CFA-LEVEL-1 Online Practice Questions and Answers

Suppose 1,600 of 2,000 registered voters sampled said they planned to vote for the Republican candidate for president. Using the 0.95 degree of confidence, what is the interval estimate for the population proportion (to the nearest tenth of a percent)?

A. 77.7% to 82.3%

B. 78.2% to 81.8%

C. 69.2% to 86.4%

D. None of these answers

E. 76.5% to 83.5%

If you deposit $123 into an account paying 6% per year simple interest, what is the balance in your account 8 months later?

A. $182.04

B. $246.00

C. $123.92

D. $127.92

E. $131.51

Suppose you are modeling GNP, and you believe that the probability that GNP will expand if interest rates fall is 70%; if interest rates stay constant, you believe that there is a 29% chance of expanding GNP; if interest rates increase, you believe that there is a 1% chance of GNP expanding. You think that the likelihood of interest rates falling is 60%; of staying the same is 30%; of increasing is 10%. What is the unconditional probability of GNP expanding?

A. 49.8%.

B. 50.0%.

C. 50.8%.

D. 50.9%.

The employees of Cartwright Manufacturing are awarded efficiency ratings. The distribution of the ratings approximates a normal distribution. The mean is 400, the standard deviation 50. What is the area under the normal curve between 400 and 482?

A. 0.4750

B. 0.3413

C. 0.5000

D. 0.4495

E. None of these answers

What is the Net Present Value of this series of annual cash flows: Year 0: <$20,000>, Year 1: $15,000, Year 2: $5,000, Year 3: $7,500, using an interest rate of 10% per year? (Note that the <> are used to indicate a negative number).

A. $2,851.93

B. $3,512.81

C. $48.12

D. $4,116.55

E. $3,403.46

Which of the following is true with respect to extraordinary items?

I. Extraordinary items are recorded net of tax in income statement.

II. Extraordinary items, by definition, are probable and unusual in nature.

III.

By definition, gains and losses from strikes are always extraordinary.

IV By definition, gains and losses from sale of plant property and equipment are never extraordinary.

A.

I and IV, gains and losses from strikes are always extraordinary. IV By definition, gains and losses from sale of plant property and equipment are never extraordinary.

B.

I, III and IV

C.

II and IV

D.

I, II and III

What is the purpose of information presented in notes to the financial statements?

A. To provide disclosures required by generally accepted accounting principles.

B. To present management's responses to auditor comments.

C. To provide recognition of amounts not included in the totals of the financial statements.

D. To correct improper presentation in the financial statements.

E. None of these answers.

Industries which are cyclical and heavily oriented toward research tend to have high levels of ________. Industries which are subject to high levels of lawsuits tend to high levels of ________.

A. debt; equity

B. equity; equity

C. equity; debt

D. debt; debt

The date on which if you are listed by the company as an owner, you will receive a dividend is known as the:

A. Holder-of-Record Date

B. Declaration Date

C. Beneficiary Date

D. Payment Date

E. Ex-Dividend Date

ABC (a large manufacturer of farm equipment) is a stable company reporting the following financial information:

Earnings per share $1.50 Dividends per share $0.50

Net Income $12 million Equity $50 million

Given the above information, calculate the company's expected dividend growth rate.

A. 8%

B. 20%

C. 33%

D. 16%

E. 80%

F. 1.6%