QUESTION NO: 1
In terms of CFA Institute's Standards of Professional Conduct when dealing with the purpose and scope of Standard V(A): Diligence and Reasonable Basis, which of the following statements are correct?
I). Members must establish a reasonable basis for all investment recommendations and actions.
II). This standard is meant to address only the member-client relationship.
III). Diligence must be exercised to avoid any material misrepresentation.
IV). Records and documentation must be maintained in order to support the investment recommendations and actions.
In terms of CFA Institute's Standards of Professional Conduct when dealing with the purpose and scope of Standard V(A): Diligence and Reasonable Basis, which of the following statements are correct?
I). Members must establish a reasonable basis for all investment recommendations and actions.
II). This standard is meant to address only the member-client relationship.
III). Diligence must be exercised to avoid any material misrepresentation.
IV). Records and documentation must be maintained in order to support the investment recommendations and actions.
Correct Answer: B
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QUESTION NO: 2
A firm using the LIFO inventory valuation method in an inflationary environment will have _________ profit margins and ________ inventory turnover compared to a firm using FIFO.
A firm using the LIFO inventory valuation method in an inflationary environment will have _________ profit margins and ________ inventory turnover compared to a firm using FIFO.
Correct Answer: C
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QUESTION NO: 3
The probability that a mutual fund will generate a positive return in the next 12 months is called:
The probability that a mutual fund will generate a positive return in the next 12 months is called:
Correct Answer: A
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QUESTION NO: 4
Olivia Hernandez's clients have substantial holdings of US consumer goods manufacturer PXG Ltd.
PXG has sales primarily in North America and Europe. Hernandez reviews research reports about the dollars euro exchange rate, which mostly predict that the dollar will get more expensive thus hurting
PXG's exports to Europe . She speaks with representatives of PXG and visits PXG factories where she meets production managers. Finally she visits retailers where she learns that over the last month many customers have expressed their dissatisfaction with PXG products. After reviewing her information,
Hernandez sells her clients' PXG holdings.
Olivia Hernandez's clients have substantial holdings of US consumer goods manufacturer PXG Ltd.
PXG has sales primarily in North America and Europe. Hernandez reviews research reports about the dollars euro exchange rate, which mostly predict that the dollar will get more expensive thus hurting
PXG's exports to Europe . She speaks with representatives of PXG and visits PXG factories where she meets production managers. Finally she visits retailers where she learns that over the last month many customers have expressed their dissatisfaction with PXG products. After reviewing her information,
Hernandez sells her clients' PXG holdings.
Correct Answer: C
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QUESTION NO: 5
Which statement is true?
I). Companies try to get funding for their projects as all of them are worth funding.
II). In financial markets savers determine which projects obtain capital and which projects don't.
Which statement is true?
I). Companies try to get funding for their projects as all of them are worth funding.
II). In financial markets savers determine which projects obtain capital and which projects don't.
Correct Answer: B
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QUESTION NO: 6
In calculating earnings per share, the equivalent number of convertible preferred shares are added as an adjustment to the denominator (number of shares outstanding). If the preferred shares are cumulative, which amount should then be added as an adjustment to the numerator (net earnings)?
In calculating earnings per share, the equivalent number of convertible preferred shares are added as an adjustment to the denominator (number of shares outstanding). If the preferred shares are cumulative, which amount should then be added as an adjustment to the numerator (net earnings)?
Correct Answer: C
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QUESTION NO: 7
In a monopolistic competition,
In a monopolistic competition,
Correct Answer: B
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QUESTION NO: 8
What would be bid-ask spread be for pound sterling quoted at $=1.4419-28?
What would be bid-ask spread be for pound sterling quoted at $=1.4419-28?
Correct Answer: A
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QUESTION NO: 9
A manufacturer of headache medicine claims it is 70 percent effective within a few minutes. That is, out of every 100 users 70 get relief within a few minutes. A group of 12 patients are given the medicine. If the claim is true, what is the probability that 8 have relief within a few minutes?
A manufacturer of headache medicine claims it is 70 percent effective within a few minutes. That is, out of every 100 users 70 get relief within a few minutes. A group of 12 patients are given the medicine. If the claim is true, what is the probability that 8 have relief within a few minutes?
Correct Answer: C
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QUESTION NO: 10
Jumbo, Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 in
January, $12,000 in February, and $8,000 in March. The firm's COGS in any given month is equal to 70% of the next month's sales. The firm collects its receivables in 60 days and pays its payables in 30 days.
The firm begins January 1 with $10,000 in cash. All sales and purchases are on credit. There are no other costs or revenues. What is Jumbo's cash balance at the end of January? Assume there are 30 days in every month.
Jumbo, Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 in
January, $12,000 in February, and $8,000 in March. The firm's COGS in any given month is equal to 70% of the next month's sales. The firm collects its receivables in 60 days and pays its payables in 30 days.
The firm begins January 1 with $10,000 in cash. All sales and purchases are on credit. There are no other costs or revenues. What is Jumbo's cash balance at the end of January? Assume there are 30 days in every month.
Correct Answer: B
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QUESTION NO: 11
Because of the timing lags involved, fiscal policy can be:
Because of the timing lags involved, fiscal policy can be:
Correct Answer: B
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QUESTION NO: 12
Consider a cyclical industry in which many firms are not profitable. These firms have operations in many countries such as the US, Germany, Brazil and China. Which valuation method is the most appropriate one to compare these companies in the industry?
Consider a cyclical industry in which many firms are not profitable. These firms have operations in many countries such as the US, Germany, Brazil and China. Which valuation method is the most appropriate one to compare these companies in the industry?
Correct Answer: A
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QUESTION NO: 13
Assume there are six firms in an industry. Firm A, B, C, D and E each has 15% market shares, respectively. Firm F has a share of 25%. Now that firm A is going to merge with firm C.
What would be the increase in the HHI as a result of the merger?
Assume there are six firms in an industry. Firm A, B, C, D and E each has 15% market shares, respectively. Firm F has a share of 25%. Now that firm A is going to merge with firm C.
What would be the increase in the HHI as a result of the merger?
Correct Answer: A
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QUESTION NO: 14
If a firm's average per-unit costs fall as it produces a larger output, then
If a firm's average per-unit costs fall as it produces a larger output, then
Correct Answer: C
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QUESTION NO: 15
The Z-spread is different from the nominal spread because
The Z-spread is different from the nominal spread because
Correct Answer: B
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