2023 Correct Practice Tests of CFA-Level-I Dumps with Practice Exam [Q40-Q60]

NO.40 Details of changes in accounting principles for depreciation are found

NO.41 Journalizing is performed by transferring information from the

NO.42 For a bond to earn the yield to maturity, yield to first call, or yield to first par call the bond is assumed to be

NO.43 BWT, Inc. shows the following data in its financial statements at the end of the year. Assume all securities were outstanding at the beginning of the year:
6.125% convertible bond, convertible into 33 shares of common stock. Issue price $1,000, 100
*
bonds outstanding.
6.25% convertible preferred stock, $100 par, 2,315 shares outstanding. Convertible into 3.3
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shares of common stock, Issue price $100
8% convertible preferred stock, $100 par, 2,572 shares outstanding. Convertible into 5 common
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shares, Issue price $80
9,986 warrants are outstanding with an exercise price of $38. Each warrant is convertible into 1
*
share of common.
Average market price of common is $52.00 per share. Common shares outstanding at the
*
beginning of the year were 40,045.
Net Income for the period was $200,000, while the tax rate was 40%.
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How many new shares had to be issued to facilitate warrant conversion?

NO.44 Sampling error, which can be attributed to the fact that only a sample of values is observed, is

NO.45 Suppose a portfolio manager purchases $2 million of par value of a Treasury inflation protection security. The real rate is 2.6%. Assume that at the end of the first six months the CPI-U is 3.2%. The inflation-adjusted principal at the end of the first six months is

NO.46 The major differences between a warrant and a call option are:
I). Warrants are contracts outside of the firm while options are within the firm
II). Warrants have long maturities while options are usually short maturities
III). Warrant exercise dilutes the value of equity while option exercise does not

NO.47 Under what conditions can a monopolist have potentially lower costs and possibly charge a lower price than would exist if the market were competitive?

NO.48 A company’s quick ratio:

NO.49 Regarding the disclosure requirements for PP&E, which piece of information is required by IFRS but not by U.S. GAAP?

NO.50 Which technical indictor brings together momentum and trend?

NO.51 Which of the following correctly defines the operating cycle?
I). Cash conversion cycle – Accounts payable period.
II). Inventory period + Accounts receivable period.
III). Cash conversion cycle + Accounts payable period.
IV). Inventory period – Accounts receivable period – Accounts payable period.

NO.52 When using the liability method, income tax expense is calculated:

NO.53 Which of the following statements is not correct?

NO.54 The market portfolio M is:

NO.55 All of the following are reported on the income statement net of taxes except
I). extraordinary items.
II). accounting changes.
III). operating income.

NO.56 Which of the following would be a circumstance that would lead to the impairment of a long-term asset?

NO.57 Which of the following will be true for a competitive firm in long-run equilibrium?
I). P = MC
II). ATC = MC
III). P = ATC

NO.58 Your supervisor has asked you to increase trading volume in all discretionary accounts because he wants to increase revenues for the firm. You believe that this would be inappropriate for most of your clients. You should

NO.59 When an uptrend reverses twice at roughly the same high price level, a ______ pattern is formed.

NO.60 Which of the following statements regarding individual and institutional investors is/are incorrect?
I). Individuals define risk as “losing money”, while institutions view risk as variance (or standard deviation) of returns.
II). Individuals are categorized according to their personalities and unique circumstances, whereas institutions are categorized by the investment characteristics of those that have a beneficial interest in the portfolios of pension funds, endowment funds, banks, insurance companies and mutual funds.
III). Individuals are defined financially by their assets and goals (particularly as they related to their life cycle), while institutions are typically concentrated within precise asset and liability parameters.
IV). Institutions have great flexibility in selecting their investments, whereas individuals are managed and regulated by ERISA (Employee Retirement Income Security Act) as well as other legal constraints.