CFA Level 1 Exam Sample Questions with ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
verified answers ||\\//||
The feature of a well-functioning investment industry that gives investors the ability to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quickly buy and sell a significant amount of an investment without having a material
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
impact on the price is described as: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A liquidity ||\\//|| ||\\//||
B competitive markets
||\\//|| ||\\//|| ||\\//||
C risk transfer ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//||
According to fundamental ethical and professional principles applicable to the investment ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
industry, which group should have its interests ranked first? ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Clients ||\\//|| ||\\//||
B Employers||\\//|| ||\\//||
C Co-workers ✔✔ A
||\\//|| ||\\//|| ||\\//||
Regulators often seek public consultation prior to the implementation of new regulations in ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
order to:
||\\//|| ||\\//|| ||\\//||
A ensure the new rules are favorable to those likely to be affected
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B educate consumers and service providers on the new rules
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C improve the final rules by undertaking a cost-benefit analysis ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A financial advisory firm that implements internal policies regarding information barriers,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
suitability standards, and restrictions on self-dealing is addressing issues related to which of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
the following types of regulation?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Sales practices rules
||\\//|| ||\\//|| ||\\//|| ||\\//||
B Trading rules
||\\//|| ||\\//|| ||\\//||
,C Disclosure rules ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//||
The best financial statement to use to find information about what a company owns and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
owes others is called the: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A income statement
||\\//|| ||\\//|| ||\\//||
B balance sheet
||\\//|| ||\\//|| ||\\//||
C cash flow statement ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If two variables do not have a strong (linear) relationship, the correlation coefficient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
between the two variables will be closest to: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A0 ||\\//|| ||\\//||
B -1
||\\//|| ||\\//||
C +1 ✔✔ A
||\\//|| ||\\//|| ||\\//||
In contrast to forward contracts, futures contracts:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A trade on organized exchanges
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B have contract sizes tailored to investor needs
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C have negotiable expiration dates ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Which type of private equity strategy is most likely used to finance a start-up company?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Growth equity
||\\//|| ||\\//||
B Buyout
||\\//|| ||\\//||
C Venture capital ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//||
In commercial real estate investment, the amount derived from discounting future cash
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
flows of lease and rental payments plus capital appreciation represents the value of the:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A asset
||\\//|| ||\\//||
,B equity ||\\//|| ||\\//||
C liability ✔✔ A
||\\//|| ||\\//|| ||\\//||
The type of bank that is exclusively owned by its members is a:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A savings and loan bank
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B commercial bank
||\\//|| ||\\//|| ||\\//||
C mutual bank ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//||
A form of pension plan in which the participant has some ability to determine how pension
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
contributions are invested is described as a(n):
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A defined contribution plan
||\\//|| ||\\//|| ||\\//|| ||\\//||
B endowment plan
||\\//|| ||\\//|| ||\\//||
C defined benefit plan ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
An investor attempting to replicate a price-weighted index would hold an equal:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A percentage of outstanding shares of each security in the index
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B amount invested in each security in the index
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C number of units (shares) of each security in the index ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
From the standpoint of taxes, investors will benefit from:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A deferring taxes to the future if tax rates will be higher in the future
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B realizing gains via stock repurchases as opposed to receiving the same gains as dividends
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C selling appreciated shares to meet cash needs instead of borrowing against them ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If a decrease in the selling price of a company's only product results in an increase in the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
company's total revenue, the demand for the company's product is: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
, A elastic
||\\//|| ||\\//||
B unit-elastic
||\\//|| ||\\//||
C inelastic ✔✔ A
||\\//|| ||\\//|| ||\\//||
Which of the following actions taken by a central bank is expansionary?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Increasing the reserve requirement
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B The purchase of government bonds
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C Increasing its policy rate ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Which of the following government actions will most likely lead to an increase in the level
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
of aggregate demand? A reduction in:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A transfer payments
||\\//|| ||\\//|| ||\\//||
B public spending on social goods and infrastructure
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C the capital gains tax ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If Mexico is running a large current account deficit with Canada, which of the following
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
will most likely occur? ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Canada will reduce its imports from Mexico
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B The Mexican peso will depreciate relative to the Canadian dollar
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C There will be an increase in Canadian exports to Mexico ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If a company is liquidated, proceeds from asset sales are distributed to common
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
shareholders: ||\\//||
A before unsecured debt investor and preferred shareholder, claims are paid
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B after secured debt investor and preferred shareholder, claims are paid
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C after preferred shareholder claims are paid but before unsecured debt investor claims are
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
paid ✔✔ B ||\\//|| ||\\//||
verified answers ||\\//||
The feature of a well-functioning investment industry that gives investors the ability to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
quickly buy and sell a significant amount of an investment without having a material
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
impact on the price is described as: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A liquidity ||\\//|| ||\\//||
B competitive markets
||\\//|| ||\\//|| ||\\//||
C risk transfer ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//||
According to fundamental ethical and professional principles applicable to the investment ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
industry, which group should have its interests ranked first? ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Clients ||\\//|| ||\\//||
B Employers||\\//|| ||\\//||
C Co-workers ✔✔ A
||\\//|| ||\\//|| ||\\//||
Regulators often seek public consultation prior to the implementation of new regulations in ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
order to:
||\\//|| ||\\//|| ||\\//||
A ensure the new rules are favorable to those likely to be affected
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B educate consumers and service providers on the new rules
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C improve the final rules by undertaking a cost-benefit analysis ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A financial advisory firm that implements internal policies regarding information barriers,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
suitability standards, and restrictions on self-dealing is addressing issues related to which of ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
the following types of regulation?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Sales practices rules
||\\//|| ||\\//|| ||\\//|| ||\\//||
B Trading rules
||\\//|| ||\\//|| ||\\//||
,C Disclosure rules ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//||
The best financial statement to use to find information about what a company owns and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
owes others is called the: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A income statement
||\\//|| ||\\//|| ||\\//||
B balance sheet
||\\//|| ||\\//|| ||\\//||
C cash flow statement ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If two variables do not have a strong (linear) relationship, the correlation coefficient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
between the two variables will be closest to: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A0 ||\\//|| ||\\//||
B -1
||\\//|| ||\\//||
C +1 ✔✔ A
||\\//|| ||\\//|| ||\\//||
In contrast to forward contracts, futures contracts:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A trade on organized exchanges
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B have contract sizes tailored to investor needs
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C have negotiable expiration dates ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Which type of private equity strategy is most likely used to finance a start-up company?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Growth equity
||\\//|| ||\\//||
B Buyout
||\\//|| ||\\//||
C Venture capital ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//||
In commercial real estate investment, the amount derived from discounting future cash
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
flows of lease and rental payments plus capital appreciation represents the value of the:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A asset
||\\//|| ||\\//||
,B equity ||\\//|| ||\\//||
C liability ✔✔ A
||\\//|| ||\\//|| ||\\//||
The type of bank that is exclusively owned by its members is a:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A savings and loan bank
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B commercial bank
||\\//|| ||\\//|| ||\\//||
C mutual bank ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//||
A form of pension plan in which the participant has some ability to determine how pension
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
contributions are invested is described as a(n):
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A defined contribution plan
||\\//|| ||\\//|| ||\\//|| ||\\//||
B endowment plan
||\\//|| ||\\//|| ||\\//||
C defined benefit plan ✔✔ A
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
An investor attempting to replicate a price-weighted index would hold an equal:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A percentage of outstanding shares of each security in the index
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B amount invested in each security in the index
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C number of units (shares) of each security in the index ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
From the standpoint of taxes, investors will benefit from:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A deferring taxes to the future if tax rates will be higher in the future
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B realizing gains via stock repurchases as opposed to receiving the same gains as dividends
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C selling appreciated shares to meet cash needs instead of borrowing against them ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If a decrease in the selling price of a company's only product results in an increase in the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
company's total revenue, the demand for the company's product is: ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
, A elastic
||\\//|| ||\\//||
B unit-elastic
||\\//|| ||\\//||
C inelastic ✔✔ A
||\\//|| ||\\//|| ||\\//||
Which of the following actions taken by a central bank is expansionary?
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Increasing the reserve requirement
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B The purchase of government bonds
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C Increasing its policy rate ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Which of the following government actions will most likely lead to an increase in the level
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
of aggregate demand? A reduction in:
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
A transfer payments
||\\//|| ||\\//|| ||\\//||
B public spending on social goods and infrastructure
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C the capital gains tax ✔✔ C
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If Mexico is running a large current account deficit with Canada, which of the following
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
will most likely occur? ||\\//|| ||\\//|| ||\\//|| ||\\//||
A Canada will reduce its imports from Mexico
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B The Mexican peso will depreciate relative to the Canadian dollar
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C There will be an increase in Canadian exports to Mexico ✔✔ B
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
If a company is liquidated, proceeds from asset sales are distributed to common
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
shareholders: ||\\//||
A before unsecured debt investor and preferred shareholder, claims are paid
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
B after secured debt investor and preferred shareholder, claims are paid
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
C after preferred shareholder claims are paid but before unsecured debt investor claims are
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
paid ✔✔ B ||\\//|| ||\\//||
