CFA-Level-I Exam Questions Get Updated [2021] with Correct Answers
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CFA CFA-Level-I: CFA Institute CFA Level I Chartered Financial Analyst Certification Path
In the CFA Level 1 test, the candidates can gain results with CFA Level 1 exam dumps pdf. Candidates will find in the Qualification Issues Forum what they are searching for. If the applicant fully practises these queries, he will comfortably deal with his exam. When they memorize them, they get a sense of the real test. Applicants should recognise all measures a candidate should provide in order to pass the CFA Level 1 Exam Qualification. Candidates are only a few steps away from the performance. So if the candidates schedule our CFA level 1 dumps, they will realise their dream. Be one with your calculator. You must understand how to use the calculator features that are used to answer the learning outcomes (LOS).Examination issues relating to financial reporting and analysis (FRA) are focused, as otherwise defined, on International Financial Reporting Standards (IFRS). When an issue is focused on the U.S. GAAP, the question is specified. Answer all queries. Answer all the questions. There is no punishment for wrong responses. Comfortably dressed up. There is no dress code, but laid-back attire is encouraged.Calm shoes are a bonus. CFA Level 1 practice exams is the best start towards understanding the concepts of examination.
NEW QUESTION 875
What part of the annual report contains forward looking information?
- A. management discussion and analysis
- B. auditor's report
- C. balance sheet and income statement
Answer: A
Explanation:
The management discussion and analysis presents management's detailed analysis of the company's liquidity, capital resources, and operations. It includes forward looking information such as projections of capital expenditures and how the company plans to finance such expenditures.
NEW QUESTION 876
Which of the following statements is (are) true with respect to the nature of bonds?
I). For premium bonds, its yield to maturity is always lower than its current yield.
II). For discount bonds, the duration equals the maturity of the bond.
III). Since longer term interest rates are more stable than shorter term interest rates, longer term bonds are less price sensitive than shorter term bonds.
IV). Not even U.S. government bonds are immune from interest rate risk.
- A. I, II, III and IV.
- B. II and III.
- C. I and IV.
Answer: C
Explanation:
I is true: the reason a bond trades above par is because it is paying a coupon rate that is greater than what the market requires (which is represented through yield to maturity).
II is incorrect because the only instance where the bond duration equals its maturity is if the bond is a zero coupon bond, an extreme form of a discount bond.
NEW QUESTION 877
Credit spread risk can be described as the risk that the price of a bond will
- A. decline due to an increase in the credit spread.
- B. decline due to a decrease in the credit spread.
- C. rise due to a decrease in the credit spread.
Answer: A
NEW QUESTION 878
Consider two bonds, A and B.
They are both issued by the same corporate firm. They both have the
same maturity, seniority, and coupon. The only difference between the two bonds is that A is callable and
B is not. Which of the following most likely best describe the relationship between A and B
- A. Bond A will have a higher yield than bond B
- B. Bond A will have a lower yield than bond B
- C. Bond B will have a lower price than bond A
Answer: A
Explanation:
Both bonds are identical except of the cal option embedded in bond A.
The option is granted
to the issuer by the investors. As compensation, the investors receive a higher yield.
NEW QUESTION 879
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
1 0-year municipal bond: 5.20
The investor's marginal tax rate is 28%. Which bond provides a higher after-tax yield for this individual investor?
- A. municipal bond
- B. both bonds provide similar return
- C. corporate bond
Answer: A
NEW QUESTION 880
Which best describes venture capital?
- A. Venture capital is financing for privately held companies, typically in the form of equity and/or long-term debt.
- B. Venture capital is in the form of equity.
- C. Venture capital is typically a secondary form of financing, after bank financing.
Answer: A
Explanation:
Venture capital becomes available when financing from banks and public debt or equity markets is either unavailable or inappropriate.
NEW QUESTION 881
The ________ of the investor is (are) his or her investment goals, expressed in terms of both risk and return.
- A. constraints
- B. objectives
- C. policy statement
Answer: B
Explanation:
A careful analysis of the client's risk tolerance should precede any discussion of return objectives.
NEW QUESTION 882
Which of the following issues does a policy statement not address?
- A. Additional capital or income sources available to the investor.
- B. Existing knowledge that the investor has in investments and capital markets.
- C. Emotional reactions and risks to a positive financial outcome.
Answer: C
Explanation:
The policy statement does not worry about the emotional reactions or risks related to exceptional or strong performance (the investor should be so lucky!). The policy statement should address the following issues:
What are the risks of an adverse financial outcome?What are the emotional reactions to an adverse financial outcome?How knowledgeable is the investor to investments and markets?What other capital or income sources does the investor have? How important is the portfolio to the overall financial position?What legal restrictions may affect the investment needs?What unanticipated consequences of interim fluctuations in portfolio value may affect investment policy?
NEW QUESTION 883
The Central Limit Theorem states that the sampling distribution of sample means is
I). normal, regardless of the sample size
II). normal, regardless of the population distribution
III). normal if the population is normal
IV). approximately normal if samples of size 30 or more are taken
- A. II and IV.
- B. I and II.
- C. III and IV.
Answer: A
Explanation:
No matter what the shape of the original distribution, x-bar approaches a normal distribution as the sample size increases.
NEW QUESTION 884
The following figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from a decrease in the price of soda. What change in quantity best represents his substitution effect?
- A. 0
- B. 1
- C. 2
Answer: A
Explanation:
18 - 15= 3.
NEW QUESTION 885
Which organization provides funds for a wide range of projects in developing countries worldwide and financial and technical expertise aimed at helping these countries reduce poverty?
- A. International Monetary Fund.
- B. World Trade Organization.
- C. World Bank.
Answer: C
Explanation:
Its main objective is to help countries fight poverty and enhance environmentally sound economic growth.
NEW QUESTION 886
The Capital Market Line:
- A. leads all investors to invest in the same risky asset portfolio, which is the market portfolio.
- B. considers the opportunity to borrow but not lend at the risk-free rate.
- C. contains no portfolio involving the risk-free asset.
Answer: A
Explanation:
The Capital Market Line (CML) portrays an equilibrium in which all investors hold the same risky asset portfolio, which is the market. Different risk preferences are accommodated through the borrowing /lending decision.
NEW QUESTION 887
Two sets of observations, A and B, each contain 160 observations. The variance of data in A equals
198.4 and that of the data in B equals 231.9. The two sets have the same mean. Then, A has a ______ dispersion and a ______ coefficient of variation.
- A. lower; lower
- B. higher; lower
- C. lower; higher
Answer: A
Explanation:
The coefficient of variation equals the standard deviation divided by the mean. Since A and
B have the same mean, B has a higher coefficient of variation.
NEW QUESTION 888
A contract places an obligation on a trader to sell a security at a fixed price to the other party on or before a specified date at the discretion of the latter. This is a
- A. forward contract or futures contract
- B. call option
- C. put option
Answer: B
Explanation:
An option is an obligation on the part of the writer. If the holder of a call option decides to exercise the option, the writer is obligated to sell the underlying at the fixed price, irrespective of the price of the underlying in the market.
NEW QUESTION 889
If the one month exchange rate $:E(EUR) is 0.7928-30, this implies:
- A. the bank is willing to commit itself today to buy dollars for E(EUR)0.7928 or to sell them for E(EUR)0.7930.
- B. the bank is willing to commit itself today to sell dollars in one month for E(EUR)0.7928 or to buy them for
E(EUR) 0.7930. - C. the bank is willing to commit itself today to buy dollars in one month for E(EUR)0.7928 or to sell them for
E(EUR) 0.7930.
Answer: C
Explanation:
In a forward, or futures, contract, a commitment is irrevocably made on the transaction date, but delivery takes place later, here a month later. The bid-ask quotation here implies that the bank is willing to commit itself today to buy dollars in one month for E(EUR)0.7928 or to sell them for E(EUR)0.7930.
NEW QUESTION 890
The overnight repurchase rate for general collateral is 6.50%. For a dealer seeking financing using special collateral, the repurchase rate agreed to:
- A. will be less than 6.50%
- B. The dealer will not be able to borrow using special collateral
- C. will be greater than or equal to 6.50%
Answer: A
Explanation:
Because special collateral is desirable for other uses, lenders will bid lower repurchase rates to lend to borrowers in possession of special collateral.
NEW QUESTION 891
Main Street contains 8 traffic lights. The lights work independently of each other and the probability one of the lights is green is 60%. The probability of travelling Main Street without stopping for a light is
_ ___% (to the nearest 0.1%)
- A. 0.1%
- B. 16.7%
- C. 1.7%
Answer: C
Explanation:
Let x count the number of green lights. Now, random variable is binomial with N = 8 and p =
0 .6. To go through town without stopping for a light we need 8 green lights, P(x = 8) = P(8). Using the calculator and finding the distribution for x, we get P(8) = 0.0168 = 1.7% (to the nearest 0.1%).
NEW QUESTION 892
If a security just experienced a triple bottom pattern, its price is then expected to:
- A. go down.
- B. either go up or go down.
- C. go up.
Answer: C
Explanation:
Technicians use the triple bottom to predict a change from a downtrend to an uptrend in security prices.
NEW QUESTION 893
A coefficient of skewness of +2.48 indicates:
I). the mean is larger than the median
II). a large positive skewness
III). the tail of the distribution is to the right
- A. I, II and III.
- B. II and III.
- C. I and III.
Answer: A
Explanation:
In a positively skewed distribution, the mean is greater than the median or mode. The coefficient of skewness (Sk) generally lies between -3 and +3, therefore a Sk of +2.48 indicates significant positive skewness.
NEW QUESTION 894
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CFA CFA-Level-I: CFA Institute CFA Level I Chartered Financial Analyst Certified Professional Salary
Salaries for CFA level 1 Certified Professionals may vary by country. The estimated salaries of a CFA level 1 exam test given below:
Europe: 92,000 Euro
United States: 15,000 USD
England: 78,000 Pounds
India: 7,15,437 INR
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