CFA Investment Foundations with questions and complete rationales
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Course
CFA
Institution
CFA (CFA)
The most effective way to compare investments with the same initial outflow that have different cash flows at different points in time is to determine each investment's
Present Value
Compared with a regular public offering, in a shelf registration, a company:
can sell shares over a longer ...
CFA Investment Foundations with questions and complete rationales
Which of the following parties most likely acts as a custodian and as a monitor? - correct
answer-Depositories
When valuing a fixed-rate bond by using the discounted cash flow approach, the discount
rate used in the valuation is typically the: - correct answer-investor's required rate of return
for the bond
Rebalancing is most likely to be associated with an index that is - correct answer-equal
weighted.
Investment vehicles that use multiple hedge fund managers with the objective of
outperforming the market are known as: - correct answer-fund of funds
The most effective way to compare investments with the same initial outflow that have
different cash flows at different points in time is to determine each investment's - correct
answer-Present Value
Compared with a regular public offering, in a shelf registration, a company: - correct
answer-can sell shares over a longer period of time
One return measure that does not consider the risks taken or the returns achieved by
similar investments is - correct answer-holding-period return
The corporate action most likely taken to mitigate the effects of exercised warrants is: -
correct answer-Share repurchase
The movement of funds through a financial market is most likely a form of - correct answer-
direct finance
, When an investment professional is explaining her obligations as a supervisor, she should
state, "As part of my key obligations, I must: - correct answer-always identify all to whom
my duty of obligation is owed".
Sales Practice Rules may be implemented by regulators to control: - correct answer-
advertising content
The cross-price elasticity of demand for two products is -1.5%. This result indicates that
the two products are: - correct answer-Complements
The demand curve for a good has shifted to the left. The most likely explanation for this
shift is that the price of - correct answer-a substitute has fallen
Average fixed costs will continue to fall if a firm's level of production - correct answer-
following the law of diminishing returns
Which of the following is best described as a coincident economic indicator? - correct
answer-industrial production
Net present value can be used to compare competing investments - correct answer-when
outflows occur at times other than the initial outflow.
The debt securities created and issued under a securitisation are backed by - correct
answer-a pool of other debt securities
Using the discounted cash flow (DCF) approach, the current value of a fixed-rate coupon
bond most likely reflects coupon payments: - correct answer-and principal at maturity
discounted at a rate determined by investors.
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