|Exam Name||:||Chartered Financial Analyst(R) Level I (CFA Level I)|
|Questions and Answers||:||585 Q & A|
|Updated On||:||January 18, 2018|
|PDF Download Mirror||:||Killexams CFA-Level-I dumps|
|Get Full Version||:||Killexams CFA-Level-I Full Version|
For which of the following ways of manipulating cash flow would an analyst be most likely to reclassify financing cash outflows as operating cash outflows? A firm has:
financed its payables.
repurchased stock to offset dilution.
An analyst gathers the following information:
Net income $100
Decrease in accounts receivable 30
Increase in inventory 17
Increase in accounts payable 10
Decrease in wages payable 5
Increase in deferred taxes 17
Sale of fixed assets 150
Purchase of fixed assets 340
Profit from the sale of fixed assets 5
Dividends paid out 35
Sale of new common stock 120
Based on the above information, the company's cash flow from operations under U.S. GAAP is:
A. $155. B. $165. C. $182.
Which of the following statements about cash flow is least likely correct? Under U.S. GAAP, cash flow from:
operations includes cash operating expenses and changes in working capital accounts.
financing includes the proceeds of debt issued and from the sale of the company's common stock.
investing includes interest income from investment in debt securities.
An analyst gathered the following data about a company:
The company had 500,000 shares of common stock outstanding for the entire year.
The company's beginning stock price was $40, its ending price was $60, and its average price over the year was $50.
The company has 120,000 warrants outstanding for the entire year.
Each warrant allows the holder to buy one share of common stock at $45 per share.
How many shares of common stock should the company use in computing its diluted earnings per share?
Books Forever, Inc., uses short-term bank debt to buy inventory. Assuming an initial current ratio that is greater than 1, and an initial, quick (or acid test) ratio that is less than 1, what is the effect of these transactions on the current ratio and the quick ratio?
Both ratios will decrease.
Neither ratio will decrease.
Only one ratio will decrease.
Costiuk, Inc., is an agricultural firm that has committed to purchasing 10,000 kilograms of fertilizer at specific prices over the next three years. Which part of the financial statements will most likely contain information regarding this transaction?
Management's discussion and analysis.
Notes to the financial statements.
Which of the following statements about expenses and intangible assets is least likely accurate?
Advertising fees are generally expensed as incurred.
In most countries, research and development costs are capitalized,
Intangible assets are initially entered on the balance sheet at their purchase prices when they are acquired from an outside entity.
Which of the following accounting practices is most likely to decrease reported earnings in the current period?
Using the straight-line method of depreciation instead of an accelerated method.
Capitalizing advertising expenses rather than expensing them in the current period.
Using LIFO inventory cost methods during a period of rising prices.
Which of the following statements about dilutive securities is least likely accurate?
A simple capital structure is one that contains only common stock and antidilutive securities.
A dilutive security is one that will cause earnings per share (EPS) to decrease if it is converted into common stock.
Warrants with exercise prices less than the current stock price can be antidilutive.
As of January 1, a company had 22,500 $10 par value common shares outstanding. On July 1, the company repurchased 5,000 shares. The company also has 11,000, 10%, $100 par value preferred shares. If the company's net income is $210,000, its diluted earnings per share is closest to:
In periods of rising prices and stable or increasing inventory quantities, compared with companies that use LIFO inventory accounting, companies that use the FIFO method will have:
higher COGS and lower taxes.
higher net income and higher taxes.
lower inventory balances and lower working capital.
Rowlin Corporation, which reports under IFRS, wrote down its inventory of electronic parts last period from its original cost of £28,000 to net realizable value of £25,000. This period, inventory at net realizable value has increased to £30,000. Rowlin should revalue this inventory to:
£30,000 and report a gain of £5,000 on the income statement.
£28,000 and report a gain of £3,000 on the income statement.
£30,000 but report a gain of only £3,000 on the income statement.
Compared with expensing the costs of a long-lived asset, a company that capitalizes these costs will:
show smoother reported net income and higher return on assets in future years.
have higher cash flow from operations and lower cash flow from investing.
have lower profitability ratios in the current year and higher cash flows from operations.
In the early years of an asset's life, a firm that chooses an accelerated depreciation method instead of using straight-line depreciation will tend to have:
lower net income and lower equity.
higher return on equity and higher return on assets.
lower depreciation expense and lower turnover ratios.
Which of the following definitions used in accounting for income taxes is least accurate?
Income tax expense is based on current period pretax income adjusted for any changes in deferred tax assets and liabilities.
A valuation allowance is a reserve against deferred tax assets based on the likelihood that those assets will not be realized.
A deferred tax liability is created when tax expense is less than taxes payable and the difference is expected to reverse in future years.
From the extended (5-part) DuPont equation, which of the following components describes the equation EBT / EBIT?
Under U.S. GAAP, which of the following statements about the financial statement effects of issuing bonds is least likely accurate?
Issuance of debt has no effect on cash flow from operations.
Periodic interest payments decrease cash flow from operations by the amount of interest paid.
Payment of debt at maturity decreases cash flow from operations by the face value of the debt.
When the expected tax rate changes, deferred tax:
expense is calculated using current tax rates with no adjustments.
liability and asset accounts are adjusted to reflect the new expected tax rate.
liability and asset accounts are maintained at historical tax rates until they reverse.
In general, as compared to companies with finance leases, companies with operating leases report:
higher working capital and higher asset turnover.
higher cash flow from operations and lower cash flow from financing.
lower expense in the early years of the lease and higher expenses over the life of the lease.
An asset is considered impaired if its book value is:
less than its market value.
greater than the present value of its expected future cash flows.
greater than the sum of its undiscounted expected cash flows.
In a web chat with read CFA-Level-Iers, Vidhu Shekhar, country head - India, CFA Institute shared some crucial suggestions
The Chartered monetary Analyst (CFA) program is knowledgeable examination that assessments aspirants for his or her analytical competencies and skills within the core areas of finance.
The program covers themes on funding management, economic evaluation, stocks, bonds and derivatives, that are of interest to finance gurus.
Lakhs of scholars register for the examination from across the nation, besides the fact that children, only a number of thousands are chosen.
CFA Institute, the global affiliation of funding gurus, introduced that of the 1,37,790 candidates who sat for CFA stage I, II and III June 2016 exams globally, 12,117 were from India.
India comprises the third greatest number of exam takers after the U.S. (31,501) and China (26,758).
The variety of candidates within the country grew by way of approximately 23 % as compared to December 2014.
Foe the benefit of read CFA-Level-Iers, Rediff.com had organised a chat with Vidhu Shekar, country head-India, CFA Institute on Thursday, December 1, 2016 between 3 pm and four pm IST.
for those who overlooked the chat, here's the unedited transcript:
Vidhu Shekhar: hey each person, I wish you all the top-quality for the examination on Saturday. i am hoping you feel well prepared and well rested for the big day.
Vaydha Bamse: Is it better to seem for the examination in India or should still I are trying overseas? one among my friends means that probabilities of cracking it internationally are a good deal greater. Pls comment
Vidhu Shekhar: The exam is exactly the same in all places. It doesn't rely where you sit down for the exam.
chandekar muley: How CFA institute will assess our work adventure? I even have worked for 2 distinct employers, so shall they determine from each. I even have heard that verification is achieved on random basis. Does that each one hang actual?
Vidhu Shekhar: You need two individuals to sponsor your membership software. Ideally, one of those may still be your supervisor and the other should be an latest charter holder.
Panse Kaisare: what's the change between the three ranges of CFA in terms of syllabus and problem level of tests?
Vidhu Shekhar: The emphasis in every degree is diverse. L1 requires knowing and making use of primary tools and ideas with a spotlight on potential and comprehension, L2 makes a speciality of asset valuation and requires evaluation and software of these concepts, and L3 specializes in portfolio administration and tests your capacity for synthesis and evaluation. The topical weights are distinct at each and every stage.
annu dwivedi: What sort of jobs am i able to get, as soon as I finished a CFA route?
Vidhu Shekhar: CFA charter holders work in a wide selection of investment management roles. These may well be securities analysis/research, portfolio administration, wealth advisory, possibility administration.
Gitika Sharan: What may be the main explanation for candidates not passing the CFA exams? Are they going incorrect of their strategy? Request you to share some insights here...
Vidhu Shekhar: main explanation for no longer passing is insufficient training. it is optimum to analyze from the usual route substances offered via CFA Institute and never to count fully on prep course materials. if you comprehensive all read CFA-Level-Iings in time and give your self sufficient time for mock tests you should definitely be in a position to pass.
DS Parihar: what is basic qualification for CFA
Vidhu Shekhar: make sure you be within the final year of your undergraduate degree software in order to take level 1. you should definitely be a graduate on the time that you simply take degree 2.
bipin patel: Is Indian CFA is accredited any place?
Vidhu Shekhar: CFA is a worldwide designation and the CFA examination is the same worldwide. There is not any such element as Indian CFA.
There is just one CFA credential and that's ordinary across the world.
Amit Iglesias: Mr Shekhar, I actually have been acting for the examination given that three years now and i locate it difficult to crack. could you pls share some elementary suggestions?
Vidhu Shekhar: No secrets and techniques or short cuts - i might indicate discovering from the CFA examine substances and following a correct time table. in case you believe the want, you could be part of teaching provided by way of any of the accepted prep route suppliers.
rahul: Sir, I work within the accounts department of a private company. i want to understand how the examination can assist me development in my profession.
Vidhu Shekhar: After CFA, you could be capable of observe to other roles to your business or find jobs outside of your latest business.
Jaykar Kajale: Some has informed me that with a view to get the constitution I should have signatures from two charter holders. is this suggestions authentic?
Vidhu Shekhar: sure. it truly is appropriate. After you pass degree three and you've got filed your work experience, you need to give referrals with the aid of two charter holders. you could also supply the reference of your instant supervisor for one of the vital two references. Please write to CFA Society India if you have no idea any one who would refer you.
AMANDEEP SINGH: Sir at present i'm not working. even though I even have 9 years of labor experience of which 6 years are within the banking trade. Am I still eligible to take CFA exam? Do I should get any documents from my previous company, because I did not leave the company on a superb word?
Vidhu Shekhar: sure, Amandeep. You could be eligible if you are a graduate. You do want any thoughts out of your old company.
Salim: Sir the way to prepare for the examination? what is the manner? how to observe?
Vidhu Shekhar: sign up early and put together from the CFA look at materials based on the study CFA-Level-I plan. Do the conclusion of chapter apply questions. upon getting coated the total syllabus take the mock checks.
Vipin Jain: Can a B Tech IT Engineer do CFA and have a career in that
Vidhu Shekhar: sure, many engineers pursue CFA and work in the funding management industry.
Sabeha Shams: good day sir, my question is how CFA examination will improvement me if i am looking to be an funding knowledgeable. Is CFA courses identified in India or would I should additionally go for any extra qualification
Vidhu Shekhar: hi Sabeha, sure, the CFA credential could be of exquisite price if you are seeking a career within the investment profession. CFA is commonly diagnosed in India. Your career possibilities would also rely upon some other qualification or work journey that you simply might also have.
pattabhi rao: i am a science graduate. am i able to take CFA stage 2 exam. Am I eligible directly?
Vidhu Shekhar: sure, Pattabhi. you are eligible to take the CFA exam.
Lead photograph used for representational purposes simplest. image: Reuters
The Chartered monetary Analyst (CFA) is likely one of the extra frequently renowned designations for funding authorities. despite the fact, fitting a CFA constitution holder is not for the faint-hearted nor the uninterested. The event to becoming a CFA constitution holder is lengthy, and it tests no longer only your talents of the field, however additionally your endurance, diligence and should. in response to the CFA Institute, the current program is best described as a self-look at, distance-study CFA-Level-Iing application that takes a generalist method to investment evaluation, valuation and portfolio management, and emphasizes the optimum ethical and professional necessities.
The CFA program consists of three tests: CFA degree I, level II and degree III. As a CFA candidate, you are required to circulate each of those assessments and you need to meet definite work requirements as set out by way of the CFA Institute. In 2015 the passing rate for the stage I exam become forty two%.
The curriculum for every of these three tiers is designed to look at various you on a wide array of competencies regarded to be most imperative for the investment profession. listed here we will focus on the CFA level I examination.examination structure
The examination is a six-hour examination, damaged right into a morning and afternoon session, every being three hours lengthy. The examination incorporates 240 dissimilar-option questions: one hundred twenty questions in the morning session and a hundred and twenty questions within the afternoon session. the entire varied-alternative questions are free standing (i.e., they aren't dependent on each and every other). For each and every question, there are three possible choices provided. The questions are crafted intelligently, such that the wrong decisions mirror general blunders in calculation or common sense. So, you need to be very careful whereas picking the appropriate option.exam Curriculum
The examination specializes in basic talents and comprehension of tools and concepts of funding valuation and portfolio administration. The curriculum contains 10 issues that are grouped into four areas, mainly: moral and knowledgeable necessities, funding equipment, asset courses, and portfolio management and wealth planning.
the following desk provides the weights of these themes and extensive areas for the degree I examination.subject area stage I moral and skilled requisites (total) 15 funding equipment (total) 50 company Finance 7 Economics 10 economic Reporting and evaluation 20 Quantitative strategies 12 Asset classes (complete) 30 choice Investments four Derivatives fivefairness Investments 10 mounted profits 10 Portfolio administration and Wealth Planning (total) 7 entire100
Let's take a brief look at each and every of these 10 themes.
Ethics and skilled requirements This section covers the code of ethics, knowledgeable standards and the international funding performance necessities (GIPS). here is a extremely important area and you'll be asked approximately 36 questions about the subject. The Institute itself takes this area very critically. in case you rating low or close to the minimal passing score on all different topics, then your rating on ethics could verify whether you pass or fail. One knowledge with getting to know ethics well is that it also helps together with your degree II and III exam guidance.
Quantitative strategies while ethics is greater situation-oriented and simple to observe, this section can be intimidating for some students. You are not looking for a Ph.D. in mathematics to do well in quants, but having a stats background will definitely be beneficial. you can predict around 28 to 30 questions regarding quants. The topics covered are geared toward presenting you the talents of analytical tools which are primary for material on mounted salary, equities and portfolio management. the key subject matters covered are: time value of cash, performance size, information and probability basics, sampling and hypothesis checking out and correlation and linear regression evaluation.
Economics The economics section tests your skills on fundamental micro and macroeconomic ideas. in case you studied economics in school, then you will discover this material very general. with out a history in economics, this cloth may also be challenging, specifically macroeconomics, which employs using graphs and x and y curves for example ideas concerning the economic system. Economics comprises 10% of the syllabus.
economic Reporting and evaluation (economic ratios) this is doubtless the biggest area on the examination, with 20% of the questions being on this topic. Reporting and analysis are additionally weighted in regards to the same for the stage II direction, so it's vital to spend ample time gaining knowledge of this area to construct a high-quality basis for subsequent assessments. You may be requested to interpret the three monetary statements (steadiness sheet, revenue remark and cash circulation statement), know the ratios and a lot of other advanced concepts reminiscent of income awareness, stock analysis, long-time period belongings and taxes. considering the fact that the exam is a worldwide exam, it doesn't cover native accounting practices. The focus is extra on largely permitted necessities comparable to U.S. GAAP and IFRS.
corporate Finance After financial reporting and analysis comes corporate finance. here is a brief area with only an 7% weightage. the key themes encompass company complications related to agency-primary relationship, capital budgeting, can charge of capital, leverage and dealing capital management.
Portfolio ManagementThe degree I examination only introduces you to the fundamentals of portfolio administration. The critical concepts are up to date Portfolio thought and the Capital Asset Pricing model. There might be about 17 questions in this area. This area acts as a guidance for stages II and III, where the focal point is more on the utility of your entire abilities on portfolio management.
equity Investments you could expect about 10% of questions to be on equities. The curriculum for equities covers fairness markets and devices, and equipment and thoughts for valuing businesses. the vast majority of the questions can be concentrated on valuing and examining organizations.
fastened income After equities, the examination deals with fastened salary markets and its instruments. you are required to be mindful the characteristics of a variety of fixed earnings securities and the way to rate them. Some important concepts are the yield measures and length and convexity. This area also discusses structured products reminiscent of personal loan-backed securities and collateralized loan duties, among others. fixed salary includes 10% of the exam.
Derivatives corresponding to portfolio management, derivatives are simplest introduced in level I. You will be tested on the fundamentals of futures, forwards, swaps, alternatives and hedging concepts using these derivatives. This part handiest has a 5% weightage, it's about 12 questions.
choice Investments This part specializes in choice investments together with true estate, inner most equity, assignment capital, hedge money, closely held businesses, distressed securities and commodities. There may be about seven to eight questions from this area and may be greater conceptual in nature. there's particular consideration to commodity investments, so get everyday with concepts similar to backwardation and contango.The bottom line
standard, the CFA level I examination is well-balanced, with a large spectrum of subject matters. Some subject matters may also require proportionally extra time to examine than others; however, what's important is to plot your experiences and reside with the plan. best of success on the examination!
The CFA stage 1 examination is barely around the corner on December 7, 2013. infrequently twenty days to head! by using this time, you need to be raring to go and hitting your target spot-on. with the intention to make your CFA Prep greater complete, you're going to discover here a list of practice exams ranging from various issues similar to Economics, Portfolio management, Quant, and so on.
so to take these assessments, simply observe the links!
1) degree 1 CFA Economics Diagnostic test
if you accept as true with you be aware everything about Demand and supply analysis, shopper Demand, Demand and supply evaluation: The enterprise, The firm and Market structures, economic services of Depository associations then go forward and take the verify! in case you aren’t in a position, you’ll understand precisely the place to beginning in #CFA #Economics prep!
2) degree 1 CFA Portfolio management Diagnostic look at various
a short 6 query on #CFA #Portfolio administration. See how you fare in the verify!
three) CFA level 1 Ethics Diagnostic look at various
To verify your expertise of #CFA Ethics, simply observe the link and spot how you rating!
4) CFA level 1 FSA basics Diagnostic quiz
As you should be would becould very well be mindful, Ethics and financial statement evaluation raise the highest weightage within the #CFA examination. The questions are often elaborate too. To take note your standing in Ethics and financial statement analysis, comply with the hyperlink and take the check!
5) CFA degree 1 Quantitative Diagnostic quiz
EduPristine offers an exhaustive set of questions, mock checks and mind maps that can assist you prepare for the #CFA examination. This quiz is likely one of the equipment. To take the quiz, simply observe the hyperlink.
6) CFA degree 1 Microeconomics Diagnostic Quiz
This quiz incorporates 6 very fundamental questions about the Microeconomics element of the #CFA examination. Take the quiz to decide your stage of guidance for the exam.
7) CFA stage 1 FSA 2nd Diagnostic Quiz
this is the 2d diagnostic quiz of #CFA financial plan evaluation. so to music your growth in your #CFA prep, comply with the link and take the test.
8) CFA Diagnostic verify
finally, the quiz with a purpose to look at various your whole #CFA prep! You may examine your efficiency with individuals from across the world. Free intellect maps could be given to all college students who effort all of the questions correctly!
to know more, just follow the hyperlink!
We will be giving free mind maps to college students attempting the entire questions correctly. pattern material will also be checked at Visualize CFA.
To take a number of greater quizzes to judge your education degree on your CFA exam prep, simply comply with the link to CFA: practice exams.about the creator EduPristine
depended on via Fortune 500 businesses and 10,000 college students from forty+ countries across the globe, it is without doubt one of the main foreign practising providers for Finance Certifications like FRM®, CFA®, PRM®, company Analytics, HR Analytics, monetary Modeling, and Operational possibility Modeling. EduPristine has performed greater than 500,000 man-hours of high-quality practicing in finance.
There are 5 days to go unless the CFA level I checks and a few individuals are beginning to panic. You’re purported to spend as a minimum 300 hours study CFA-Level-Iing for each and every of the CFA assessments and if you haven’t put these hours in now, you’re going to be complicated pressed to make them up. adequate, you might do 90 hours exam coaching this week, but handiest in case you do nothing but look at all through your waking hours – and that appears not going.
for this reason, boards used by CFA examination students were filling up with messages from the stressed out.
“I haven’t attempted a single Mock exam yet and additionally now not attempted a single question from Schweser Qbank,” moans one CFA degree I candidate in Canada. “I haven’t achieved the corporate finance and derivatives part yet,” he adds, saying that he’s inclined to look at 20 hours a day unless the examination takes vicinity.
an additional candidate says he’s taken 5 mock checks (and scored an honest ordinary of 75% in every, which should still be a circulate), however that his plans to have the ultimate week off work to examine had been stymied by a colleague, who’s taken annual depart.
an extra says he’s been scoring check averages of 30-38% (not a circulate) and is researching, “seven hours a day, six days every week.” One candidate claims to have only begun learning two weeks in the past and is aiming for “sixteen hours a day” with Thursday and Friday devoted fully to mock tests. yet another says he simplest all started getting to know 12 days ago and will be doing “14 hours a day, uninterrupted, from a base of zero skills.”
Will they pass? Most people seem to think it unlikely. besides the fact that children, one candidate who’s preparing for the June level I exam in preference to for next Saturday’s session, claims to have developed a gadget. We’ve posted this under. tell us what you suppose in the feedback box at the backside of this page. Would this definitely get you through one of the most complicated economic assessments on this planet?
‘There are 240 questions.
You need 168 right (70% of 240) to pass.
can you get 50% of the questions definitely correct? As in, you’re sure of the correct reply? That doesn’t look so tough. Yeah, sure that you would be able to.
So now you've got 120 questions appropriate. You need forty eight more.
Of the 120 remaining questions, can you get rid of one incorrect reply out of the three choices for half of them? bound, that appears within your budget. So for 60 of the remaining questions, you’ll get 30 of them (50% of 60) right.
Now you’ve got a hundred and fifty. You need 18 extra.
There are 60 questions left. You don't have any conception what the correct answer is for any of them. You’re simply guessing randomly. So for 20 of the final 60 questions, you’ll get 20 (1/three of 60) correct.
That brings you to one hundred seventy. Congratulations, you pass.’
image credit score: “Battery” by means of Andy Armstrong is licensed below CC with the aid of-SA 2.0
The CFA Institute has introduced the consequences of the December 2010 sitting of its Chartered fiscal Analyst (CFA) software level I examination. Of the 46,644 individuals who took the exam, 36% handed.
In Canada, three,427 wrote the exam, up 5% from 2009. That areas Canada behind most effective united states (10,887), India (5,812), Mainland China (5,646), the UK (three,488) in numbers of candidates sitting the examination.
“The number of candidates who registered for the CFA exam in calendar year 2010 (June and December exams combined) extended to 204,688, demonstrating that the CFA designation continues to entice individuals who are looking to increase their advantage and advantage to be successful in nowadays’s competitive world of investing and finance,” noted John Rogers, CFA, president and CEO of CFA Institute.
To earn the CFA designation, candidates should flow all three degrees of examination; meet the work event necessities of 4 years within the investment industry; sign a dedication to abide by using the CFA Institute Code of Ethics and requirements of professional behavior; follow to a CFA Institute society; and become a member of CFA Institute.