[Jan 25, 2022] CFA-Level-I Dumps PDF and Test Engine Exam Questions - GuideTorrent
Verified CFA-Level-I exam dumps Q&As with Correct 2200 Questions and Answers
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NEW QUESTION 1159
An uptrend is when a security makes ____ lows and _____ highs.
- A. higher, higher.
- B. higher, lower.
- C. lower, higher.
Answer: A
Explanation:
An uptrend for a security is when the price goes to higher highs and higher lows.
NEW QUESTION 1160
Financial ratios are used in all of the following areas EXCEPT:
- A. bankruptcy analysis.
- B. economic forecasting.
- C. stock valuation.
Answer: B
Explanation:
Financial ratios are used to determine a company's bankruptcy analysis, stock valuation, risks and bond rating.
NEW QUESTION 1161
Which of the following is a measure of a firm's liquidity?
- A. Cash Ratio.
- B. ROE
- C. Equity Turnover.
Answer: A
Explanation:
Equity turnover and ROE are measures of a company's operating performance.
NEW QUESTION 1162
The lifetime of a 2-volt non-rechargeable battery in constant use has a normal distribution with a mean of 516 hours and a standard deviation of 20 hours. Ninety percent of all batteries have a lifetime less than
- A. 517.28 hours.
- B. 541.60 hours.
- C. 536.00 hours.
Answer: B
Explanation:
The z-value corresponding to the proportion 0.9000 is 1.28. We need to use the formula x = u + z o, where z = 1.28 to get the correct answer, or x = 516 + 1.28 x 20 = 541.6.
NEW QUESTION 1163
A recent annual report included the following information:
Note 5: Assets placed in service before January 1, 1997, are depreciated using an accelerated method.
Assets placed in service in 1997 will be depreciated using the straight-line method of depreciation. This change in accounting principle is being made to reflect improvements in the design and flexibility of manufacturing machinery and equipment and improvements in maintenance practices. These improvements have resulted in more uniform productive capacities and maintenance costs over the useful life of an asset. Straight-line is preferable in these circumstances. The change is expected to improve
1 997 after-tax results by $80 to $100 million. The change was not made for income tax reporting purposes.
Which of the following would generally be true as a result of this change?
- A. return on assets would decrease
- B. cash flows would increase
- C. return on assets would increase
Answer: C
Explanation:
Income will increase because less depreciation is being taken out of income. The assets will gradually decrease. Both effects together will increase the return on assets.
NEW QUESTION 1164
A discrete probability distribution is the same as:
- A. a relative frequency distribution.
- B. a collection of all possible outcomes of an experiment.
- C. an absolute frequency distribution.
Answer: A
Explanation:
The relative probability distribution of a set shows the relative frequency in each category in which the observation set is subdivided i.e. it shows the percentage of the observation set lying in each class. This also represents the probability distribution of the observation set.
NEW QUESTION 1165
Big Toys, Inc. has a 34 day inventory period and a 23 day receivables period. The company purchases the toys which it sells from The Toy Co. under a 45 day payment arrangement. The Toy Co:
- A. receives payment for each shipment prior to Big Toys reselling the toys in the shipment.
- B. can be assured that Big Toys will be able to convert its inventory into cash before having to pay for that inventory.
- C. finances a portion of Big Toys' receivables period.
Answer: C
NEW QUESTION 1166
A consistent estimator is an estimator
- A. where no other unbiased estimator of the same parameter has a sampling distribution with smaller variance.
- B. for which the probability of accurate estimates increases as sample size increases.
- C. where the expected value of the estimate equals the population parameter.
Answer: B
Explanation:
A consistent estimator is an estimator for which the probability of accurate estimates increases as sample size increases.
NEW QUESTION 1167
B1 is a consumer budget constraint.
Now the line moves to B2. This indicates that:
- A. The price of glasses has dropped.
- B. The price of wine has dropped.
- C. The consumer's budget has increased.
Answer: B
Explanation:
The budget line rotates out because the consumer can buy more wine.
NEW QUESTION 1168
Assume the correct current ratio is bigger than 1. If purchase (on account) is overstated by $3,000 and the ending inventory is overstated by $3,000, the current ratio is ______ and the working capital is
_ _____.
- A. overstated, not affected.
- B. understated, not affected.
- C. not affected, overstated.
Answer: B
Explanation:
EI = BI + purchase - COGS. If both purchase on account and ending inventory are overstated by the same amount, the current ratio will be understated (current ratio = current assets / current liabilities, in which both numerator and the denominator are overstated, but the ratio will belowered since it is bigger than 1). However, the working capital which equals current assets - current liability should be unaffected.
NEW QUESTION 1169
A 1993 survey conducted by the local paper in Columbus, Ohio, one week before the election day, asked voters who they would vote for City Attorney. The goal was to predict the outcome of the upcoming election. Thirty-seven percent said they would vote for the Democratic candidate. On election day, 41% actually voted for the Democratic candidate. The number 37% is a
- A. statistic.
- B. parameter.
- C. sample.
Answer: A
Explanation:
A statistic describes a sample. In this case, the sample would be those who responded to the survey. The population would be all individuals who actually vote on election day because the goal of the study was to predict the results of the actual election. The number 37% describes a characteristic of the sample.
NEW QUESTION 1170
Which financial statement provides information about a company's operating, investing, and financing activities?
- A. Statement of Cash Flows.
- B. Income Statement.
- C. Balance Sheet.
Answer: A
Explanation:
The statement of cash flows shows how a company's operating, financing, and investing activities have affected cash flow during a period of time.
NEW QUESTION 1171
At higher levels of output, total cost tends to:
- A. decrease at an increasing rate.
- B. increase at an increasing rate.
- C. increase at a decreasing rate.
Answer: B
Explanation:
At higher levels of output, total cost is increasing at an increasing rate because of the law of diminishing marginal product, which implies increasing marginal cost.
NEW QUESTION 1172
For T-bills (no risks), the risk aversion coefficient:
- A. is always positive.
- B. can be positive, 0, or negative.
- C. is always 0.
Answer: B
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 1173
Which of the following is the best explanation for diseconomies of scale?
- A. diminishing returns
- B. coordination problems
- C. indivisibilities
Answer: B
Explanation:
Diseconomies of scale occur when long-run average cost is rising. A good explanation for this is coordination problems resulting from the difficulty of managing large organizations. Answer C
(diminishing returns) is a short-run problem that comes from the fact that all inputs cannot be adjusted, and is thus unrelated to diseconomies of scale.
NEW QUESTION 1174
If the spot Japanese yen were sold at $0.007960, whereas the 180-day forward yen were priced at
$ 0.008184, what would be the forward premium annualized?
- A. 5.63%
- B. 2.82%
- C. 5.47%
Answer: A
Explanation:
Forward premium annualized = [(0.008184 -0.007960)/0.007960] x 360/180 = 0.0563 =
5 .63%
NEW QUESTION 1175
In what sense is the mean of any distribution the "best guess" of the score of any single individual selected at random from the group?
I). In a series of such guesses, the sum of the errors in one direction will balance the sum of the errors in the other direction.
II). The mean score will occur more often than any other single score.
III). The chances are 50-50 that any individual will be above or below the mean.
- A. I only.
- B. I and II.
- C. II and III.
Answer: A
Explanation:
II and III are not necessarily true with distributions other than normal distributions.
NEW QUESTION 1176
The following information pertains to Bender, Inc., for last year:
Net income of $25 million
*
1 million shares of $10 par value preferred stock outstanding paying a 10% dividend
*
50 million shares of common stock outstanding at the beginning of the year
*
Issued an additional 5 million shares of common stock 6 months ago
*
What is Bender Inc.'s basic earnings per share (EPS)?
- A. $.457.
- B. $.476.
- C. $.436.
Answer: A
Explanation:
50,000,000 common shares x 12months = 600,000,000 5,000,000 common shares x 6 months = 30,000,000 = 630,000,000 630,000,000/12 = 52,500,000 average shares [$25,000,000(NI) -
$ 1,000,000(preferred dividends)]/52,500,000 shares = 24,000,000/52,500,000 = 0.457
NEW QUESTION 1177
Select the three most useful types of discussions regarding the impact of recently issued accounting changes in management's discussion.
I). The standard does not apply.
II). The standard will have no material impact.
III). Management is still evaluating the impact.
IV). The impact of adoption is discussed.
- A. I, II and III.
- B. II, III and IV.
- C. I, II and IV.
Answer: C
Explanation:
III creates some uncertainty about whether the change might materially affect the company.
IV would be the most meaningful one.
NEW QUESTION 1178
If there are 4 operating cycles within one year for a company, which time frame should be used to categorize current assets?
- A. 1 year.
- B. Either 1 quarter or 1 year is ok.
- C. 1 quarter.
Answer: A
Explanation:
Current assets are cash and other assets expected to be converted into cash, sold, or consumed either in one year or in the operating cycle, whichever is longer.
NEW QUESTION 1179
Which of the following is correct regarding accounting changes?
I). They generally do not have cash flow consequences.
II). The cumulative impact on prior period earnings is reported net of tax after extraordinary items and discontinued operations on the income statement.
III). Footnote disclosure is required of the impact of the change on current period operations.
- A. II and III.
- B. I, II and III.
- C. I and III.
Answer: A
Explanation:
The following relates to accounting changes:
The cumulative impact on prior period earnings is reported net of tax after extraordinary items and
*
discontinued operations on the income statement.
Footnote disclosure is required of the impact of the change on current period operations.
*
NEW QUESTION 1180
In order to calculate a bond's present value we use the
- A. yield to maturity.
- B. realized yield.
- C. current yield.
Answer: A
NEW QUESTION 1181
Use the following data from Delta's common size financial statement to answer the question:
Earnings after taxes = 18% Equity = 40% Current assets = 60% Current liabilities = 30% Sales = $300
Total assets = $1,400. What is Delta's total-debt-to-equity ratio?
- A. 1.0.
- B. 1.5.
- C. 2.5.
Answer: B
Explanation:
If equity = 40%, debt must = 60%, thus 60/40 = 1.5
NEW QUESTION 1182
An analyst has collected the following data about a firm:
Receivables turnover = 10 times Inventory turnover = 8 times Payables turnover = 12 times
What is the average receivables collection period, the average inventory processing period, and the average payables payment period respectively? (Assume 360 days in a year)
- A. 45 days: 36 days: 30 days.
- B. 33 days: 30 days: 20 days.
- C. 36 days: 45 days: 30 days.
Answer: C
Explanation:
Receivables collection period = 360/10 = 36 days Inventory processing period = 360/8 = 45 days Payables payment period = 360/12 = 30 days
NEW QUESTION 1183
Which of the following items would require the recognition of a deferred tax asset or liability?
I). interest expense incurred on funds borrowed to acquire tax-exempt state government bonds
II). bad debts expense determined by the direct write-off approach for tax purposes, but calculated by the allowance approach for financial accounting purposes
III). interest revenue received from government bonds
- A. II only.
- B. III only.
- C. I and II.
Answer: A
Explanation:
The only one that is a temporary difference is the difference in the accounting for bad debts expense. The others are permanent differences.
NEW QUESTION 1184
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