CFA-Level-I Free Certification Exam Easy to Download PDF Format 2022
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The price of the CFA Level 1 exam is $700. For more information related to exam price, please visit the official website CFA Website as the cost of exams may be subject to vary county-wise. Our CFA Level 1 pdf exam dumps include answers of questions that are similar of the true CFA Level 1 exam.
NEW QUESTION 819
According the Standard of professional conduct on Fair Dealing, which of the following practices will assist in fair treatment of ALL clients in disseminating information once a recommendation has been changed.
I). Limit the number of people involved who know about the change in recommendation before it is disseminated.
II). Lengthen the time frame from decision to dissemination of the change.
III). Publish personnel guidelines for pre-dissemination.
IV). Establish control over trading activity.
- A. I and IV only.
- B. I, III, and IV only.
- C. All of the above.
Answer: B
Explanation:
Members should shorten the time frame from decision to dissemination.
NEW QUESTION 820
Dave Jones is a compliance officer at a large brokerage house. As part of his job description he is required to put in place procedures to ensure that all trades are allocated fairly and accurately, and in a timely and efficient manner. In terms of CFA Institute's Standards of Professional Conduct per Standard:
Fair Dealing, what are some of the factors that he will need to consider?
I). All orders should be in writing and the date stamped on them.
II). Orders should be processed on a first-in, first-out basis.
III). All clients in a block should be given the same execution price.
IV). Establish procedures for determining material change in opinions.
- A. I, II and III only.
- B. I and III only.
- C. All of the above.
Answer: A
Explanation:
Establishing procedures for determining material change in opinions is not a specific procedure to ensure that all trades are allocated fairly and accurately, and in a timely and efficient manner.
NEW QUESTION 821
Refer to the graph below. Assuming a consumer has $5 to spend, if a soda costs $0.50 and a chocolate bar costs $0.50, the consumer would optimally choose to consume:
- A. at point B
- B. 10 cans of soda and 0 chocolate bars.
- C. at point A
Answer: A
Explanation:
With $5, the maximum number of chocolate bars or cans of soda that can be bought are 10 and 10 respectively. To maximize utility, find where the maximum utility curve is tangent to this income constraint.
NEW QUESTION 822
Robert Haley has "CFA Level 2" on his business cards. He has passed the Level 2 examination and is registered for the Level 3 examination to be given next June.
- A. He has not violated the Standards.
- B. He has violated the Standards because the designation "CFA" is not allowed on business cards.
- C. He has violated the Standards because he is only aCFA candidate.
Answer: C
NEW QUESTION 823
Keith Company incurred the following costs in 2002:
Merchandise purchased for resale: $20,000 Sales commissions: 4,000 Interest on accounts payable:
1 ,000 Freight in 500
How much should be included in the cost of merchandise inventory?
- A. $20,500
- B. $21,000
- C. $20,000
Answer: A
Explanation:
Cost of inventory includes material purchase costs and incidental costs. Incidental costs include freight charges. Therefore, inventory cost is material purchase costs of $20,000 plus freight charges of $500.
NEW QUESTION 824
Susan Co. had 300,000 common shares issued and outstanding at December 31, 2001. No common shares were issued during 2002. On January 1, 2002, Susan issued 200,000 nonconvertible preferred shares. During 2002, Susan declared and paid $100,000 cash dividends on the common shares and
$ 80,000 on the preferred shares. Net income for the year ended December 31, 2002 was $620,000. What should be Susan's 2002 earnings per common share?
- A. $2.07
- B. $1.73
- C. $1.80
Answer: C
Explanation:
($620,000-$80,000)/300,000=$1.80
NEW QUESTION 825
The comparative sales approach is not well suited for estimating the market value of:
- A. a custom lake cabin with log construction built by the owner in an isolated rural area
- B. a single-family home in northern California where property values have increased rapidly in the past decade
- C. a single-family home in a traditional suburban residential setting
Answer: A
Explanation:
The comparative sales approach would be the most difficult to apply to the remote custom built cabin. The comparative sales approach relies on finding recent sales of properties of similar nature.
In an isolated rural area, sales take place relatively infrequently. Add to this problem the fact that the improvements to the property are unique. It would likely be difficult to find a recent sale that would be comparable.
NEW QUESTION 826
"Material" in the phrase "material non-public information" refers to information that:
- A. is arrived at through discussions with a special friend that works at the company.
- B. is arrived at through discussions with senior management of a company.
- C. a normal investor would consider important in making his investment decision.
Answer: C
Explanation:
Information is material if its disclosure would be likely to have an impact on the price of the security, OR if the reasonable investor would want to know the information prior to making the investment decision.
NEW QUESTION 827
Lionel Lir is an analyst at a large brokerage house. He has just found out that company JHT is planning to buy company TYP, and is planning to pay a large premium to the current price. He immediately purchases a large block of TYP stock for himself as well as for other select clients. Which standards of professional conduct has Lionel violated?
- A. Lionel has violated the standards since he should have informed all the firm's clients of the information he had in his possession.
- B. Lionel has not violated the standards since the deal may not actually go through.
- C. Lionel has violated the standard of fair dealing.
Answer: C
Explanation:
Any recommendation made by the member must be disseminated in such a manner that all clients have a fair opportunity to act on the information.
NEW QUESTION 828
In the case of an inferior good with a decrease in own price, which of the following statements is most likely true?
- A. Both the substitution and income effects lead to an increase in the quantity purchased.
- B. The substitution effect leads to an increase in the quantity purchased, while the income effect leads to a decrease.
- C. The income effect leads to an increase in the quantity purchased, while the substitution effect leads to a decrease.
Answer: B
Explanation:
The substitution effect overwhelms the income effect, leading to an overall effect of increased quantity purchased.
NEW QUESTION 829
Hilary Waters, a CFA charterholder, is an investment analyst who has accumulated several pieces of nonpublic information through her contacts with drug firms. Although none of the information is material,
Waters correctly concluded by analyzing the nonpublic information that the earnings of one of the drug firms would be unexpectedly high in the coming year. Under current US law, Waters:
- A. can use the information to make investment recommendations and decisions.
- B. may use the information, but only after approval from a compliance officer or supervisory analyst attesting to its non-materiality.
- C. cannot legally invest or make investment recommendations based on this information.
Answer: A
NEW QUESTION 830
If a major magazine contained a review of your restaurant saying it was the best in the Midwest, which of the following would most likely happen?
- A. quantity demanded would increase.
- B. demand would increase.
- C. quantity demanded would drop.
Answer: B
Explanation:
Anything that affects demand other than price will result in a shift in demand. In this case price has not changed. At each price, more of your restaurant services would be demanded; demand would increase.
NEW QUESTION 831
A firm should accept a project if _________, according to the NPV rule.
- A. the NPV is negative but the IRR is positive
- B. the estimated NPV exceeds the project's cost, indicating that the project has more than recaptured its initial cost in terms of net income
- C. the estimated NPV is positive
Answer: C
NEW QUESTION 832
Which of the following is NOT a characteristic of a typical venture capital (VC) fund?
- A. Long-term nature and difficulty in valuation of portfolio companies.
- B. Existence of time cycles in availability of VC capital.
- C. Ease of liquidation due to a ready market for mergers and acquisitions.
Answer: C
Explanation:
VC funds do not have ease of liquidity when exiting an investment.
NEW QUESTION 833
Worldwide Enterprises (a U.S. company) wishes, over the next five years, to establish operations in
Great Britain. Worldwide has signed a contract with a British construction company. The contract requires annual payments of 250,000 pounds for each of the next 5 years. Worldwide will use U.S. revenues to make the contract payments. As the exchange rate between U.S. dollars and British pounds fluctuates:
I). the number of dollars necessary to purchase 250,000 pounds may increase
II). the number of dollars necessary to purchase 250,000 pounds may decrease
III). the number of dollars necessary to purchase 250,000 pounds may remain unchanged
- A. I, II and III.
- B. I and III.
- C. I and II.
Answer: A
Explanation:
Changes in the exchange rate between U.S. dollars and British pounds will determine the number of dollars necessary to purchase 250,000 pounds.
NEW QUESTION 834
The more perfectly the monopoly can price discriminate,
- A. the farther its output gets from the competitive output and the less efficient is the outcome.
- B. the closer its output gets to the competitive output and the more efficient is the outcome.
- C. the farther its output gets from the competitive output and the more efficient is the outcome.
Answer: B
Explanation:
The more perfectly a monopoly can price discriminate, the closer its output gets to the competitive output (P = MC) and the more efficient is the outcome.
NEW QUESTION 835
Assuming that you believe a particular company has internally-generated goodwill, which of the following costs would you capitalize and then amortize over their estimated useful lives?
- A. internally-generated goodwill should never be capitalized
- B. both the costs of maintaining and restoring the goodwill
- C. the cost of maintaining the goodwill
Answer: A
Explanation:
The only way that goodwill can be capitalized is when it is purchased as part of a company. It is the excess of the price paid for the business over the market value of its net assets.
NEW QUESTION 836
What does the term "1/10, net 45" mean?
- A. a 1% discount is permitted if payment is made within 10 days.
- B. a 10% discount is permitted if payment is made within 45 days.
- C. a 1% discount is permitted if payment is made within 45 days.
Answer: A
Explanation:
The format of trade terms indicates the discount available, 1%, the number of days that the discount can be taken, 10, and that the full payment (without any discount) is due no later than 45 days.
NEW QUESTION 837
The mean return in 1999 for a stock mutual fund of large companies was 7.2% with and the mean return for a risk-free bond was 1.0 %. If the Sharpe measure for the mutual fund is 0.50, what is the standard deviation or risk of the stock mutual fund?
- A. 12.4
- B. 16.4
- C. 3.2
Answer: A
Explanation:
(7.2 - 1 ) / 0.5 = 12.4
NEW QUESTION 838
A recent increase in the supply of oranges caused the price to drop from $5 to $2.50 per bushel and quantity demanded to rise from 10,000 bushels to 20,000 bushels. This indicates that the price elasticity of demand for oranges in this price range is
- A. 0
- B. 1
- C. -0.5
Answer: A
Explanation:
Price elasticity is found by solving the following equation: Percent change in quantity demanded/Percent change in price: [(10,000-20,000)/(20,000+10,000)] / [(5-2.50)/(5+2.5)] = -1.
NEW QUESTION 839
The examination of the statistical association between stock prices and earnings of many firms at a single point of time is an example of a:
- A. time-series analysis
- B. common-size financial statement analysis
- C. cross-sectional test
Answer: C
Explanation:
This test uses regression analysis to examine the relationship between stock prices and earnings across many firms at a single point in time.
NEW QUESTION 840
An investor is currently considering the choice between a corporate and a municipal bond. The yield on these two bonds is given below.
Securities: Yield 10-year corporate bond: 6.43 10-year municipal bond: 5.20
The investor's marginal tax rate is 28%. What is the taxable equivalent yield on municipal bond?
- A. 5.1
- B. 6.66
- C. 7.22
Answer: C
Explanation:
Taxable equivalent yield = Tax-exempt yield/(1 - marginal tax rate) = 5.2/(1 - 0.28) = 7.22
NEW QUESTION 841
Which statement is FALSE?
- A. The welfare loss suffered by the importing country is generally greater with a quota than with an import tariff.
- B. A VER has the same impact on the importing country as an import quota.
- C. The welfare loss caused by an export subsidy is greater for a small country than for a large country.
Answer: C
Explanation:
A is true - The tax revenue that would be raised by the equivalent tariff is instead captured by foreign producers as quota rents.
B is also true - In both cases foreign producers capture all of the quota rents.
C is false - In the large country case, the world price declines as the large country increases exports. The decline in world prices implies that a part of the subsidy is transferred from large country to the foreign country.
NEW QUESTION 842
______ are effectively a form of equity.
- A. Neither temporary deferred taxes nor permanent deferred taxes
- B. Permanent deferred taxes, not temporary deferred taxes,
- C. Temporary deferred taxes, not permanent deferred taxes,
Answer: B
Explanation:
When deferred taxes are permanent (not expected to reverse), they effectively serve as a form of equity reserve account.
NEW QUESTION 843
When the average product is greater than the marginal product, then the average product is
- A. falling.
- B. not changing.
- C. rising.
Answer: A
NEW QUESTION 844
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