» CFA 1 – 10 questions

To determine the impact of changes in exchange rates on trade balance, the ‘absorption approach’ most likely exhibits the:

effect of exchange rates on aggregate expenditure or saving decisions.

effect of changing the relative price of domestic and foreign goods.

microeconomic view of the relationship between exchange rates and trade balance.

Generating sufficient income and maintaining the real capital value of the fund are most likely the objectives of:

investment companies.

university endowments.

insurance companies.

Which of the following statements is most accurate?

The Ricardian model would attribute differences in comparative advantage to differences in factor endowments.

The Hecksher-Ohlin model attributes differences in comparative advantage to differences in labor productivity.

The Ricardian model would attribute differences in comparative advantage to differences in labor productivity.

Which of the following statements is most likely correct regarding the major sections of GIPS standards?

According to section 5 ‘Presentation and Reporting’, firms cannot include in GIPS-compliant presentations information not addressed by the GIPS standards.

According to Section 4 ‘Disclosures’, firms are required to make negative assurance disclosures.

According to Section 3’Composite Construction’, a composite return is the asset weighted average of the performance of all portfolios in the composite.

Which of the following would most accurately be considered a primary source of liquidity?

Selling equipment

Restructuring debt obligations

Money market account

For a normal random variable approximately 68% of all outcomes fall within:

one standard deviation of the mean.

two standard deviations of the mean.

three standard deviation of the mean.

Which fo the following best describes a stockholder's claim to a company's assets under bankruptcy?

Residual claim

No claim

First claim

Which of the following is least accurately considered a firm's factor of production?

Materials

Customers

Land

Under U.S. GAAP at the end of year 1, EBB would recognize $0 revenue, $0 cost of construction and $0 income. The $26 million expenditure would be recorded as an increase in inventory account and decrease in cash (if EBB paid cash for all expenditures).

debt-to-equity.

Total assets.

Cash outflows from operations.

The intercept of security characteristic line (SCL) is:

RM–RF.

Beta.

Jensen’s alpha.

CFA 1 - 10 Questions