CFA Level 1 － Mock Exam 2 模拟真题－Q21-25

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21、It is least appropriate to use the internal rate of return (IRR) rule to differentiate between mutually exclusive projects when either the projects' scale or cash flow timing, respectively, is:

Scale of the projects

Cash flow timing

Similar

Different

Similar

Different

Select exactly 1 answer(s) from the following:

A. AnswerA.

B. AnswerB.

C. AnswerC.

D. AnswerD.

22、An analyst gathered the following information about a common stock investment:

Date

Amount

Stock purchase (1)

15 January 2006

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发表于 2008-11-6 14:14 | 只看该作者

答案和详解如下：

21 Correct answer is D

“Discounted Cash Flow Applications,” RichardA. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 219-221
Study Session 2-6-a
calculate and interpret the net present value (NPV) and the internal rate of return (IRR) of an investment, contrast the NPV rule to the IRR rule, and identify problems associated with the IRR rule
The IRR rule should not be used to differentiate between mutually exclusive projects if the scale of the projects differs or if the timing of the projects’ cash flows differs.

22 Correct answer is D

“Discounted Cash Flow Applications,” RichardA. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 222-225
Study Session 2-6-c
calculate, interpret, and distinguish between the money-weighted and time-weighted rates of return of a portfolio and appraise the performance of portfolios based on these measures
The money-weighted rate of return is the IRR based on the cash flows related to the investment. In this case, a cash outflow of