CFA Investment Foundations Mock
Exam Questions
Proprietary trading is maximum possibly done by way of:
sellers.
Brokers.
Agreement sellers. - ANSDealers,
Dealers act as principals, so they are deemed proprietary buyers. Dealers exchange on behalf
of their personal accounts and use their personal capital to make markets. B is inaccurate.
Brokers arrange offers between the consumers and the dealers. They do now not change for
their own bills. C is inaccurate. Settlement retailers provide offerings to clean and settle offers
when they had been negotiated.
Q. Globalisation in the investment enterprise is related to the developing tendency of traders:
to look out of doors their neighborhood marketplace for funding opportunities.
To opt to hedge the risks of overseas funding, together with currency hazard.
In smaller nations to compete more effectively with those in large international locations - ANSto
look outdoor their nearby market for investment opportunities.
A is correct. Globalisation happens as traders broaden a developing tendency to appearance
outside their neighborhood markets for better portfolio diversification and better returns. B is
inaccurate. The selection to hedge diverse risks will depend upon the character investor's needs
and ideals, no longer the quantity of globalisation. C is wrong. Globalisation offers all investors
extra opportunities however does now not favour one institution over any other.
The goal of all financial structures is to:
effectively allocate scarce assets to their most productive uses.
Produce sufficient goods and services to meet the desires of all consumers.
Support government spending on public services, together with schooling, defence, and
infrastructure. - ANSefficiently allocate scarce assets to their most effective makes use of
The goal of all financial systems is the efficient allocation of scarce assets to their most
productive makes use of. People have an unlimited desire for goods and offerings, however
resources are confined. Economic systems must deal with three questions: (1) What ought to be
produced? (2) How need to or not it's produced? (three) Who must receive what's produced?
The intention is to reply these questions in a way that pleasant satisfies consumers' desires
,An man or woman who enables customers and sellers discover and change with one another is
a(n):
dealer.
Supplier.
Auditor. - ANSBroker
Securities regulations are created by:
legislative our bodies.
Character investors.
Authorities agencies. - ANSGovernment Agencies
The CFA Institute Code of Ethics calls for participants to:
shield customers' hobbies at all times and in all situations.
Inspire competitors to increase their degrees of competence.
Ensure funding tips are comparable across an enterprise. - ANSencourage competitors to
increase their ranges of competence.
An employee is assigned a complicated undertaking by her manager however believes she
does now not have the technical skills to carry it out. The worker must:
refuse to perform the project.
Perform the paintings as satisfactory as she can.
Get a co-worker to do it and take credit score for the paintings. - ANSRefuse to carry out the
challenge
Investment advisers have an moral obligation to:
protect their own hobbies.
Workout independent judgment.
Sell products with the highest charges. - ANSExercise impartial judgment
Based on the CFA Institute Standards of Practice, investment advisers should control a client's
funding portfolio the equal way they might manipulate:
their very own property.
Other purchaser debts.
The account if controlled by way of a competitor. - ANSTheir personal assets
During a job interview, a potential corporation defined the CFA Institute Code of Ethics as "a
fixed of ideas organising guidelines governing moral behaviour required of funding professionals
,toward their clients and employers". Does this description completely capture the Code of
Ethics' requirement to act in an ethical manner?
Yes
No, the Code of Ethics also requires ethical behaviour whilst handling potential customers
No, the Code of Ethics also requires ethical interplay with all capital marketplace individuals -
ANSNo, the code of ethics also require moral interaction with all capital market members
Regulators frequently are looking for public consultation prior to the implementation of recent
policies so that you can:
teach customers and carrier vendors on the brand new regulations.
Improve the very last policies through challenge a cost-advantage analysis.
Ensure that the new policies are favourable to the ones possibly to be affected. - ANSImprove
the regulations through project a fee-benefit analysis
Regulations prohibiting the front running are sorts of:
buying and selling guidelines.
Operational rules.
Income exercise regulations. - ANSTrading regulations
Regulators help capital markets do all of the following except:
reduce funding hazard.
Allocate capital to efficient use.
Make certain investors are handled similarly. - ANSEnsure traders are treated equally
Net capital policies are installed vicinity to prevent all of the following except:
global monetary contagion.
Losses experienced by way of corporations.
The usage of immoderate leverage. - ANSlosses skilled by means of corporations
The strategies by means of which regulations are advanced:
are comparable across the globe.
Range extensively from casual to formal.
Are standardised across the diverse jurisdictions within a country. - ANSVary extensively from
informal to formal
A shop owner currently grew to become down a substantial coins provide for his save and the
land on which the store is placed. Although the store owner taken into consideration the provide
to be honest, he wanted to preserve running the commercial enterprise. This 12 months, his
, commercial enterprise has incurred prices for products sold; wages paid to workers, which
include his personal profits; utilities; and assets taxes. When determining the enterprise's
accounting earnings for the period, he is maximum in all likelihood to properly exclude which of
the subsequent:
his own salary.
Belongings taxes.
The possibility value of the land and store. - ANSThe possibility cost of the land and the shop
A company is inside the large shipbuilding enterprise with most of its running prices fixed. The
employer has now not used any debt to finance its operations. The operating leverage for any
such company is maximum in all likelihood:
low.
High.
0. - ANSHigh
The notion of scarce economic sources:
applies best to undeveloped nations.
Gives upward thrust to selections decided with the aid of opportunity prices.
Applies whilst the quantity of freely to be had goods exceeds the quantity humans desire. -
ANSGive rise to choices determined through opportunity costs
The crowding out effect will maximum possibly result in higher:
tax sales.
Hobby charges.
Non-public investment. - ANSInterest rates
Which of the subsequent moves taken via a imperative bank is satisfactory defined as
expansionary?
Increasing its coverage charge
Purchasing government bonds
Increasing the reserve requirement - ANSPurchasing authorities bonds
A government implements a coverage that encourages clients and groups to boom spending
and investment. Those who benefit from this extra spending, in flip, growth their very own
spending. The mechanism by using which the preliminary growth in spending increases total
spending by a greater quantity is called the:
multiplier effect.
Inflationary impact.
Exam Questions
Proprietary trading is maximum possibly done by way of:
sellers.
Brokers.
Agreement sellers. - ANSDealers,
Dealers act as principals, so they are deemed proprietary buyers. Dealers exchange on behalf
of their personal accounts and use their personal capital to make markets. B is inaccurate.
Brokers arrange offers between the consumers and the dealers. They do now not change for
their own bills. C is inaccurate. Settlement retailers provide offerings to clean and settle offers
when they had been negotiated.
Q. Globalisation in the investment enterprise is related to the developing tendency of traders:
to look out of doors their neighborhood marketplace for funding opportunities.
To opt to hedge the risks of overseas funding, together with currency hazard.
In smaller nations to compete more effectively with those in large international locations - ANSto
look outdoor their nearby market for investment opportunities.
A is correct. Globalisation happens as traders broaden a developing tendency to appearance
outside their neighborhood markets for better portfolio diversification and better returns. B is
inaccurate. The selection to hedge diverse risks will depend upon the character investor's needs
and ideals, no longer the quantity of globalisation. C is wrong. Globalisation offers all investors
extra opportunities however does now not favour one institution over any other.
The goal of all financial structures is to:
effectively allocate scarce assets to their most productive uses.
Produce sufficient goods and services to meet the desires of all consumers.
Support government spending on public services, together with schooling, defence, and
infrastructure. - ANSefficiently allocate scarce assets to their most effective makes use of
The goal of all financial systems is the efficient allocation of scarce assets to their most
productive makes use of. People have an unlimited desire for goods and offerings, however
resources are confined. Economic systems must deal with three questions: (1) What ought to be
produced? (2) How need to or not it's produced? (three) Who must receive what's produced?
The intention is to reply these questions in a way that pleasant satisfies consumers' desires
,An man or woman who enables customers and sellers discover and change with one another is
a(n):
dealer.
Supplier.
Auditor. - ANSBroker
Securities regulations are created by:
legislative our bodies.
Character investors.
Authorities agencies. - ANSGovernment Agencies
The CFA Institute Code of Ethics calls for participants to:
shield customers' hobbies at all times and in all situations.
Inspire competitors to increase their degrees of competence.
Ensure funding tips are comparable across an enterprise. - ANSencourage competitors to
increase their ranges of competence.
An employee is assigned a complicated undertaking by her manager however believes she
does now not have the technical skills to carry it out. The worker must:
refuse to perform the project.
Perform the paintings as satisfactory as she can.
Get a co-worker to do it and take credit score for the paintings. - ANSRefuse to carry out the
challenge
Investment advisers have an moral obligation to:
protect their own hobbies.
Workout independent judgment.
Sell products with the highest charges. - ANSExercise impartial judgment
Based on the CFA Institute Standards of Practice, investment advisers should control a client's
funding portfolio the equal way they might manipulate:
their very own property.
Other purchaser debts.
The account if controlled by way of a competitor. - ANSTheir personal assets
During a job interview, a potential corporation defined the CFA Institute Code of Ethics as "a
fixed of ideas organising guidelines governing moral behaviour required of funding professionals
,toward their clients and employers". Does this description completely capture the Code of
Ethics' requirement to act in an ethical manner?
Yes
No, the Code of Ethics also requires ethical behaviour whilst handling potential customers
No, the Code of Ethics also requires ethical interplay with all capital marketplace individuals -
ANSNo, the code of ethics also require moral interaction with all capital market members
Regulators frequently are looking for public consultation prior to the implementation of recent
policies so that you can:
teach customers and carrier vendors on the brand new regulations.
Improve the very last policies through challenge a cost-advantage analysis.
Ensure that the new policies are favourable to the ones possibly to be affected. - ANSImprove
the regulations through project a fee-benefit analysis
Regulations prohibiting the front running are sorts of:
buying and selling guidelines.
Operational rules.
Income exercise regulations. - ANSTrading regulations
Regulators help capital markets do all of the following except:
reduce funding hazard.
Allocate capital to efficient use.
Make certain investors are handled similarly. - ANSEnsure traders are treated equally
Net capital policies are installed vicinity to prevent all of the following except:
global monetary contagion.
Losses experienced by way of corporations.
The usage of immoderate leverage. - ANSlosses skilled by means of corporations
The strategies by means of which regulations are advanced:
are comparable across the globe.
Range extensively from casual to formal.
Are standardised across the diverse jurisdictions within a country. - ANSVary extensively from
informal to formal
A shop owner currently grew to become down a substantial coins provide for his save and the
land on which the store is placed. Although the store owner taken into consideration the provide
to be honest, he wanted to preserve running the commercial enterprise. This 12 months, his
, commercial enterprise has incurred prices for products sold; wages paid to workers, which
include his personal profits; utilities; and assets taxes. When determining the enterprise's
accounting earnings for the period, he is maximum in all likelihood to properly exclude which of
the subsequent:
his own salary.
Belongings taxes.
The possibility value of the land and store. - ANSThe possibility cost of the land and the shop
A company is inside the large shipbuilding enterprise with most of its running prices fixed. The
employer has now not used any debt to finance its operations. The operating leverage for any
such company is maximum in all likelihood:
low.
High.
0. - ANSHigh
The notion of scarce economic sources:
applies best to undeveloped nations.
Gives upward thrust to selections decided with the aid of opportunity prices.
Applies whilst the quantity of freely to be had goods exceeds the quantity humans desire. -
ANSGive rise to choices determined through opportunity costs
The crowding out effect will maximum possibly result in higher:
tax sales.
Hobby charges.
Non-public investment. - ANSInterest rates
Which of the subsequent moves taken via a imperative bank is satisfactory defined as
expansionary?
Increasing its coverage charge
Purchasing government bonds
Increasing the reserve requirement - ANSPurchasing authorities bonds
A government implements a coverage that encourages clients and groups to boom spending
and investment. Those who benefit from this extra spending, in flip, growth their very own
spending. The mechanism by using which the preliminary growth in spending increases total
spending by a greater quantity is called the:
multiplier effect.
Inflationary impact.
