Online Access Free CFA-Level-I Practice Test

Which of the following should be classified as financing cash flow?
I). purchase and sale of equity securities of other entities.
II). issuance of equity securities and reacquisition of capital stock.
III). payment of dividend.

• A.I and II.
• B.II and III.
• C.all of them.

When the Federal Reserve lowers the federal funds rate, the quantity of money ____ and the supply of loanable funds ____.

• A.increases; increases
• B.decreases; increases
• C.increases; decreases

The difference between an arithmetic average and a geometric average of returns:

• A.increases as the variability of the returns decreases.
• B.depends on the specific returns being averaged, but is not necessarily sensitive to their variability.
• C.increases as the variability of the returns increases.

Discouraged workers

• A.are workers whose productivities are lower than average workers.
• B.are not working, and not even officially unemployed.
• C.are discouraged because their current employment compensations are low, but they believe deserve higher wages or salaries.

You are studying the finances of a life insurance company. You believe that if Company X generates at least $150 million in earnings this year, they will pay a large amount of stock into a company bonus pool.
If the earnings can fall anywhere from $110 million to $165 million with equal probability, what is the likelihood they will hit the bonus pool target?

• A.26.5%.
• B.27.3%.
• C.27.5%.