CFA 1 - 25 Questions
Which of the following statements is least likely accurate?
Eleanor Chavez, CFA is a senior analyst at W&W Securities (W&WS) and is responsible for managing the High Beta Mutual Fund (HBMF). Curtis Fowler, aged 56 and dependent on his portfolio returns, is W&WS’s client. His portfolio will now be managed by Chavez, who has been asked to invest 20% of his portfolio funds in HBMF. Chavez fills the request forms and immediately purchases shares of HBMF for Fowler. Is Chavez in compliance with codes and standards, and if not, what should be the recommended course of action for Chavez?
Which of the following is least likely a characteristic of open-ended mutual funds?
Which of the following is most accurately considered a systematic risk?
After 5-years of service with Jacob Securities as a financial planner, Shane Alvarado planned to start his own practice in his hometown. He informed his employer through email three days before starting his independent practice. The employer was on a business trip for a week and on his return he accepted his resignation. Alvarado always maintained his personal records related to training programs that he conducted at Jacob Securities, and he used that material in his new project. Alvarado:
Reginald Fuller manages institutional portfolios on behalf of BDY Advisors. Fuller also manages an account of a trust company named SOTO Trust. The trust offered Fuller a $50,000 cash gift if he succeeded in achieving a 20% return this year. The best practice for Fuller includes:
Which of the following is considered to be best practice from shareowners’ perspective?
You are testing the hypothesis that the equity risk premium is equal to 2.5%. Which of the following is the most appropriate alternative hypothesis?
What is the most likely result of a decrease in the risk-free rate of return on put and call option prices?
The joint probability of events A and B is 32 percent with the probability of event A being 60 percent and the probability of event B being 50 percent. Based on this information, the conditional probability of event A given event B has occurred is closest to:
Michael recently purchased a new sedan. He then acquired insurance to protect against loss due to accident, nature, failure, or theft. Because the vehicle was insured, Michael didn't bother locking the doors, and the car was soon stolen. This is an example of what insurance problem?
Flotation costs are those costs which are incurred by a company during the process of raising additional capital. The value of these flotation costs is typically related to the amount and type of capital being raised. Which of the following statements is least likely accurate regarding flotation costs? 2
An investor purchases a 2-year zero-coupon bond with par value of $1,000 at $960. The implied interest earned on the bond is closest to:
A financial intermediary buys a stock and then resells it a few days later at a higher price. Which intermediary would this most likely describe?
Which statement most accurately describes risk transfer and risk shifting?
How does the oil the industry most likely maintain a premium pricing strategy?
Which of the following statements is most likely correct regarding Global Investment Performance Standards' compliance requirements?
Which of the following statements is/are accurate regarding the common-size analysis of financial statements? I. A vertical common-size balance sheet presents all the line items as a percentage of total assets. II. A vertical common-size income statement presents all the line items as a percentage of net income. III. A horizontal common-size income statement calculates all line items as a percentage of the base year's income statement.
In which of the following circumstances can a producer of agricultural products value the product at the net realizable value (NRV)?
For venture capital investing, later stage financing is the capital provided for a company:
Which of the following statements regarding the Markowitz efficient frontier is least likely to be correct? The optimal portfolio for:
A high yield bond issuer has offered the ‘change of control put’ to its bondholders. Under this covenant in the event of acquisition, the bondholder has a (n):
An equity analyst working for a growth oriented mutual fund has a tendency to misvalue the stocks of popular companies that she has previously recommended and the fund already owns. Her behavior is most likely consistent with which of the following biases?
Which of the following is a leading economic index?
The optimal capital budget occurs at the intersection of:
CFA 1 - 25 Questions
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