econom...

Types of markets Correct Answer Factor markets = markets for factors of production (land, labor, capital), firms purchase services of factors of production (labor) from households and transform those services into intermediate and final goods and services. Goods markets = markets for the output p...