» CFA 1 – 10 questions

A recently issued sovereign bond for a given maturity is also referred to as:

floating issue.

benchmark issue.

of the run issue.

A stock index representing U.S. manufacturing would most accurately be described as a:

Examining investor biases

sector index.

Data mining

According to European Central Bank (ECB), debt securities with a maturity of up to two years are part of which of the following aggregate categories of money?

M1

M2

M3

Which of the following is the most accurate description of the defensive interval ratio?

The defensive interval ratio measures the duration for which the daily cash requirements of a period can be met from the existing liquid assets.

The defensive interval ratio measures the duration for which the daily cash requirements can be met from the current assets.

The defensive interval ratio measures the duration for which the daily cash requirements of a period can be met from the expected liquid assets at the end of the period.

A real estate appraiser is estimating the value of a real estate investment trust (REIT) which is composed of a portfolio of real estate properties. The appraiser begins the process by adjusting net income for depreciation charges and gains and losses from sales of real estate property. The resulting amount is capitalized into a value using a cap rate. The approach being used by the appraiser is most likely classified as a/an:

direct capitalization approach.

asset-based approach.

income-based approach.

Clayton Hamner, CFA, an independent equity analyst, produces research reports and recommendations for his 25 high net worth clients, all of whom have been informed of the different levels of services available to them. Recently, Hamner distributed his latest report on Acton Pharmaceuticals (APH) in an email that was sent simultaneously to the 18 clients who either currently hold APH shares or for whom this investment is suitable. After sending that email, Hamner followed up with seven of those clients, all of whom pay for premium service, to discuss his report in greater detail. Of those calls, Hamner's first is to his sister, whose account generates a significant share of his income. Has Hamner most likely violated the Standards?

No

Yes, by not disseminating his report to all clients

Yes, by calling his sister before calling other clients

What is most likely the definition of a Special Purpose Vehicle (SPV)?

A type of asset-backed security that is secured by a mortgage or collection of mortgages.

A subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.

A structured financial product that pools together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors.

The current ratio and quick ratio are most appropriately used to assess what characteristic of a company?

Growth potential

Liquidity

Solvency

Smith owns 500 shares of Wood Craft Inc. and the firm is going to elect 10 board directors. Under statutory voting Smith can cast:

a maximum of 500 votes only for each member of board.

5,000 votes and can spread them across candidates in any proportion.

500 votes to members in any desired proportion.

Which of the following statements is most accurate? Unlike depreciation, amortization is only used to reduce the carrying amount of: intangible assets.

intangible assets.

assets with no residual value.

assets with indefinite useful lives.

CFA 1 - 10 Questions