Free Access CFA.CFA-Level-I.v2023-07-10.q797 Practice Test (Page 92)

Question 451

Which one of the following requirements will not help to ensure the fair treatment of brokerage firm clients when a new investment recommendation is made?

A.Limit the number of people in the firm who are aware in advance that a recommendation is to be disseminated.

B.Establish procedures to ensure that institutional clients are informed of the new recommendation prior to smaller individual accounts.

C.Monitor the trading activities of firm personnel.

Question 452

Which of the following statements concerning the percentage-of-completion and completed-contract methods is CORRECT?

A.The completed contract and percentage of completion methods produce the same cash flow statements prior to completion of the contract.

B.The completed contract method produces greater net income during the period of construction than the percentage-of completion method.

C.The percentage of completion method produces lower liabilities and greater assets than the completed contract method.

Question 453

In a perfectly competitive market:

A.price does more of the adjusting in the long run and quantity does more of the adjusting in the short run.

B.price does more of the adjusting in the short run and quantity does more of the adjusting in the long run.

C.only quantity adjusts in both the short run and the long run.

Question 454

Covariance of returns is positive

A.when the return on one asset is above its expected value, the return on the other asset is above its expected value.

B.when the return on one asset is below its expected value, the return on the other asset is above its expected value.

C.when the return on one asset is above its expected value, the return on the other asset is also below its expected value.

Question 455

The assumptions of capital market theory expand on those of the _______ portfolio model and include consideration of the _________ rate of return.

A.Efficient Market; risk-free

B.Efficient Market; above average

C.Markowitz; risk-free

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Question 451

Question 452

Question 453

Question 454

Question 455

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