CFA CFA-Level-I Daily Practice Exam New 2021 Updated 2200 Questions
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How to study the CFA CFA-Level-I: CFA Institute CFA Level I Chartered Financial Analyst Exam
There are two main types of tools for preparing for CFA Level 1 qualification exams. First, there are study guides and books that are detailed and suitable for building information from the ground up. Then there are video tutorials and lectures that can somehow ease the pain of training and are comparatively less tiring for some applicants, but they take time and concentration from learning. Smart candidates who want to build a strong base on all exam topics and relevant technology normally combine video lectures with study guides to reap the benefits of both, but, as often ignored by most candidates the CFA Level 1 practice exams, there is one vital training method. As an aspiring or active investor, you need the expertise and experience to succeed in a highly competitive industry. The CFA programme is built to provide you with the kind of experience and real world know-how to carry out your job analysis. If you are an intern, a worker, a transitional occupation or an investment professional, the CFA programme gives you a path to advance and accomplish your professional objectives. The CFA Program is a three-part review that examines the basics of investing tools, asset assessment, portfolio management and wealth planning. The CFA Program is mostly completed for people of administrative, accounting, economic or commercial backgrounds. Holders of the CFA charter shall be entitled to use the CFA classification until completion, application and approval of the curriculum by the CFA Institute. CFA charter members are eligible to work in wealth management, risk management, wealth control, and more in senior and executive roles. CFA Level 1 practice test is the best start towards understanding the concepts of examination.
How to book CFA CFA-Level-I: CFA Institute CFA Level I Chartered Financial Analyst Exam
You must follow these steps to apply for CFA Level 1:
- Go to the Official Site CFA Level 1
- Carefully read the directions
- Follow the steps mentioned
- Apply for the CFA level 1
NEW QUESTION 309
An investor wants to buy a stock which is trading at $22 now. The investor doesn't want to pay more than $20 for the stock, the investor can place a ______.
- A. a limit order to buy the stock at $20 or better.
- B. a stop-buy order to buy the stock at $20.
- C. a stop-sell order to buy the stock at $20.
Answer: A
Explanation:
By entering a limit order rather than a market order, the investor will not buy the stock at a higher price, but, may get fewer shares than he wants or not get the stock at all.
NEW QUESTION 310
You have received $125 today. You will invest the money at a rate of 6% per year. How much will your investment have increased to by the end of 7 years?
- A. 185.97
- B. 187.95
- C. 167.51
Answer: B
Explanation:
7
FV=(125)(1.06) = 187.95
NEW QUESTION 311
For a risk-neutral investor the risk aversion coefficient A is:
- A. positive.
- B. zero.
- C. negative.
Answer: B
Explanation:
Risk-neutral investors would maximize return irrespective of risk. They are indifferent to risk.
They only analyze return when making investment decisions.
NEW QUESTION 312
Your company purchased $10,000 worth of inventory on January 2nd on credit. The terms of the sale are 3/15 net 45. What is the effective annual interest rate if you pay the full amount in 35 days?
- A. 74.3%
- B. 28%.
- C. 37.6%.
Answer: A
Explanation:
(1 + 0.03/0.97)(365/20) -1 = 0.7435
NEW QUESTION 313
The significance level in hypothesis testing refers to the probability that we will:
- A. Accept the alternative when it is true.
- B. Fail to reject the null when it is false.
- C. Reject the null when it is true.
Answer: C
Explanation:
Note that the significance level is the same as the probability of making a Type I error. A
Type I error refers to the event that we will reject the null when, in fact, it is true. Clearly, lower significance levels are better, all else equal.
NEW QUESTION 314
An real estate investment project offers projected net operating income of $43,500 per year.
Assuming a capitalization rate of 15%, the fair market value according to the income approach would be closest to:
- A. $29,000
- B. $290,000
- C. $625,000
Answer: B
Explanation:
The income approach would estimate the market value to be NOI/k = $43,500/.15 =
$ 290,000.
NEW QUESTION 315
A cash dividend, compared to a stock dividend, would most likely result in a ______ debt / equity ratio and a ______ current ratio.
- A. higher, lower.
- B. lower, lower.
- C. higher, higher.
Answer: A
Explanation:
A cash dividend would decrease stockholders' equity, increasing the debt/equity ratio. It would also reduce cash, decreasing the current ratio.
NEW QUESTION 316
Which statement is true?
- A. M-square should give us rankings that are identical to those of the Jensen's Alpha.
- B. Sharpe ratio cannot be applied to risk-free assets.
- C. Portfolios with identical total risk but different systematic risk will be rated the same using Treynor ratio.
Answer: B
Explanation:
A is true. The zero standard deviation of such assets cannot be used as the denominator. B is false. Remember that the Treynor ratio uses beta to measure risk. C is false. M-square uses total risk while Jensen's alpha uses beta.
NEW QUESTION 317
Points under the capital allocation line are ______ by investors.
- A. desirable but not achievable.
- B. achievable but not desirable.
- C. both desirable and achievable.
Answer: B
Explanation:
Investors can get a higher return for the same risk by moving up the capital allocation line.
NEW QUESTION 318
Banks are required by law to keep on hand to back up its deposits a minimum reserve of their checking deposits. This reserve is known as:
- A. borrowed reserves.
- B. required reserves.
- C. excess reserves.
Answer: B
Explanation:
Excess reserves are actual reserves that exceed the legal requirement.
NEW QUESTION 319
If the number of days in a 92-day summer period in which a thunderstorm occurred is 28 then a 90% confidence interval for the percentage of days in summer that have thunderstorms, p, is ______(to nearest 0.1%).
- A. 22.5% p 38.3%
- B. 21.0% p 39.8%
- C. 25.6% p 35.2%
Answer: A
Explanation:
The confidence interval is p' - E p p' + E.
Let x count the number of days with thunderstorms,
p' is x/n = 28/92 = 0.304. The computation of E is shown at the top right. So, E = 0.079 and the confidence interval is 22.5% p 38.5%.
NEW QUESTION 320
For the hypothesis test below, the test value is ______.
- A. -0.04
- B. -0.577
- C. 0.577
Answer: B
Explanation:
The test value for the test of proportions is shown below.
NEW QUESTION 321
A bond is currently selling for $91.42. It is a 7% coupon bond, with payments made semiannually, yielding 8.5% with 8 years remaining to maturity. If yields were to increase by 1.5% immediately, what would this bond sell for?
- A. $83.74
- B. $101.74
- C. $100
Answer: A
Explanation:
N=16, I/Y=5, PMT=3.5, FV=100, PV=?=83.74
NEW QUESTION 322
Assume the following information about an equally-weighted index comprised of 3 stocks, A, B and C
Security | Price (Beginning) | Price (End) | Total Dividends A | 5 | 6 | 1 B | 8| 7 | 0 C | 10 | 15 | 2
The price return of the index is:
- A. 18.8%.
- B. 32.5%.
- C. 19.2%.
Answer: C
Explanation:
The price return of A: (6-5) / 5 = 20%. The price return of B: (7-8) / 8 = -12.5%. The price return of C: (15 - 10)/10 = 50%. Since the index is equally weighted, the price of the index is (1/3) 20% +
(1/3) (-12.5%) + (1/3) 50% = 19.2%.
NEW QUESTION 323
A GDP-weighted multi-market index is essentially a ______ index.
- A. price weighted.
- B. fundamentally weighted.
- C. market-capitalization weighted.
Answer: B
Explanation:
Such an index weights each country in the overall index in proportion to its relative GDP.
NEW QUESTION 324
Consider two bonds, A and B.
They are both issued by the same corporate firm. They both have the
same maturity, seniority, and coupon. The only difference between the two bonds is that A is callable and
B is not. Which of the following most likely best describe the relationship between A and B
- A. Bond B will have a lower price than bond A
- B. Bond A will have a higher yield than bond B
- C. Bond A will have a lower yield than bond B
Answer: B
Explanation:
Both bonds are identical except of the cal option embedded in bond A.
The option is granted
to the issuer by the investors. As compensation, the investors receive a higher yield.
NEW QUESTION 325
Which of the following is correct?
- A. If the discount rate increases, the quantity required to be sold for accounting break even increases.
- B. Accounting breakeven quantity will increase with increase in fixed costs.
- C. Accepting a project that has accounting breakeven will leave the value of a firm unchanged.
Answer: B
Explanation:
Accounting breakeven quantity = (FC + Depre) / (P - VC)Accounting breakeven implies the project will have negative NPV and hence decrease value of the firm.
NEW QUESTION 326
A securities analyst is preparing a list of questions to ask when paying a personal visit to a company whose stock is publicly traded. Which of the following should not be on the list?
I). Does the company plan new financing, and if so, what kind?
II). What do you expect earnings per share to be for the full year?
III). Are new acquisitions being considered?
IV). What has been the firm's ratio of debt to equity over the past three years?
- A. IV only.
- B. I and IV.
- C. II and III.
Answer: A
NEW QUESTION 327
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