CFA一级模考

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 . 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 . A pooled investment with a share price significantly different from its net asset value (NA V)per share is most likely a(n):A) open-end fund.B) exchange-traded fund.C) closed-end fund.C was correct!Closed-end funds’ share prices can differ significantly from their NA Vs. Open-end fund shares can be purchased and redeemed at their NA Vs. Market forces keep exchange-traded fund share prices close to their NA Vs because arbitrageurs can profit by trading when there are differences.2. An investor has a two-stock portfolio (Stocks A and B) with the following characteristics:σA = 55%σB = 85%Covariance A,B = 0.09W A = 70%W B = 30%The variance of the portfolio is closest to:A) 0.25B) 0.39C) 0.54A was correct!The formula for the variance of a 2-stock portfolio is:s2 = [W A2σA2 + W B2σB2 + 2W A W BσAσB r A,B]Since σAσB r A,B = Cov A,B, thens2 = [(0.72 × 0.552) + (0.32 × 0.852) + (2 × 0.7 × 0.3 × 0.09)] = [0.1482 + 0.0650 + 0.0378] =0.2511.3. An investment manager has constructed an efficient frontier based on a client’s investableasset classes. The manager should choose one of these portfolios for the client based on:A) the investment policy statement (IPS).B) relative valuation of the asset classes.C) a risk budgeting process.A was correct!After defining the investable asset classes and constructing an efficient frontier of possible portfolios of these asset classes, the manager should choose the efficient portfolio that best suits the investor’s objectives as defined in the IPS. The investor’s strategic asset allocation can then be defined as the asset allocation of the chosen portfolio. Tactical asset allocation based on relative valuation of asset classes would require the manager to deviate from the strategic asset allocation. Risk budgeting refers to the practice of determining an overall risk limit for a portfolio and allocating the risk among strategic asset allocation, tactical asset allocation, and security selection.A) 6.B) 12.C) 3.A was correct!The formula for the covariance for historical data is:cov1,2= {Σ[(R stock A− Mean R A)(R stock B− Mean R B)]} / (n − 1)Mean R A = (10 + 6 + 8) / 3 = 8, Mean R B = (15 + 9 + 12) / 3 = 12Here, cov1,2= [(10 − 8)(15 − 12) + (6 − 8)(9 − 12) + (8 − 8)(12 − 12)] / 2 = 65.Which of the following would be assessed first in a top-down valuation approach?A) Industry return on equity (ROE).B) Fiscal policy.C) Industry risks.B was correct!In the top-down valuation approach, the investor should analyze macroeconomic influences first, then industry influences, and then company influences. Fiscal policy, as part of the macroeconomic landscape, should be analyzed first.。

CFA一级模考题1 . Given the following data, what is the correlation coefficient between the two stocks and theBeta of stock A?●standard deviation of returns of Stock A is 10.04%●standard deviation of returns of Stock B is 2.05%●standard deviation of the market is 3.01%●covariance between the two stocks is 0.00109●covariance between the market and stock A is 0.002Correlation Coefficient Beta (stock A)A) 0.5296 2.20B) 0.6556 2.20C) 0.5296 0.06A was correct!correlation coefficient = 0.00109 / (0.0205)(0.1004) = 0.5296.beta of stock A = covariance between stock and the market / variance of the marketBeta = 0.002 / 0.03012 = 2.22 . A security portfolio earns a gross return of 7.0% and a net return of 6.5%. The difference of0.5% most likely results from:A) taxes.B) fees.C) inflation.B was correct!The net return on a portfolio is its gross return minus management and administrative fees. A return adjusted for taxes is called an after-tax return. A return adjusted for inflation is called a real return.3 . Stock A has a standard deviation of 10.00. Stock B also has a standard deviation of 10.00. Ifthe correlation coefficient between these stocks is - 1.00, what is the covariance between these two stocks?A) -100.00.B) 1.00.C) 0.00.A was correct!Covariance = correlation coefficient × standard deviation Stock 1 × standard deviation Stock 2= (- 1.00)(10.00)(10.00) = - 100.00.4 . Which of the following statements best describes risk aversion?A) Given a choice between two assets of equal return, the investor will choose the asset withthe least risk.B) There is an indirect relationship between expected returns and expected risk.C) The investor will always choose the asset with the least risk.A was correct!Risk aversion is best defined as: given a choice between two assets of equal return, theinvestor will choose the asset with the least risk. The investor will not always choose the asset with the least risk or the asset with the least risk and least return. As well, there is a positive, not indirect, relationship between risk and return.5 . An asset manager’s portfolio had the following annual rates of return:Year R eturn20X7 +6%20X8 -37%20X9 +27%The manager states that the return for the period is −5.34%. The manager has reported the:A) geometric mean return.B) arithmetic mean returnC) holding period return.A was correct!Geometric Mean Return = –1 = −5.34%Holding period return = (1 + 0.06)(1 − 0.37)(1 + 0.27) − 1 = −15.2%Arithmetic mean return = (6% − 37% + 27%) / 3 = −1.33%.。

CFA一级模考题1 . An investor buys a pure-discount note that matures in 146 days for $971. The bond-equivalentyield is closest to:A) 1.2%.B) 3.0%.C) 7.5%.C was correct!The equivalent add-on return the investor earns for the 146-day holding period is $1,000 / $971 − 1 = 0.0299 = 2.99%. The bond-equivalent yield is (365 / 146) × 2.99% = 7.47%.2. A five-year bond with a 7.75% semiannual coupon currently trades at 101.245% of a par valueof $1,000. Which of the following is closest to the current yield on the bond?A) 7.65%.B) 7.53%.C) 7.75%.A was correct!The current yield is computed as: (Annual Cash Coupon Payment) / (Current Bond Price). The annual coupon is: ($1,000)(0.0775) = $77.50. The current yield is then: ($77.50) / ($1,012.45) = 0.0765 = 7.65%.3. Which of the following statements regarding zero-coupon bonds and spot interest rates is mostaccurate?A) Price appreciation creates only some of the zero-coupon bond's return.B) A coupon bond can be viewed as a collection of zero-coupon bonds.C) Spot interest rates will never vary across time.B was correct!Zero-coupon bonds are quite special. Because zero-coupon bonds have no coupons (all of the bond’s return comes from price appreciation), investors have n o uncertainty about the rate at which coupons will be invested. Spot rates are defined as interest rates used to discount a single cash flow to be received in the future. Any bond can be viewed as the sum of thepresent value of its individual cash flows where each of those cash flows are discounted at the appropriate zero-coupon bond spot rate.4. What is the current yield for a 5% three-year bond whose price is $93.19?A) 5.37%.B) 5.00%.C) 2.68%.A was correct!The current yield is computed as follows:Current yield = 5% x 100 / $93.19 = 5.37%5. Which of the following statements with regard to floating rate notes that have caps and floorsis most accurate?A) A floor is a disadvantage to both the issuer and the bondholder while a cap is anadvantage to both the issuer and the bondholder.B) A cap is a disadvantage to the bondholder while a floor is a disadvantage to the issuer.C) A cap is an advantage to the bondholder while a floor is an advantage to the issuer.B was correct!A cap limits the upside potential of the coupon rate paid on the floating rate bond and istherefore a disadvantage to the bondholder. A floor limits the downside potential of thecoupon rate and is therefore a disadvantage to the bond issuer.。

CFA一级模考CFA一级模考题1 . Lane Industries has a project with the following cash flows:Year Cash Flow0 ?$200,0001 60,0002 80,0003 70,0004 60,0005 50,000The project's cost of capital is 12%. The discounted payback period is closest to:A) 2.9 years.B) 3.9 years.C) 3.4 years.The correct answer was: BThe discounted payback period method discounts the estimated cash flows by the project’s cost of capital and then calculates the time needed to recover the investment.Year Cash Flow Discounted Cash Flow Cumulative Discounted Cash Flow0 ?$200,000 ?$200,000.00 ?$200,000.001 60,000 53,571.43 ?146,428.572 80,000 63,775.51 ?82,653.063 70,000 49,824.62 ?32,828.444 60,000 38,131.08 5,302.645 50,000 28,371.30 33,673.98discounted payback period =number of years until the year before full recovery +2 .Which of the following rights concerning shareholder-sponsored board nominations and shareholder-sponsored resolutions would be advantageous to an investor?A) The right to nominate or remove board members in certain circumstances, and the right to propose initiatives for consideration at the annual meeting.B) The right to propose initiatives for consideration at the annual meeting, but not the right to nominate or remove board members in certain circumstances.C) The right to nominate or remove board members in certain circumstances, but not the right to propose initiatives for consideration at the annual meeting.The correct answer was A The right to nominate or remove board members in certain circumstances, and the right to propose initiatives for consideration at the annual meeting. Investors need the power to put forth an independent board nominee. In addition, the right to propose initiatives for consideration at the annual meeting is an important method to send a message to management.3 . Additional debt should be used in t he firm’s capital structure if it increases:A) the value of the firm.B) firm earnings.C) earnings per share.The correct answer was A the value of the firm.The key to finding the optimal capital structure is identifying the level of debt that will maximize firm value. Earnings and earnings per share are not critical in and of themselves when assessing firm value, because they do not consider risk.4 .Carlos Rodriquez, CFA, and Regine Davis, CFA, wererecently discussing the relationships between capital structure, capital budgets, and net present value (NPV) analysis. Which of the following comments made by these two individuals is least accurate?A) “The optimal capital budget is determined by the intersection of a firm’s marginal cost of cap ital curve and its investment opportunity schedule.”B) “A break point occurs at a level of capital expenditure where o ne of the component costs of capital increases.”C) “For projects with more risk than the average firm project, NPV computations should b e based on the marginal cost of capital instead of the weighted average cost of capital.”The correct answer was C) “F or projects with more risk than the average firm project, NPV computations should be based on the marginal cost of capital instead of the weighted average cost of capital.”The marginal cost of capital (MCC) and the weighted average cost of capital (W ACC) are the same thing. If a firm’s capital structure remains constant, the MCC (W ACC) increases as additional capital is raised.5 . Sincl air Construction Company’s Board of Directors is considering repurchasing $30,000,000 worth of common stock. Sinclair assumes that the stock can be repurchased at the market price of $50 per share. After much discussion Sinclair decides to borrow $30 million that it will use to repurchase shares. Sinclair’s Chief Executive Officer (CEO) has compiled the following informat ion regarding the repurchase of the firm’s common stock:Share price at the time of buyback = $50Shares outstanding before buyback = 30,600,000EPS before buyback = $3.33Earnings yield = $3.33 / $50 = 6.7%After-tax cost of borrowing = 8.0%Planned buyback = 600,000 sharesBased on the inform ation above, Sinclair’s earnings per share (EPS) after the repurchase of its common stock will be closest to:A) $3.18.B) $3.32.C) $3.23.The correct answer was: BTotal earnings = $3.33 × 30,600,000 = $101,898,000Since the 8.0% after-tax cost of borrowing is greater than the 6.7% earnings yield (E/P) of the shares, the share repurchase reduces Sinclair’s EPS.。

CFA一级模考题1 . The portfolio approach to investing is best described as evaluating each investment based onits:A) potential to generate excess return for the investor.B) fundamentals such as the financial performance of the issuer.C) contribution to the portfolio’s overall risk and return.C was correct!The portfolio approach to investing refers to evaluating individual investments based on their contribution to the overall risk and return of the investor’s portfolio.2 . Which of the following statements best describes an investment that is not on the efficientfrontier?A) There is a portfolio that has a lower return for the same risk.B) There is a portfolio that has a lower risk for the same return.C) The portfolio has a very high return.B was correct!The efficient frontier outlines the set of portfolios that gives investors the highest return for a given level of risk or the lowest risk for a given level of return. Therefore, if a portfolio is not on the efficient frontier, there must be a portfolio that has lower risk for the same return. Equivalently, there must be a portfolio that produces a higher return for the same risk.3 . In equilibrium, investors should only expect to be compensated for bearing systematic riskbecause:A) nonsystematic risk can be eliminated by diversification.B) individual securities in equilibrium only have systematic risk.C) systematic risk is specific to the securities the investor selects.A was correct!In equilibrium, investors should not expect to earn additional return for bearing nonsystematic risk because this risk can be eliminated by diversification. Individual securities have both systematic and nonsystematic risk. Systematic risk is market risk; nonsystematic risk is specific to individual securities.4 . An individual investor specifies to her investment advisor that her portfolio must produce aminimum amount of cash each period. This investment constraint is best classified as:A) liquidity.B) legal and regulatory.C) unique circumstances.A was correct!Liquidity constraints arise from an investor’s need for spendable cash.5 .In the top-down approach to asset allocation, industry analysis should be conducted beforecompany analysis because:A) most valuation models recommend the use of industry-wide average required returns,rather than individual returns.B) an industry's prospects within the global business environment are a major determinantof how well individual firms in the industry perform.C) the goal of the top-down approach is to identify those companies in non-cyclicalindustries with the lowest P/E ratios.B was correct!In general, an industry’s prospects within the global business environme nt determine howwell or poorly individual firms in the industry do. Thus, industry analysis should precedecompany analysis. The goal is to find the best companies in the most promising industries;even the best company in a weak industry is not likely to perform well.。

CFA 一级模考题1 . The price value of a basis point (PVBP) for a 18 year, 8% annual pay bond with a par value of $1,000 and yield of 9% is closest to:A) $0.80.B) $0.44.C) $0.82.The correct answer was CPVBP = initial price – price if yield changed by 1 bps.Initial price:Price with change: FV = 1000FV = 1000 PMT = 80PMT = 80 N = 18N = 18 I/Y = 9%I/Y = 9.01 CPT PV = 912.44375 CPT PV = 911.6271PVBP = 912.44375 – 911.6271 = 0.822 . Which of the following statements concerning the price volatility of bonds is most accurate?A) Bonds with longer maturities have lower interest rate risk.B) As the yield on callable bonds approaches the coupon rate, the bond's price will approach a "floor" value.C) Bonds with higher coupons have lower interest rate risk.The correct answer was COther things equal, bonds with higher coupons have lower interest rate risk. Note that the otherstatements are false. Bonds with longer maturities have higher interest rate risk. Callable bonds have a ceiling value as yields decline.3 . A bond's yield to maturity decreases from 8% to 7% and its price increases by 6%, from $675.00 to $715.50. The bond's effective duration is closest to:The correct answer was BEffective duration is the percentage change in price for a 1% change in yield, which is given as 6. A) 7.0.B) 6.0.C) 5.0.4 . Gus Magnuson, CFA, uses duration and convexity to estimate the effects of yield changes on bond prices. If Magnuson wishes to estimate the effects of changes in spreads on bond prices, rather than changes in yields, he may appropriately use:A) duration, but not convexity.B) both duration and convexity.C) neither duration nor convexity.The correct answer was BDuration and convexity can be used with changes in spreads. The estimated percent change in bond price may be expressed as:−duration(change in spread) + (½)(convexity)(change in spread)25 . If investors expect greater uncertainty in the bond markets, yield spreads between AAA and B rated bonds are most likely to:A) widen.B) slope downward.C) narrow.The correct answer was: AWith greater uncertainty, investors require a higher return for taking on more risk. Therefore credit spreads will widen.。

CFA一级模考题1 . The primary reason for a firm to issue equity securities is to:A)improve its solvency ratios.B)acquire the assets necessary to carry out its operations.C)increase publicity for the firm’s products.The correct answer was BWhile issuing equity securities c an improve a company’s solvency ratios and increase the firm’s visibility with the public, the primary reason to issue equity is to raise the capital needed to acquire operating assets.2. If a company has a "0" earnings retention rate, the firm's P/E ratio will equal:A)1 / kB)k + gC)D/P + gThe correct answer was r: AP/E = div payout ratio / (k − g)where g = (retention rate)(ROE) = (0)(ROE) = 0Dividend payout = 1 − retention ratio = 1 − 0 = 1P/E = 1 / (k − 0) = 1 / k3 . The Sustainable Growth Rate is equal to:A)(ROE) x (1+RR).B)(ROE) x (RR).C)(ROE) x (1-RR).The correct answer was BThe Sustainable Growth Rate is equal to the return on the equity portion of new investments (ROE) multiplied by the firm's retention rate (RR).4 . A company with a return on equity (ROE) of 27%, required return on equity (ke) of 20%, and a dividend payout ratio of 40% has an implied sustainable growth rate closest to:A)12.00%.B)16.20%.C)10.80%.The correct answer was Bg = (RR)(ROE)= (.60)(.27)= 0.162 or 16.2%5 . Regarding the estimates required in the constant growth dividend discount model, which of the following statements is most accurate?A)Dividend forecasts are less reliable than estimates of other inputs.B)The model is most influenced by the estimates of "k" and "g."C)The variables "k" and "g" are easy to forecast.The correct answer was BThe relationship between "k" and "g" is critical - small changes in the difference between these two variables results in large value fluctuations.。