CFA一级模考

CFA一级模考题1 . A 30-year, 10% annual coupon bond is sold at par. It can be called at the end of 10 years for$1,100. What is the bond's yield to call (YTC)?A) 8.9%.B) 10.6%.C) 10.0%.B was correct!N = 10; PMT = 100; PV = 1,000; FV = 1,100; CPT → I = 10.6.2. To reduce the cost of long-term borrowing, a corporation with a below average credit ratingcould:A) decrease credit enhancement.B) issue securitized bonds.C) issue commercial paper.B was correct!Commercial paper is only issued by corporations with top credit ratings. Decreasing credit enhancements increase the cost of borrowing.3. The principal value of a sovereign bond is $1,000 at issuance and $1,055 two years afterissuance. This bond most likely:A) is indexed for inflation.B) trades at a premium.C) has been upgraded.A was correct!Inflation-indexed bonds often have a capital-indexed structure in which the principal value is adjusted periodically by the inflation rate. Credit rating upgrades or downgrades do not affect the principal value of bonds. A bond is trading at a premium when its market price is greater than its principal value.4. If the current two-year spot rate is 6% while the one-year forward rate for one year is 5%,what is the current spot rate for one year?A) 7.0%.B) 5.5%.C) 5.0%.A was correct!(1 + 1y1y)(1 + s1) = (1 + s2)2(1 + 0.05)(1 + s1) = (1 + 0.06)2(1 + s1) = (1.06)2 / (1 + 0.05)1 + s1 = 1.1236 / 1.051 + s1 = 1.0701s1 = 0.07 or 7%5. A 20-year bond with a par value of $1,000 and an annual coupon rate of 6% currently trades at$850. It has a yield to maturity of:A) 7.5%.B) 7.9%.C) 6.8%.A was correct!N = 20; FV = 1,000; PMT = 60; PV = -850; CPT → I = 7.5。

ANSWERS FOR MOCK EXAM 1 (MORNING SESSION)1. D.Although Terence has passed Level III, he has not yet received his charter andcannot use the CFA designation. The description provided in the cover letterproperly describes his situation.2. C.Amy must take both actions-notifying her immediate supervisor and delivering acopy of the Code and Standards.3. D.4. C.Members may undertake an independent practice that could result in compensationor other benefit in competition with their employer provided they obtain writtenconsent from both their employer and the party for whom they undertakeindependent practice.5. C.To maintain his objectivity, Keith should pay his own hotel bill. Because the itineraryrequired charter flights due to a lack of commercial transportation, A& K Limited can appropriately provide them.6. C. Under ERISA, fiduciaries must act solely in the interest of, and for the exclusivepurpose of benefiting, the plan participants and beneficiaries.7. B. Daniel must give priority to transactions for clients and employers over transactionsfor his children.8. A.To avoid violating the standards, members cannot trade until the member's clients andemployers have had an adequate opportunity to act on the recommendation.9. C.The requirements of Standard IV (B.5) are not intended to prevent Lambert fromcooperating with an investigation by AIMR's Professional Conduct Program.10. B.Vivian should disclose to her clients and prospects her husband's holdings in DoubleLimited because this matter could be expected to impair her ability to makeunbiased and objective recommendations.11. B.12. B.Accruals accounting is required.13. C.Standard I(B) Fundamental Responsibilities. Prohibition against participating orassisting in illegal and ethical violations. If Roberts suspects someone isplanning or engaging in illegal activities, he should: (1) determine the legalityof the activities, (2) disassociate himself from the illegal or unethical activity, and(3) urge his firm to attempt to persuade the perpetrator to stop. The AIMRStandards of Professional Conduct do not require that Roberts report suchactivities to the authorities, but the law might.14. C.Standard III(C) Disclosure of Conflicts to Employer. Gloria should disclose to heremployer all matters that could reasonably be expected to interfere with herability to make unbiased and objective recommendations. Her service as atrustee of the Well Limited Foundation for Heart Research is most likely to beconsidered a conflict of interest with her responsibility to her employer.15. C.Standard III (E) Responsibilities of Supervisors. Paul may delegate supervisory duties,but such delegation does not relieve him of his supervisory responsibility.16. A.Standard IV (B.3) Fair Dealing. Johnson violated the standard on fair dealingbecause he did not deal fairly and objectively with all clients and prospectswhen disseminating investment recommendations. Instead, he showedfavoritism to his best clients. In disseminating investment recommendations,Johnson should consider making the information available to clients based ontheir interest and suitability. A change of recommendation from buy to sell or sellto buy is generally material.17. D.Standard IV(B.5) Preservation of Confidentiality. Choice B is false because thisAnswers for Mock Exam 1 (Morning Session) (Rev. 1) 1standard prohibits members from executing settlement agreements that preventmembers from providing information in an investigation by AIMR's ProfessionalConduct Program (PCP). Choice C is false because a person cannot withholdinformation during PCP investigations. Choice A is false because if a memberreceives information due to his or her special relationship with the clientindicating illegal behavior on the past of the client, the member may not have anobligation to inform the appropriate authorities.18. A.Standard IV(B.6) Prohibition against Misrepresentation. Members are not permitted tomake any assurances or guarantees about any investment, except tocommunicate accurate information. The statement that investment grade bondshave less default risk than junk bonds is an accurate statement.19. e BGN node: n = 10; i = 12 PMT = 1,000, compute FV = 19.654.5820. B.The present value of a perpetuity is PV = A/r = 500/0.1 = $5,000.21. B.i = 6/12 = 0.5; n = 10x12 = 120; PV = 40,000 Compute PMT22. A.23. A.A binomial random variable has an expected value or mean equal to np andvariance equal to np(1-p).Mean = 12(0.5) = 6; variance (12)(0.5)(1-0.5) = 324. D.25. B.Rbt-1 = In St+1 /St = (1+RL1-1) = In (40/25) = 0.47. Thus, 47% is thecontinuously computed return for the one-year holding period.26. B.Choice A describes cross-sectional data.Choice B describes time-series data.27. D.The dependent variable, Y, is equal to the intercept, b0, plus a slope coefficient, b1,times the independent, X, plus an error term, ε.28. C.I N FV Compute PV10 1 100 90.9110 2 150 123.9710 3 200 150.2610 4 250 170.75Total 535.8929. B.Step 1: Solve for the PV of the 5 payments of 3,000 to be received in years 3through 7.n = 5; i = 10; PMT = 3,000; compute PV =11,372.3611,372.36 falls one year before the first payment, or in year 2.Step 2: Find the present value of 11,372.36 that is two years in the future. n= 2; i = 10; FV =11,372.36; compute PV =9,398.64 or 9,399(rounded).30. D.From weakest to strongest, the ordering of measurements scales is nominal, ordinal,interval, and ratio.31. B.An interval is a set of return values within which an observation not falls.32. C.Step 1. Calculate the mean monthly return = 2% + (- 4%) + 1% + 5% = 4%M = 1%Step 2.Calculate the population standard deviation:([(2% - 1%) 2 + (-4% -1%) 2 +(1% - 1%) 2 +(5% -1%)2 ]N)1/ 2=3.24%Step 3. Calculate the sample standard deviation: ([(2% - 1%)2 + (-4% -1%) 2+ (1% - 1%) 2+ (5% - l%) 2 ])/n - 1) 1/ 2 = 3. 74%33. B.According to Chebyshev's inequality, the proportion of the observations within 2,which is k, standard deviations of the mean is at least 1 -(l/k) 2 = 1-(1/2 2) =0.75 or 75%.34. A.The probability is 30/200 = 0.15.35. ing the addition rule for probabilities, P (analyst or positive) =P(analyst) +Answers for Mock Exam 1 (Morning Session) (Rev. 1) 2P(positive) - P(analyst and positive)P (A or positive) = 130/200 + 140/200 - (100/130) = 0.58 or 58%36. B.Savings increases to hold interest rates constant. This means aggregate demandchanges little.37. C.The empirical evidence on the relationship between budget deficits and interest ratesis mixed.Few studies show a significant positive short-term link between budgetdeficits and real interest rates.38. B.Expansion = 1 / reserve requirement = 1/0.25 = 4(4)(150) = 60039. C.People realize this leads to inflation in the long run, so they reduce their moneyholdings. Output rises because the increase is unexpected.40. C.In purely competitive markets, there are a large number of dependent firms.41. D.42. D.43. C.44. C.45. D.Choice A: Accrual accounting does not require the receipt of cash for assurance ofpayment to exist.Choice C and D: These relate only to the condition of completion of theearnings process.46. D.47.ADemand for currency decreases when real interest rates decrease because ofdecreased capital flows.48.CForeign exchange quotations can be expressed on a direct basis -the home currencyprice of another currency — or an indirect basis-- the foreign currency price ofthe home currency.49.C F/S= (1 + r D )/(l + r F) where rates are listed as DC/FCF = (1.3/1.25)(0.4) = 0.41650. C.Direct method:Net income 1000Depreciation 70Goodwill 30Change in accounts receivable 25Change in inventory (35)Change in accounts payable 30Change in wages payable 15Operating cash flows 113551. B. Purchase equipment (200)Sell truck 25Investing cash flows (175)52. D. Sale of common stock 100Issuance of bonds 20Financing cash flows 12053. D.A common size balance sheet expresses all balance sheet accounts as apercentage of total assets.54. C. Original shares of common stock = 1,000,000(12) = 12,000,000Stock dividend = 200,000(12) = 2,400,000New shares of common stock = 200,000(3) = 600,000Total shares of common stock = 15,000,000/12= 1,250,000 Stock dividends are assumed to have been outstanding since the beginningof the year.55. D.Inventory turnover, defined as COGS/Average inventory, if often meaningless forLIFO companies due to the mismatching of costs. The numerator representscurrent costs, whereas the denominator reports outdated historical costs. Thus,the turnover ratio under LIFO will, when prices decrease, trend lower becauseof small COGS and larger inventory. Net profit margin, defined as EA T/Sales,is higher during periods of decreasing profits for LIFO companies. LIFO leadsto a smaller COGS, which reduces EAT, without affecting sales.56. A.In this situation, LIFO results in lower cost of goods sold because it uses the morerecent and lower costs than LIFO. LIFO results in lower cash flows becausethe cash on income taxes is a percentage(the marginal tax rate) of thedifference in inventory values. Thus, with LIFO:Sales-COGS(smaller)EBT (larger)-Taxes (larger) Because taxes paid out are a cash outflow.EAT (larger) If taxes are larger, then cash flow ill be smaller.57. D.COGSFIFO = COGSLIFO - (Ending LIFO Reserve - Beginning LIFO Reserve)COGSFIFO = $250,000 - ($8,000-$5,000) = $247,00058. pared to expensing, capitalizing results in higher profitability in early yearsand lower profitability in later years.59. C.60. D.The present value of the minimum lease payments equals or exceeds 90 percent ofthe value of the fair value of the leased property.61. B.Capital lease affects on the income statement:Step1: Calculate the depreciation charge: ($3,500,000-$450,000)/10 = $305,000Step2: Calculate the interest expense: $3,500,000(0.15) = $525,000Total expense: $305,000+$525,000 = $830,00062. A.63. C.64. A.65. B.66. D.67. B.Dealer-markets are price-driven markets.68. D.69. C.70. C.P/E = Dividend payout ratio/(k-g)Dividend payout ratio = 1 - retention ratio = 1-0.2 = 0.8P/E = 0.8(0.15-0.08) =5.671. B.k = D1/P0+g = $4/$25+0.09 = 0.2572. A.Step1: Calculate the ending index value = ($100)(5) = $500Step2: Calculate the expected return.E(R1) = [Dividends + (Ending value - Beginning value)]/(Beginning value)=[40+(500-490)]/$490 = 0.1 or 10%73. D.The critical factors determining the franchise P/E are the difference between theexpected return on the new opportunities (R) and the current cost of capital (k)and the size of these growth opportunities relative to the firm's current size.74. A.75. C.76. D The completed contract method less net income in the periods beforeconstruction is completed, but not at the end of the contract, than using thepercentage-of-completion method. This is because the completed contractmethod recognizes revenue and expense only when the contract has beencompleted.77. A. Net income 1,000Adjustment for non-cash andnon-operating itemsDepreciation 100Deferred taxes (increase) 40Profit from sale ofequipment (10)Adjustment for workingcapital items:Accounts receivable (decrease) (120)Inventory (increase) (40)Accounts payable (increase) (20)Wages payable (decrease) (10)Cash flow from operations 94078. D79.A When inventory and accounts receivable increase, this is a use of cash (cashoutflow); when assets decrease, this is a source (cash inflow). When accountspayable increase, this is a source of cash (cash inflow); when liabilities decrease,this is a use (cash outflow).80.BCash conversion cycle = receivables days + inventory processing days -payables payment period.Receivables days = 365/receivabies turnover = 365/30 = 12.17 days.Inventory processing days = 365/inventory turnover = 365/15 = 24.33 days.Payables payment period = 365/payabIes turnover = 365/20 = 18.25days.Cash collection cycle = 12.17 + 24.33 –18.25 = 18.25 days.81.BChoice A: Buying fixed assets on credit does not affect current assets butincreases current liabilities. Therefore, the current ratio falls.Choice B: Buying inventory on account increases both inventory and accountspayable. Because the current ratio started off below I, the ratio will increase.Choice C: Selling marketable securities for cash does not affect the amount ofcurrent assets and leaves the current ratio unaffected,Choice D : Paying off accounts payable from cash lowers current assetsand current liabilities by the same amount. Because the current ratio startedoff below 1, the ratio will fall.82.D ROE = Profit margin x Total asset turnover x financial leverageROE = (0.3)(2.1)(0.5)= 0.315 or 31.5%83.AROE = [(S/A)(EBIT/S) - (I/A)](A/EQ)(I - t)ROE = [(2.5)(0.2) - (0.08)](1.2)(0.6) = 0.30 or 30%84. A85.B EPS = ($180,000 - $4,000) / 50,000 = $3.52 per share86. B87. D88.CThese relationships are reversed in the latter years of the asset's life if the firm'scapital expenditures decline.89. D90. C.91. C.92. D.93. D.Absolute yield spread = Yield on Bond A - Yield on Bond B = 10%-7% = 3%94. B.Relative yield spread = (Yield on Bond A - Yield on Bond B)/(Yield on BondB)=(10%-7%)/7% = 0.43 = 43%95. B.Yield ratio = (Yield on Bond A)/(Yield on Bond B) = 6%/7% = 1.4396. B.Current yield = (Annual dollar coupon interest)/(Price of the bond) = 8/130 =0.0625 or 6.25%97. A.When the stock's price (S) - the strike price (X) is positive, a call option isin-the-money. 25-X = 8 so X = 17.98. A.99. A.The writer of put loss = $60-premiun$5 = $55 Thewriter of call gets a maximum gain of $8100. A.101. C.102. D.103. A.104. D.105. B.106. D.107. C.108. A.Securities that fall on the SML are properly valued.109. A.110. A.If a stock's beta were equal to 1, an investor would be expected to get the marketrate of return from buying the stock. E(R) = 5%+1(10%-5%) = 10% 111. D112. D113. C114.BPerfect positive correlation (r = + 1) of the returns of two assets offers no risk reduction, whereas perfect negative correlation (r = -1) offers the greatestrisk reduction.115.BPortfolio A does not lie on the efficient frontier because it has a lower return than Portfolio B but has greater risk. Portfolio D does not lie on the efficient frontier because it has higher risk than Portfolio C but has the same return. 116. C.117.DChoice A: Unsystematic risk is diversifiable risk.Choice B: Systematic risk is undiversifiable risk.Choice C: Total risk= Systematic risk+ Unsystematic risk.118. C119.DCAPM specifies the factor (market risk) but APT does not.120. A。

CFA一级模考题1 . Which of the following is generally true of the head and shoulders pattern?A Volume is important in interpreting the data.B The neckline, once breached, becomes a support level.C Head and shoulders patterns are generally followed by an uptrend in the security's price.2 . Nikolai Kondratieff concluded in the 1920s chat since the 1780s, Western economies have generally followed a cycle of how many years?A 18.B 54.C 76.3 . Based on the decennial pattern of cycles, how would the return of the Dow Jones Industrial Average (DJJA) in the year 2015 compare with the return in 2020?A The return would be better.B The return would be worse.C The answer cannot be determined because the theory does not apply to both of those years.4 .According to the U.S. presidential cycle theory, the DJIA has the best performance during which year?A The presidential election year itself.B The first year following a presidential election.C The third year following a presidential election.5 . What is a major problem with long-term cycle theories?A The sample size is small.B The data are usually hard to observe.C They occur over such a long period that they are difficult to discern1. A is correct. Volume is necessary to confirm the various market rallies and reversals during the formation of the head and shoulders pattern.2 . B is correct.3 . A is correct. The decennial pattern theory states that years ending with a 5 will have the best performance of any of the 10 years in a decade and that those ending with a zero will have the worst.4 . C is correct. A possible reason for the superior performance in the third year is that the U.S. presidential election occurs, together with a number of other elections. in a four-year cycle. so the politicians desiring to be reelected inject money into the economy in the third year to Improve their chances of winning the following year.5 . A js correct. Long-term cycles require many years to complete; thus. not many cycles are available to observe.。

CFA一级模考题1 . Ed Socho states that in a GIPS-compliant presentation, (1) total firm value must be based on the market values of all accounts including non-fee-paying accounts and accounts where the client makes the investment decisions. and that (2) the firm must include the performance results of third-party advisors selected by the firm in composite performance. Are Socho's statements accurate?A. Both of these statements are accurate.B. Neither of these statements is accurate.C. Only one of these statements is accurate.解析：ABoth statements are correct. Total firm assers must include fee-paying and non-fee- paying accounts. If a sub-advisor who manages firm assets is selected by the firm, the performance of assers under the sub-advisor's control must be included in the performance of the firm's composite for those assets.2 . Upon completing investment reports on equity securities, Shannon Mason, CFA. routinely shreds all documents used in preparing the reports. In a report on UltraTech Software, Mason provides detailed explanations of the upside and downside risks associated with UltraTech, but provides no information on a sharp decrease in insider buying over the last 12 months. Mason has most likely violated:A. CFA Institute Standards by failing to maintain adequate records.B. CFA Institute Standards by neglecting to include the insider buying information in the investment report.C. none of the Standards.解析：AStandard V(C). This Standard requires CFA charterholders and candidates to maintain appropriate records to support investment recommendations. Shredding all of the supporting documents is clearly a violation of the standard. Mason did nor violate Standard V(B), however, since she fully described the basic charaaeristics of the investment. The level of insider buying is not a basic characreristic of an equity security.3 . William Callahan, CFA, is an energy analyst. His supervisor, Nancy Deininger, CFA, has recently decided to let Callahan cover a few of The firms that Deininger had been covering previously. Deininger gives Callahan specific instructions not to change her prior recommendation on one of these firms, Mayfield Energy. Callahan's least appropriate action is to:A. tell Deininger that he cannot cover Mayfield Energy under those restrictions.B. perform his own independent analysis of Mayfield and reach an independent conclusion.C. use ambiguous language in the report, in order to not mislead the investor while complying with his employer's instructions.解析：CIn accordance with Standard I(B) Independence and Objectivity, Callahan must only issue recommendations that reflect his own independent judgment. If Deininger will not permit him to do so, Callahan must refuse to cover the firm under the conditions specified.4 . Wayne Sergeant, CFA, is an independent investment advisor who works with individuals. A longtime client asks Sergeant if he can recommend an attorney. Sergeant refers his client to Jim Chapman, a local attorney who is also a friend of Sergeant's. Previously, Chapman had agreed to perform some legal work for Sergeant in exchange for the referral of new clients. Do Sergeant's actions violate CFA Institute Standards of Professional Conduct?A. No, because the client is under no obligation and is still free to select another attorney.B. Yes, because Sergeant is prohibited from a making recommendations that could be considered biased due to his friendship with Chapman.C．Yes, because Sergeant did not disclose the nature of his arrangement with Chapman to his client.解析：CStandard VI(C) Disclosure of Conflicts requires members to disclose to their clients any compensation or benefit received by, or paid to, others for the recommendation of services. Sergeant's failure to disclose that he receives legal services for his referral of clients to Chapman is in violation of the Standards.5 . Linda Schultz, CFA, is an investment advisor at Wheaton Investments. Schultz has been employed there for five years, and has never signed a "non-compete" clause. While at Wheaton, Schultz makes preparations to set up her own money management firm. She does not contact any existing clients before leaving Wheaton and does not take any firm records or files. After her resignation becomes effective, Schultz replicates a list of former clients from memory and uses public sources to get their contact information. She then contacts these former clients and solicits their business for her new firm. Has Schultz violated any CFA Institute Standards?A. Yes. Schultz may not contact clients of her old firm.B. No. Schultz is in compliance with CFA Institute Standards.C. Yes. Schultz is permitted to notify clients that she has left her old firm, but she cannot encourage them to come with her to the new firm.解析：BSchultz continued to act in her employer's best interest while still employed and did not engage in any activities that would conflict with this duty until her resignation became effective. Standard IV(A) Loyalty does not prohibit her from contacting clients from her previous firm if she does not get the contact in formation from the records of her former employer or violate an applicable non-compete agreement.。

CFA一级模考题1 .The formative stage of venture capital investing when capital is furnished for market researchand product development is best characterized as the:A) seed stage.B) early stage.C) angel investing stage.A was correct!In the seed stage of venture capital investing, capital is furnished for product development, marketing, and market research. The angel investing stage is when investment funds are used for business plans and assessing market potential. The early stage refers to investments made to fund initial commercial production and sales.2.For which of the following investments is an investor most likely to require the greatest liquiditypremium?A) Real estate investment trusts.B) Private equity funds.C) Commodity futures.B was correct!Private equity funds tend to have lockup periods; investors will require liquidity premiums as compensation. REITs and commodity futures are exchange-traded instruments and much more liquid than private equity funds.3.An additional risk of direct investment in real estate, which is not typically a significant risk in aportfolio of traditional investments, is:A) market risk.B) liquidity risk.C) counterparty risk.B was correct!Direct investment in real estate involves liquidity risk because large sums may be invested for long periods before a sale of the property can take place. Market risk exists for both traditional portfolio and real estate investments. Counterparty risk applies mainly to derivative contracts that require a payment from a counterparty, such as swaps and forwards.4.A private equity provision that requires managers to return any periodic incentive fees resulting ininvestors receiving less than 80% of profits is a:A) clawback.B) drawdown.C) high water mark.A was correct!A clawback provision requires the manager to return any periodic incentive fees to investors thatwould result in investors receiving less than 80% of the profits generated by portfolio investments as a whole.5.Bulldog Fund is a hedge fund with a value of £100 million at the beginning of the year. BulldogFund charges 1.5% management fee based on assets under management at the end of the year anda 25% incentive fee with no hurdle rate. Incentive fees are calculated independent ofmanagement fees. The fund’s value at the end of year before fees is £120 million. Compared to a2 and 20 fee structure, Bulldog Fund’s total fees for the year are:A) higher.B) lower.C) the same.A was correct!。

CFA一级模考题1 . Financing costs for a capital project are:A) subtracted from the net present value of a project.B) captured in the project’s required rate of return.C) subtracted from estimates of a project’s future cash flows.B was correct!Financing costs are reflected in a project’s required rate of return. Project specific financing costs should not be included as project cash flows. The firm's overall weighted average cost of capital, adjusted for project risk, should be used to discount expected project cash flows.2. One of the basic principles of capital budgeting is that:A) cash flows should be analyzed on a pre-tax basis.B) opportunity costs should be excluded from the analysis of a project.C) decisions are based on cash flows, not accounting income.C was correct!The five key principles of the capital budgeting process are:1. Decisions are based on cash flows, not accounting income.2. Cash flows are based on opportunity costs.3. The timing of cash flows is important.4. Cash flows are analyzed on an after-tax basis.5. Financing costs are reflected in the project’s required rate of return.3. Which of the following policies regarding shareowner rights for equity investors is most likelydetrimental to the shareowners’ interests?A) The company uses a third-party entity to tabulate shareowner votes.B) Shareowners can approve changes to the corporate structure only with a supermajorityvote.C) Shareowners are permitted to vote either by paper ballot or a proxy voting service.B was correct!Provisions that require a supermajority can even make changes strongly supported byshareowners more difficult to enact.4. A publicly traded company has a beta of 1.2, a debt/equity ratio of 1.5, ROE of 8.1%, and amarginal tax rate of 40%. The unlevered beta for this company is closest to:A) 1.071.B) 0.632.C) 0.832.B was correct!The unlevered beta for this company is calculated as:5.Corporate governance defines the appropriate rights, role, and responsibilities of:A) management only.B) management, the board of directors, and shareholders.C) management and the board of directors.B was correct!Corporate governance defines the appropriate rights, roles, and responsibilities of acorporation’s management, the board of directors, and shareholders.。

CFA一级模考题1 . If a good has elastic demand, a small price decrease will cause:A)a larger increase in quantity demanded.B)no change in the quantity demanded.C)a larger decrease in the quantity demanded.The correct answer was AIf a good has elastic demand, a small price decrease will cause a larger increase in the quantity demanded.2 . Income elasticity is defined as the percentage change in:A)income divided by the percentage change in the quantity demanded.B)quantity demanded divided by the percentage change in income.C)quantity demanded divided by the percentage change in the price of the product.The correct answer was BIncome elasticity is defined as the percentage change in quantity demanded divided by the percentage change in income. Normal goods have positive values for income elasticity, and inferior goods have negative income elasticity.3 . Producer surplus is best described as the:A)amount by which price exceeds the cash cost of production.B)excess of price over the opportunity cost of production.C)excess quantity supplied relative to quantity demanded.The correct answer was BProducer surplus is defined as the excess of price over the opportunity cost, not the cash cost, of production. Excess quantity supplied relative to quantity demanded represents a surplus of the good in the market, but is not referred to as producer surplus.4 . Marginal revenue product is best defined as the:A)gain in total revenue from selling one more unit of output.B)addition to total revenue from selling the additional output from using one more unit of an input.C)additional output that results from employing one more unit of a productive input.The correct answer was BThe marginal revenue product is the addition to total revenue from selling the additional output that one more unit of an input can produce. The additional output that results from employing one more unit of a productive input is the marginal product. The gain in total revenue from selling one more unit of output is the marginal revenue. A marginal revenue product exists for any level of output; it is not limited to the level at which marginal revenue equals marginal cost.5 . In a natural monopoly:A)one firm controls all natural resources.B)the average total cost of production continually declines with increased output.C)the price charged by a monopolist is determined by the intersection of the demand curve with the marginal cost curve.The correct answer was BA monopoly situation in which the average total cost of production continually declines with increased output is called a natural monopoly.。

CFA一级模考题1 . A stock that plots below the Security Market Line most likely:A) is overvalued.B) has a beta less than one.C) is below the efficient frontier.A was correct!Since the equation of the SML is the capital asset pricing model, you can determine if a stock is over- or underpriced graphically or mathematically. Your answers will always be the same.Graphically: If you plot a stock’s expected return on th e SML and it falls below the line, it indicates that the stock is currently overpriced, causing its expected return to be too low. If the plot is above the line, it indicates that the stock is underpriced. If the plot falls on the SML, it indicates the stock is properly priced.Mathematically: In the context of the SML, a security is underpriced if the required return is less than the holding period (or expected) return, is overpriced if the required return is greater the holding period (or expected) return, and is correctly priced if the required return equals the holding period (or expected) return.2. Which of the following statements about portfolio diversification is CORRECT?A) The efficient frontier represents individual securities.B) As the correlation coefficient moves from +1 to zero, the potential for diversificationdiminishes.C) When a risk-averse investor is confronted with two investment opportunities having thesame expected return, the investor will take the opportunity with the lower risk.C was correct!The other statements are false. The lower the correlation coefficient; the greater the potential for diversification. Efficient portfolios lie on the efficient frontier.3. If two stocks have positive covariance, which of the following statements is CORRECT?A) The rates of return tend to move in the same direction relative to their individual means.B) The two stocks must be in the same industry.C) If one stock doubles in price, the other will also double in price.A was correct!This is a correct description of positive covariance.If one stock doubles in price, the other will also double in price is true if the correlationcoefficient = 1. The two stocks need not be in the same industry.4. Which of the following is the vertical axis intercept for the Capital Market Line (CML)?A) Expected return on the market.B) Risk-free rate.C) Expected return on the portfolio.B was correct!The CML originates on the vertical axis from the point of the risk-free rate.5. According to Markowitz, an investor’s optimal portfolio is determined where the:A) investor's lowest utility curve is tangent to the efficient frontier.B) investor's highest utility curve is tangent to the efficient frontier.C) investor's utility curve meets the efficient frontier.B was correct!The optimal portfolio for an investor is determined as the point where the investor’s highest utility curve is tangent to the efficient frontier.。

CFA一级模考题1 . The most appropriate measure of the increase in the purchasing power of a portfolio’s value over a given span of time is a(n):A) after-tax return.B) real return.C) holding period return.The correct answer was BA real return is adjusted for the effects of inflation and is used to measure the increase in purchasing power over time.2 . Which of the following statements about the capital market line (CML) is least accurate?A) The market portfolio lies on the CML and has only unsystematic risk.B) Investors choose a portfolio on the CML by varying their weightings of the risk-free asset and the market portfolio.C) The CML will not be a linear relationship if investors' borrowing and lending rates are not equal.The correct answer was AThe first part of this statement is true - the market portfolio does lie on the CML. However, the market portfolio is well diversified and thus has no unsystematic risk. The risk that remains is market risk, or nondiversifiable, or systematic risk.The CML measures standard deviation (or total risk) against returns. The CML will “kink” if the borrowing rate and lending rate are not equal. Investors choose a portfolio on the CML by lending or borrowing at the risk-free rate to vary the weighting of their investments in the risk-free asset and the market portfolio.3 . Stock A has a standard deviation of 10%. Stock B has a standard deviation of 15%. The covariance between A and B is 0.0105. The correlation between A and B is:A) 0.55.B) 0.70.C) 0.25.The correct answer was: BCovA,B = (rA,B)(SDA)(SDB), where r = correlation coefficient and SDx = standard deviation of stock xThen, (rA,B) = CovA,B / (SDA × SDB) = 0.0105 / (0.10 × 0.15) = 0.7004 . A portfolio to the right of the market portfolio on the capital market line (CML) is created by:A) holding both the risk-free asset and the market portfolio.B) holding more than 100% of the risky asset.C) fully diversifying.The correct answer was: BPortfolios that lie to the right of the market portfolio on the capital market line are created by borrowing funds to own more than 100% of the market portfolio (M).The statement, "holding both the risk-free asset and the market portfolio" refers to portfolios that lie to the left of the market portfolio. Portfolios that lie to the left of point M are created by lending funds (or buying the risk free-asset). These investors own less than 100% of both the market portfolio and more than 100% of the risk-free asset. The portfolio at point Rf (intersection of the CML and the y-axis) is created by holding 100% of the risk-free asset. The statement, "fully diversifying" is incorrect because the market portfolio is fully diversified.5 . A return objective is said to be relative if the objective is:A) stated in terms of probability.B) compared to a specific numerical outcome.C) based on a benchmark index or portfolio.The correct answer was CRelative return objectives are stated relative to specified benchmarks, such as LIBOR or the return on a stock index. Absolute return objectives are stated in terms of specific numerical outcomes, such as a 5% return. Risk objectives (either absolute or relative) may be stated in terms of probability, such as “no more than a 5% probability of a negative return.”。

CFA一级模考题1 . Which of the following least likely affects a property’s investment potential?A) Structure of the financing mechanisms used to buy the property.B) The legal rights associated with the property.C) The activity around the property, both commercial and non-commercial.A was correct!The financing and investing decisions are made separately. Market value analysis does not consider how the asset will be financed.2. Return and risk data on alternative investments may be affected by backfill bias if:A. data only include currently existing firms.B. the incorrect distribution is used to model volatility.C. previous performance data for firms added to a benchmark index is included.3.Which of the following is least likely a characteristic of the income method for real estatevaluation?A) Require a discounted cash flow model.B) Account for the effects of income taxes.C) Ignore future changes in operating income.B was correct!The income method does not consider the investment’s income-tax implications. However, it does use a discounted cash flow model based on net operating income. The income method does not account for potential changes in operating income.4. Which of the following strategies is most likely to be pursued by a private equity fund?A. Use debt financing to acquire control of a publicly traded firm.B. Buy convertible bonds and sell short the equity of the bond issuerC. Influence a firm's policies by gaining a seat on its board of directors.5. Which of the following is least likely a type of hedge fund strategy?A. Event-driven.B. Market-neutral.C. Exchange-traded.。