CFA Investment Foundations Mock Exam Questions And Answers 2022/2023

Proprietary trading is most likely carried out by: dealers. brokers. settlement agents. - Answer- Dealers, Dealers act as principals, so they are deemed proprietary traders. Dealers trade on behalf of their own accounts and use their own capital to make markets. B is incorrect. Brokers arrange deals between the buyers and the sellers. They do not trade for their own accounts. C is incorrect. Settlement agents provide services to clear and settle deals after they have been negotiated. Q. Globalisation in the investment industry is associated with the growing tendency of investors: to look outside their local market for investment opportunities. to prefer to hedge the risks of foreign investment, such as currency risk. in smaller countries to compete more effectively with those in larger countries - Answer- to look outside their local market for investment opportunities. A is correct. Globalisation occurs as investors develop a growing tendency to look outside their local markets for better portfolio diversification and higher returns. B is incorrect. The decision to hedge various risks will depend on the individual investor's needs and beliefs, not the extent of globalisation. C is incorrect. Globalisation gives all investors more opportunities but does not favour one group over another. The goal of all economic systems is to: efficiently allocate scarce resources to their most productive uses. produce enough goods and services to satisfy the desires of all consumers. support government spending on public services, such as education, defence, and infrastructure. - Answer- efficiently allocate scarce resources to their most productive uses The goal of all economic systems is the efficient allocation of scarce resources to their most productive uses. People have an unlimited desire for goods and services, but resources are limited. Economic systems must address three questions: (1) What should be produced? (2) How should it be produced? (3) Who should receive what is produced? The goal is to answer these questions in a way that best satisfies consumers' needs An individual who helps buyers and sellers find and trade with one another is a(n): broker. dealer. auditor. - Ans