Question 16

The Global Investment Performance Standards (GIPS) most likely apply to:

A)    all CFA Charterholders.

B)   all investment management firms.

C)   publicly-traded financial services firms that choose to adopt the standards.

D)   investment management firms that choose to adopt the standards.

Question 17

John Martin, an analyst and CFA charterholder, discovers that Jurix Co. has knowingly misstated information in its prospectus. To comply with CFA Institute’s Code of Ethics and Standards of Professional Conduct, Martin's most appropriate course of action is to:

A)    report the finding to the appropriate supervisory person in his firm.

B)   resign from his job in order to disassociate from the potentially illegal activity.

C)   call the appropriate regulatory agency and report the action.

D)   do nothing and see if the firm corrects the problem.

Question 18

Julie Lee, CFA, is an analyst for Fund Investments, a recently formed securities brokerage firm. Fund is developing a policy concerning personal securities trading by employees, but has not yet put the policy in place. Fund assigns Lee to write a research report on Alpha Beta Company, a company in which Lee has made a significant personal investment. Lee should most appropriately:

A)    decline to participate in writing the research report.

B)   prepare the report, because doing so will not violate an established policy.

C)   inform her supervisor that, as a member of CFA Institute, she is subject to Code and Standards.

D)   immediately inform her employer of her holdings in Alpha Beta.

Question 19

Natalie Brunswick, neurosurgeon at a large U.S. university, was recently granted permission to take an 18-month sabbatical that will begin one year from today. During the sabbatical, Brunswick will need $2,500 at the beginning of each month for living expenses that month. Her financial planner estimates that she will earn an annual rate of 9% over the next year on any money she saves. The annual rate of return during her sabbatical term will likely increase to 10%. At the end of each month during the year before the sabbatical, Brunswick should save approximately:

A)    $3,505.

B)   $3,550.

C)   $3,330.

D)   $3,356.

Question 20

Monthly returns for a set of small cap stocks are 1.3%, 0.8%, 0.5%, 3.4%, -3.5%, -1.2%, 1.8%, 2.1%, and 1.5%. An analyst constructs a frequency distribution and a frequency polygon using the following intervals: -4.0% to -2.0%, -2.0% to 0.0%, 0.0% to 2.0%, and 2.0% to 4.0%. Which of the following statements about these data presentations is least accurate?

A)    The absolute frequency of the interval 0.0% to 2.0% is 5.

B)   A frequency polygon plots the midpoint of each interval on the horizontal axis and the absolute frequency of that interval on the vertical axis.

C)   The relative frequency of the interval -4.0% to -2.0% is 11.1%.

D)   The relative frequency of the interval -2.0% to 0.0% equals the relative frequency of the interval 2.0% to 4.0%.

[此贴子已经被作者于2008-11-8 14:29:24编辑过]

Question 16

The Global Investment Performance Standards (GIPS) most likely apply to:

A)    all CFA Charterholders.

B)   all investment management firms.

C)   publicly-traded financial services firms that choose to adopt the standards.

D)   investment management firms that choose to adopt the standards.

The correct answer was D) investment management firms that choose to adopt the standards

GIPS are voluntary standards for performance presentation by investment management firms.

This question tested from Session 1, Reading 3, LOS a, (Part 2)

Question 17

John Martin, an analyst and CFA charterholder, discovers that Jurix Co. has knowingly misstated information in its prospectus. To comply with CFA Institute’s Code of Ethics and Standards of Professional Conduct, Martin's most appropriate course of action is to:

A)    report the finding to the appropriate supervisory person in his firm.

B)   resign from his job in order to disassociate from the potentially illegal activity.

C)   call the appropriate regulatory agency and report the action.

D)   do nothing and see if the firm corrects the problem.

The correct answer was A) report the finding to the appropriate supervisory person in his firm.

To comply with the Code and Standards, John should notify the appropriate supervisory person in his firm of the violation.

This question tested from Session 1, Reading 2-I, LOS A.

Question 18

Julie Lee, CFA, is an analyst for Fund Investments, a recently formed securities brokerage firm. Fund is developing a policy concerning personal securities trading by employees, but has not yet put the policy in place. Fund assigns Lee to write a research report on Alpha Beta Company, a company in which Lee has made a significant personal investment. Lee should most appropriately:

A)    decline to participate in writing the research report.

B)   prepare the report, because doing so will not violate an established policy.

C)   inform her supervisor that, as a member of CFA Institute, she is subject to Code and Standards.

D)   immediately inform her employer of her holdings in Alpha Beta.

The correct answer was D) immediately inform her employer of her holdings in Alpha Beta.

Even though Fund has yet to establish a personal trading policy for its employees, Lee must comply with Standard VI(A) Disclosure of Conflicts, which requires members to disclose to their employer all matters that reasonably could be expected to interfere with their duty to make unbiased and objective recommendations.

This question tested from Session 1, Reading 2-VI, LOS A.

Question 19

Natalie Brunswick, neurosurgeon at a large U.S. university, was recently granted permission to take an 18-month sabbatical that will begin one year from today. During the sabbatical, Brunswick will need $2,500 at the beginning of each month for living expenses that month. Her financial planner estimates that she will earn an annual rate of 9% over the next year on any money she saves. The annual rate of return during her sabbatical term will likely increase to 10%. At the end of each month during the year before the sabbatical, Brunswick should save approximately:

A)    $3,505.

B)   $3,550.

C)   $3,330.

D)   $3,356.

The correct answer was D) $3,356.

This is a two-step problem. First, we need to calculate the present value of the amount she needs over her sabbatical. (This amount will be in the form of an annuity due since she requires the payment at the beginning of the month.) Then, we will use future value formulas to determine how much she needs to save each month (ordinary annuity).

Step 1: Calculate present value of amount required during the sabbatical

Using a financial calculator: Set to BEGIN Mode, then N = 12 × 1.5 = 18; I/Y = 10 / 12 = 0.8333; PMT = 2,500; FV = 0; CPT → PV = 41,974

Step 2: Calculate amount to save each month

Make sure the calculator is set to END mode, then N = 12; I/Y = 9 / 12 = 0.75; PV = 0; FV = 41,974; CPT → PMT = -3,356

This question tested from Session 2, Reading 5, LOS e

Question 20

Monthly returns for a set of small cap stocks are 1.3%, 0.8%, 0.5%, 3.4%, -3.5%, -1.2%, 1.8%, 2.1%, and 1.5%. An analyst constructs a frequency distribution and a frequency polygon using the following intervals: -4.0% to -2.0%, -2.0% to 0.0%, 0.0% to 2.0%, and 2.0% to 4.0%. Which of the following statements about these data presentations is least accurate?

A)    The absolute frequency of the interval 0.0% to 2.0% is 5.

B)   A frequency polygon plots the midpoint of each interval on the horizontal axis and the absolute frequency of that interval on the vertical axis.

C)   The relative frequency of the interval -4.0% to -2.0% is 11.1%.

D)   The relative frequency of the interval -2.0% to 0.0% equals the relative frequency of the interval 2.0% to 4.0%.

The correct answer was D) The relative frequency of the interval -2.0% to 0.0% equals the relative frequency of the interval 2.0% to 4.0%.

When completed, the frequency distribution table should look as follows:

The relative frequency of the interval -2.0% to 0.0% does not equal the relative frequency of the interval 2.0% to 4.0%.

This question tested from Session 2, Reading 7, LOS c, (Part 1)

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