[Feb 02, 2023] Valid CFA-Level-I Test Answers & CFA-Level-I Exam PDF
Valid CFA Level CFA-Level-I Dumps Ensure Your Passing
How much CFA-Level-I: CFA Institute CFA Level I Chartered Financial Analyst Exam cost
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 749
A and B are efficient portfolios. Then,
- A. A combination of investments in A and B is necessarily an efficient investment.
- B. if A has a higher expected return, it must have a lower risk.
- C. A and B have the same risk-to-reward ratio, OR A and B must have the same risk.
Answer: A
Explanation:
An efficient frontier is made up of portfolios which have the highest expected return for a given level of risk and the lowest level of risk for a given level of expected returns. Hence, if A has a higher expected return, it must have a higher risk. However, this does not mean that A cannot have a higher risk-to-reward ratio. Finally, a combination of two efficient portfolios is always efficient (property of the frontier).
NEW QUESTION 750
For T-bills (no risks), the risk aversion coefficient:
- A. can be positive, 0, or negative.
- B. is always 0.
- C. is always positive.
Answer: A
Explanation:
Since the variance is 0 for T-bills, the utility is always the same (expected return) no matter if the investor is risk averse or not.
NEW QUESTION 751
The opposite of inflation is:
- A. deflation.
- B. hyperinflation.
- C. disinflation.
Answer: A
Explanation:
A deflation is a general decline in prices, often caused by a reduction in the supply of money or credit.
NEW QUESTION 752
If people expect the nominal interest rate will be higher in the near future, the aggregate demand will:
- A. increase.
- B. could increase, decrease or stay at the same level.
- C. decrease or stay at the same level.
Answer: B
Explanation:
It depends on the expected inflation rate. If it is higher than the expected increase of nominal interest rate, the real interest rate is thus expected to go down, and people will spend more. On the other hand the aggregate demand will decrease. If the two rate equal to each other, the aggregate demand will stay unchanged.
NEW QUESTION 753
Which statement(s) is/are correct?
I). A value-maximizing firm will raise new capital in a manner consistent with their target capital structure.
II). WACC is based on market values of debt and equity if the target capital structure is unknown.
III). The WACC is the correct cost of capital to use in capital budgeting.
- A. I and III). C II and III
- B. II and III.
- C. I, II and III.
Answer: C
NEW QUESTION 754
Which statement is true?
- A. Cash flow is real and not subject to the vagaries of GAAP or the whims of the accountants.
- B. Because they can be readily confirmed, the balance in cash at period's end and the total change in cash during a reporting period are not prone to misstatement.
- C. Cash flow is measured by a standardized, immutable process, without the assumptions and interpretations that are inherent in the measurement of accrual-based income.
Answer: B
Explanation:
Like earnings, cash flow can be managed and cash flow classification is subject to manipulation, creating a misleading signal of sustainable financial performance.
NEW QUESTION 755
A GDP-weighted multi-market index is essentially a ______ index.
- A. price weighted.
- B. market-capitalization weighted.
- C. fundamentally weighted.
Answer: C
Explanation:
Such an index weights each country in the overall index in proportion to its relative GDP.
NEW QUESTION 756
Which one of the following is an example of "other revenues and gains" in a multiple income statement for a manufacturing company?
I). dividend revenue.
II). rental revenue.
- A. II only.
- B. I and II.
- C. I only.
Answer: B
Explanation:
Special gains and losses that are infrequent or unusual, but not both, are normally reported in non-operating section of a multi-step income statement. These items generally break down into two main subsections: other revenues and gains, and other expenses and losses (e.g. interest on bonds and notes).
NEW QUESTION 757
ALL of the following are requirements of an efficient market EXCEPT
I). continuous analysis.
II). predictable arrival of news and information.
III). swift price adjustment to new information.
IV). low barriers to transactions and arbitrage.
- A. I and II.
- B. II only.
- C. III and IV.
Answer: B
Explanation:
New information should arrive randomly otherwise markets would not reflect all available information and informed traders would exploit uninformed traders or investors.
NEW QUESTION 758
What type of charts does NOT provide four prices per data point entry?
- A. Point and figure chart.
- B. Bar chart.
- C. Candlestick chart.
Answer: A
Explanation:
Both candlestick chart and bar chart provide four prices per data point entry.
NEW QUESTION 759
An inverse-floater has coupon rate = Maximum [(18% - 2.5r) or 0], where r is the 6-month LIBOR rate.
- A. The floor coupon rate of 0% occurs when r = 7.2%
- B. The cap coupon rate of 15.5% occurs when r = 1%
- C. The cap coupon rate of 18% occurs when r = 5.5%
Answer: A
Explanation:
The coupon rate specification indicates that for all values of 6-month LIBOR greater than
7 .2%, the coupon rate = Maximum [18% - 2.5*r or 0] = 0. The cap coupon rate is 18% when r = 0%.
NEW QUESTION 760
Suppose the quantity of x is measured on the horizontal axis. If the income consumption curve is vertical, then the income elasticity of demand for x is
- A. 0
- B. 1
- C. 2
Answer: C
NEW QUESTION 761
Which statement(s) is/are FALSE?
I). Under the LIFO method of inventory valuation, the ending merchandise inventory would be valued at the purchase price of the most recent purchases.
II). During extended periods of rising prices, the FIFO method of inventory valuation will yield a higher cost of goods sold and a lower ending merchandise inventory, when compared to the LIFO method of inventory valuation.
III). The accounting principle of consistency prohibits any changes in the method of inventory valuation.
IV). JIT means just in time and is an inventory method where the raw materials for production are purchased in smaller quantities after orders have been taken for the manufactured products.
- A. I, II and IV.
- B. II, III and IV.
- C. I, II and III.
Answer: C
Explanation:
I). LIFO means 'last-in, first-out'--the cost of the last items purchased are charged to the most recent sales. The merchandise inventory at the end of the year is considered to be from the oldest purchases.
II). The FIFO method will result in a lower cost of goods sold and a higher ending merchandise inventory
(valued at first-in costs).
III). While consistency should be maintained, legitimate changes are allowed. However, the nature, justification, and effect of the change on net income must be disclosed (full-disclosure principle).
IV). JIT inventory systems require reliable suppliers and efficient handling and shipping of materials.
NEW QUESTION 762
Technical analysts believe that speculative trading peaks at market ______.
- A. peaks
- B. troughs
- C. mid-points
Answer: A
Explanation:
Technicians consider speculative activity high when the ratio of OTC volume on the
NASDAQ system to NYSE volume gets to 90 percent or more. Speculative trading typically peaks at market peaks.
NEW QUESTION 763
Which is not true of the accounting procedures or the accounting rules applied to intangible assets?
- A. Accumulated amortization accounts are maintained for intangibles.
- B. Patents have a legal life of 17 years.
- C. Generally, the straight-line method of amortization is used on intangible assets.
Answer: A
Explanation:
Accumulated amortization accounts are not maintained for intangible assets. The expired portion of the cost of the asset is credited directly to the asset account, just like the treatment for prepaid assets.
NEW QUESTION 764
Assume that in Canada the opportunity cost of producing 1 television set is 2 bushels of wheat.
Assume that in the U.S. the opportunity cost of producing 1 bushel of wheat is 2 television sets. All other things being equal:
- A. The U.S. should import wheat and export televisions.
- B. Canada should import wheat and export televisions.
- C. The U.S. should import both televisions and wheat.
Answer: A
Explanation:
Since the opportunity cost of producing a television set in the U.S. (1/2 bushel of wheat) is less than the opportunity cost of producing a television set in Canada (2 bushels of wheat), the U.S. has a comparative advantage in television production.
NEW QUESTION 765
If a stock's price rises while its volume declines, technicians usually interpret this as a signal that:
- A. Long positions should be maintained.
- B. The opening and closing prices will be reversed.
- C. The trend is starting to lose its legs and may soon end.
Answer: C
Explanation:
The volume information can be crucial for some technicians. In this case the demand for the stock at higher price will cease soon.
NEW QUESTION 766
According to the Framework for the Preparation and Presentation of Financial Statements, the objective of financial statements is fair presentation of the company's
I). financial position.
II). financial performance.
III). cash flows.
IV). earning power.
- A. I and II.
- B. I, II and III.
- C. All of them.
Answer: B
Explanation:
The objective of the fair representation of the company's financial position, financial performance and cash flows.
NEW QUESTION 767
Which of the following statement(s) is/are true?
I). If no errors are made in the daily recording of transactions, adjusting entries are unnecessary at the end of the period.
II). An adjusting entry to recognize wages payable at year-end causes a decrease in total assets.
III). An adjusting entry to recognize that an advance payment from a customer has now been earned will cause an increase in assets.
IV). Adjusting entries to accrue unrecorded expenses such as salaries and interest expense cause an increase in expenses and a corresponding decrease in assets.
- A. None of them.
- B. II and III.
- C. III and IV.
Answer: A
NEW QUESTION 768
When an uptrend reverses twice at roughly the same high price level, a ______ pattern is formed.
- A. top and bottom.
- B. double top.
- C. double bottom.
Answer: B
NEW QUESTION 769
Which of the following statements concerning valuation allowance for deferred tax assets is FALSE?
- A. Realization of a valuation allowance in the future has income and cash flow implications.
- B. Valuation allowance is not a discretionary tool.
- C. A valuation allowance need not be taken even if the tax rate changes as they may not be reversible in the future.
Answer: B
Explanation:
The timing and amount of valuation allowance is discretionary and a management may use it to manipulate earnings.
NEW QUESTION 770
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