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FinKnow | [
"explicit legislative commitment to maintain a specified parity.",
"monetary independence being subject to the maintenance of an exchange rate peg.",
"target foreign exchange reserves bearing a direct relationship to domestic monetary aggregates."
] | null | A fixed-rate system is characterized by: | null | 90c707d5-15b9-4458-8b09-66549419cd5f |
FinKnow | [
"increase in domestic money supply.",
"decrease in foreign currency reserves.",
"decrease in the cost of short-term borrowing."
] | null | The economic activity in a developing country has started to accelerate resulting in higher domestic inflation. In order to maintain its exchange rate target, the government's actions will most likely lead to a (n): | null | b130e06f-0d5e-4714-b7a5-4b6b59598de6 |
FinKnow | [
"cut the target rate.",
"increase the target rate.",
"keep the target rate unchanged."
] | null | When an economy is slowing and inflation and monetary trends are weakening, in order to increase liquidity, the central bank will most likely: | null | eff8856d-ed0c-481e-b449-8ad4bf97e7ab |
FinKnow | [
"Degree of regulation",
"Severity of retaliation",
"Availability of substitutes"
] | null | Which of the following factors will most likely influence the success of a collusive agreement? | null | 1a30ef8d-0dc9-4c7b-b50f-039dff117213 |
FinKnow | [
"continues to trade through the broker.",
"finds and selects a broker that offers the best 'price'.",
"seeks best execution by selecting a different broker and informs the client about his selection."
] | null | Adam Blank directs all trades of one of his clients through a broker specified by the client. Doing so does not help Blank achieve best execution and best price. Blank discloses this fact to the client but continues trading through the same broker. Blank will least likely be in violation of Standard III(A)-Loyalty, Prudence, and Care if he: | null | 56591d99-cb34-4285-a07e-73fc94e18ed3 |
FinKnow | [
"5-years.",
"7-years.",
"10-years."
] | null | In the absence of regulatory guidance, CFA Institute recommends that firms should maintain records for at least: | null | 039671c2-7146-49ac-b458-b639dfbe189f |
FinKnow | [
"market value of all discretionary fee and non-fee paying accounts.",
"fair value of all discretionary and non-discretionary fee-paying accounts.",
"fair value of all discretionary and non-discretionary accounts including both fee paying and non-fee paying portfolios."
] | null | To be compliant with the GIPS standards, a firm's total assets must be the aggregate of the: | null | 7535eabf-2ea2-4ce3-95a7-ded250f3eb3f |
FinKnow | [
"refuse writing the report and accepting a higher fee since it contradicts with best conduct.",
"write the report, but disclose the nature of compensation and potential conflicts of interests to investors.",
"write the report, but not accept the higher fee and ask for a fee that is comparable to similar research work."
] | null | Vivid Optics (VIOP) is a U.S. firm that specializes in the productions of eye-sight glasses and eye-care equipment. Even though the firm has been successful in the past, it's stock has not gained much popularity amongst investors. To increase visibility in financial markets, VIOP hires Al Bailey, a research analyst, to write a report analyzing their company. In return, VIOP promises to pay Bailey a fee that is 10% greater than the fee paid for similar research work. Bailey conducts a thorough, independent analysis and issues a 'buy' recommendation for the firm. In preparing the report, to be in compliance with Standard I(B)-'Independence and Objectivity' of the CFA Institute Standards of Professional Conduct, Bailey should most likely: | null | 293ffded-5a2d-452b-8d8e-4c87ec98ce0f |
FinKnow | [
"more strict for market-making than risk-arbitrage trading.",
"more strict for risk-arbitrage trading than for market making.",
"equally stringent for market-making and risk-arbitrage trading."
] | null | With regards to proprietary trading procedures, the CFA Institute Standards of Professional Conduct impose a trading prohibition that is: | null | b1e96468-fe88-4149-a67d-b2638246f0b8 |
FinKnow | [
"take on a range of values.",
"are significant in number.",
"are equally likely in occurrence."
] | null | A discrete uniform distribution comprises of outcomes which: | null | 874f0c94-5a8c-4d90-ae67-455731107c4e |
FinKnow | [
"Law of probabilities.",
"Central limit theorem.",
"Lognormal distribution theorem."
] | null | "Continuously compounded returns need to be normally distributed for asset prices to be log-normally distributed." Which of the following would most likely refute the above condition? | null | 12718364-8faa-42a8-9848-685dc389b26e |
FinKnow | [
"Statement 1 only.",
"Statement 2 only.",
"Neither statement 1 nor statement 2."
] | null | A financial statistician made the following comments while addressing a group of internees about the various statistical techniques used in equity analysis. Statement 1: "Sample variance calculated with a divisor of 'n' is a biased estimator of the population variance." Statement 2: "An estimator is more efficient and unbiased the larger the sample size." He is most accurate with respect to: | null | 437b0c64-bc34-4e10-a0e1-fc7a942f9688 |
FinKnow | [
"The variance of the distribution of the sample will decrease as the sample size increases.",
"The mean of the distribution of the sample will almost be equal to the mean of the population from which the sample is drawn.",
"The variance of the distribution of the sample will be equal to the variance of the population dividend by (n-1)."
] | null | According to the central limit theorem, which of the following is most accurate? | null | 50a7684d-3ec3-48ce-bd11-8d595a127105 |
FinKnow | [
"probabilities are based on logical analysis.",
"the probability of any event is between 0 and 1.",
"the sum of probabilities of any set of mutually exclusive and exhaustive events equals 1."
] | null | Defining properties of a probability least likely include the following: | null | 31cfa341-c2d0-4613-a55d-ad840a5e41dd |
FinKnow | [
"arithmetic and harmonic mean.",
"harmonic mean but will be lower than the arithmetic mean.",
"arithmetic mean but will be higher than the harmonic mean."
] | null | If there is no variability in the data set, the geometric mean will equal to the: | null | 0811b371-010b-4b16-bb1d-12e737c96b68 |
FinKnow | [
"widens the confidence interval.",
"decreases the sample standard error.",
"lowers the precision with which the population parameter is estimated."
] | null | Increasing the sample size: | null | 3ecb2796-4699-4220-8a4c-c4938c383dcf |
FinKnow | [
"No.",
"Yes, a Type I error.",
"Yes, a Type II error."
] | null | Sasha Bayle is analyzing the performance of small-cap stocks in an equity index. She is forecasting how stocks will perform relative to the previous quarter in terms of the EPS generated. She performs her analysis using hypothesis testing and rejects the null hypothesis in favor of the forecast that sample stocks will generate a higher EPS. Several months later, Bayle discovers that the null hypothesis was in fact correct and her decision was inaccurate. Has Bayle committed an error in her statistical analysis? | null | 3845d2bf-400f-4a86-b083-81c7d5b3de93 |
FinKnow | [
"opportunity costs of future consumption.",
"the return forgone from current consumption.",
"a sum of the nominal risk-free rate and premiums to compensate for distinct types of risks."
] | null | The interest rate quoted on an investment can be viewed as: | null | 7cc8374c-388e-433f-87f7-0d5742ee42fd |
FinKnow | [
"Measures of location include not only measures of central tendency but also illustrate the distribution of the data.",
"Measures of location illustrate the distribution and location of the data but fail to specify where the data are centered.",
"Measures of central tendency specify where the data are centered but illustrate nothing about the distribution of the data."
] | null | Which of the following statements is least accurate regarding measures of central tendency and measures of location? | null | 0f13af3b-ce34-4cb7-825b-9763d39ab3ee |
FinKnow | [
"Technicians restrict their analysis to studying market movements.",
"Technicians are slow to recognize changes in trends and/or patterns.",
"The analysis cannot be applied to asset classes that do not have an income stream."
] | null | the probability of any event is between 0 and 1. the sum of probabilities of any set of mutually exclusive and exhaustive events equals 1. Which of the following statements is least likely correct regarding a limitation of technical analysis? | null | ef36af4e-5930-47ee-9e84-f555fba84113 |
FinKnow | [
"the amount paid for income taxes.",
"a provision made for its income taxes.",
"an aggregate of its income tax payable and any changes in deferred taxes and liabilities."
] | null | A company's tax expense represents: | null | 2cb88dc4-dee7-4430-95c2-dd9e61bdf632 |
FinKnow | [
"solvency and the ability to acquire and pay down debt.",
"profitability and the cash generating ability of operations.",
"solvency and the company's ability to acquire assets, pay debt and make distributions to owners."
] | null | A ratio that contains cash flow from operations in its numerator and cash outflows from investing and financing activities in its denominator measures: | null | 736de4ac-862a-4d9d-9023-8a6b8a5e4432 |
FinKnow | [
"statement of operations.",
"supplementary schedule.",
"management commentary ."
] | null | An overview of specific business lines and the segmentation of income are most likely found in the: | null | 7a4efe3e-8686-4c9c-af4a-66bf89d4dd2e |
FinKnow | [
"depreciated.",
"amortized but not tested for impairment.",
"tested annually for impairment but not amortized."
] | null | Intangible assets with perpetual lives are most likely: | null | 1e0b3bb2-d3cd-4cf2-b2c0-29fffa2df72d |
FinKnow | [
"are self-regulated organizations.",
"can recognize the standards they set.",
"exert control over entities that participate in the capital markets of their jurisdiction."
] | null | Standard-setting bodies: | null | 8d67014e-f876-435f-9442-dab8c4ab174c |
FinKnow | [
"reduce bonds payable by the face value of the bonds redeemed.",
"report the cash used for redemption as a cash outflow from financing activities.",
"report the unamortized debt issuance costs as part of gain or loss on debt extinguishment."
] | null | Starred Limited redeems a portion of its bond issue prior to the stated maturity date. Which of the following statements most accurately highlights the effect of the redemption given the company complies with IFRS? Starred will: | null | 3efeab42-fff9-488d-9c80-71d4e1e7d536 |
FinKnow | [
"investing activity or operating activity.",
"financing activity or investing activity.",
"operating, investing or financing activity."
] | null | Unlike under U.S. GAAP, under IFRS interest received or paid can be reported either as an: | null | c41e4dc9-9abc-40a5-a48c-af42976cd3c0 |
FinKnow | [
"equity.",
"net income.",
"other comprehensive income."
] | null | Unrealized gains or losses on available for sale securities are most likely excluded from: | null | 4f3b43fe-3485-47ab-b1f9-f010c009f32c |
FinKnow | [
"A tangible asset with an indefinite life.",
"An intangible asset with an indefinite life.",
"An unidentifiable asset with a definite life."
] | null | Which of the following assets should least likely be amortized? | null | 106e862b-cf56-47e1-a08c-50af1d56d2cb |
FinKnow | [
"Invest in Project A.",
"Invest in Project B.",
"Invest either in Project A or Project B."
] | null | Alex Paul is considering the NPV profile of two projects of differing scales. The required return corresponds to the crossover point of the profile. The IRR of Project A is 7 percentage points lower than the IRR of project B. Which of the following best represents the appropriate investment decision? | null | 52668ad6-6091-4c08-9d0e-2662d5675d05 |
FinKnow | [
"CleanWay has more operating risk.",
"Home Care's net income is more sensitive to changes in operating income.",
"Home Care's cash flows have greater sensitivity to changes in operating income."
] | null | Dwight Engle is a financial analyst evaluating the risks associated with two detergent manufacturers, Home Care and CleanWay. Home Care has a higher perunit variable operating cost while CleanWay's fixed operating costs are 1.5 times greater. Out of the two corporations being analyzed, Home Care has a greater total number of shares outstanding and finances a greater proportion of its projects using equity. CleanWay, on the other hand, rarely uses equity as a financing source. Based on his findings, Engle will most likely conclude that: | null | 3515f406-7c28-486b-92e4-f3dd369d757f |
FinKnow | [
"Sales risk.",
"Financial risk.",
"Operating risk."
] | null | Making payments early Reduced credit limits Limits on short-term lines of credit Low liquidity positions Which of the following can be least managed or controlled by a firm's management? | null | b4986a72-f7ba-4782-b7f9-b77f6fbdc2ef |
FinKnow | [
"only if the repurchase is financed with debt.",
"only if the repurchase is financed with excess cash.",
"whether the repurchase is financed with debt or with excess cash."
] | null | If a company engages in share repurchases, leverage will increase: | null | 1dfc7e3d-f9ed-462c-a398-e09f1dce39e1 |
FinKnow | [
"A large retail store",
"A pharmaceutical firm",
"A software development firm"
] | null | Which of the following industry least likely has higher operating leverage? | null | 31714cc0-fae9-44c9-8fb4-3cec2d94f7bd |
FinKnow | [
"market prices accurately reflect intrinsic values.",
"opportunities for profitable active investments exist.",
"investors will take long positions in AAA-rated corporate bonds."
] | null | A fixed income analyst is studying the corporate bond sector in his country's fixed income market. After thorough analysis he concludes the value of a AAArated corporate bond placed by investors based on their complete understanding of the bond's interest rate, principal value and timing of its interest and principal payments is 90. The bond is currently selling at a price of 120. Based on the results collected, the analysis can most likely conclude that: | null | a0c9981b-1975-48cd-9dea-adfa3581a5cd |
FinKnow | [
"not need to be concerned with currency conversions.",
"be able to track the performance of the underlying index.",
"have an indirect, economic interest in a foreign company."
] | null | A trader who purchases a global registered share will most likely: | null | 0332e644-454a-4f1e-a5ee-1b99c61b805b |
FinKnow | [
"Illiquidity",
"Tax consequences",
"Low diversification potential"
] | null | Brian Ross is a wealthy entrepreneur managing his own investment portfolio. He is seeking to expand his investment portfolio, which comprises solely of equities. Ross is seeking a tax-efficient investment, which has a moderate to high degree of liquidity and can bring diversification benefits to his portfolio. He is exploring direct real estate as a potential investment vehicle. Which of the following factors will discourage Ross from investing in direct real estate? | null | d5fd5c7e-c902-452f-9f60-041f2d2b64b3 |
FinKnow | [
"maturity.",
"type of issuer.",
"frequency of coupon payments."
] | null | Fixed income indexes are least likely classified based on: | null | b7d2a9b7-364b-44b8-89e7-e24c90091af0 |
FinKnow | [
"investment universe.",
"broadest definition of a market segment.",
"allocation to specific securities included in the index."
] | null | Identifying the target market during the index construction process involves determining the: | null | 3a6d2c52-19e8-496f-81fc-f0699ffa7873 |
FinKnow | [
"The values of the two indexes will converge.",
"The value of the price return index will exceed the value of the total return index.",
"The value of the total return index will exceed the value of the price return index."
] | null | Which of the following statements accurately characterizes the impact of time on difference in values between price and total return indexes? | null | 390714dd-5861-4cc7-a12e-a6c9748428b9 |
FinKnow | [
"Voting rights",
"Perpetual maturity dates",
"Presence of embedded options"
] | null | Which of the following features most likely distinguishes common and preference shares? | null | ec8d3d4c-351e-435b-bacf-e86ec6cf92ec |
FinKnow | [
"overpriced.",
"underpriced.",
"fairly valued."
] | null | A trading is exploring arbitrage opportunities in the options market. European calls and puts with an exercise price of 65 expire in 150 days. The underlying is priced at 68 and makes no cash payments during the life of the options. The riskfree rate of interest is 4.0%. Call and put options are selling for 7 and 6 respectively. Based on the information provided, the trader will conclude that the call option is: | null | b4750a88-811a-4337-8e46-4e3eeb4fdd91 |
FinKnow | [
"starts with a non-zero value.",
"is not made within normal business timings .",
"is used to offset the current forward transaction."
] | null | Off-market forward is a forward transaction that: | null | 7e72530b-8cee-4ec4-86c3-ecb86b44eecf |
FinKnow | [
"Eurobonds.",
"money market securities.",
"capital market securities."
] | null | Fixed-income securities that are issued with a maturity of less than one year are most likely known as: | null | 76578be1-f485-4dc0-83d7-76e59c6518ba |
FinKnow | [
"repurchase agreement, and the coupon will belong to the seller of the security.",
"reverse repurchase agreement, and the coupon will belong to the borrower of the security.",
"reverse repurchase agreement, and the coupon will belong to the borrower of cash."
] | null | A dealer believes that the bonds issued by Super-Tee Enterprises (SUTEE) are considerably overvalued and wants to benefit from the mispricing. For achieving this objective, the dealer borrows 100 par value bonds of SUTEE from an institutional investor and lends cash in return. The bonds have a stated coupon rate of 7.5%. The above transaction will best be known as a: | null | a07ec34c-2591-4ecb-b0f1-8d22f899e527 |
FinKnow | [
"High credit quality.",
"Moderate liquidity needs.",
"A sinking fund provision."
] | null | A portfolio manager is confused about whether to invest in a bond issue with a serial maturity structure, or one with a term maturity structure, given everything else is similar. Which of the following, if introduced, will make the manager largely indifferent between the two structures? | null | 45e4c4b8-0702-4e00-ab51-edacdb85560f |
FinKnow | [
"remains constant.",
"decreases at constant rate.",
"decreases at decreasing rate."
] | null | For a fully amortized bond, the annual payment, which includes both the coupon payment and the principal repayment: | null | 81e55f5b-6443-460e-a2a1-68ac95d75f03 |
FinKnow | [
"Sovereign bonds.",
"Supranational bonds.",
"Syndicated or bilateral loans."
] | null | Which of the following investments are mostly based on a floating interest rate? | null | 72634e3e-b99e-49e7-8074-563f55fd6f92 |
FinKnow | [
"Anchors.",
"Auctions.",
"Grey market."
] | null | The use of which of the following will least likely aid underwritten bond offerings in price discovery? | null | 552aff9e-3464-4bdb-ad40-06de07080bf0 |
FinKnow | [
"Balloon payment at maturity.",
"Entire payment of principal occurs at maturity.",
"Periodic payments of interest and principal repayments based on a schedule."
] | null | Which of the following characteristics are unique to partially amortized bonds? | null | 1ceab4da-777d-44c3-a6c6-f7014b902ae1 |
FinKnow | [
"in contango.",
"in backwardation.",
"unbiased predictors of future spot prices."
] | null | A commodity futures market is characterized by high storage costs and little convenience yield. The prices in such a market are most likely: | null | bd577e6f-ef4e-488f-b7aa-9adfb8b91e77 |
FinKnow | [
"top down analysis.",
"bottom up analysis.",
"fundamental analysis."
] | null | A hedge fund manager uses event driven strategies to generate positive return for his fund. This strategy most likely involves: | null | a9dc45cd-2393-40de-b423-297a78c90cd8 |
FinKnow | [
"Timberland.",
"Equity REITs.",
"Residential property"
] | null | An investor would like to invest in a real estate asset class which provides a relatively predictable income stream and has the obligation to distribute the majority of its income to owners. The investor should most likely select: | null | 1d25466c-9919-441e-a478-24b146372817 |
FinKnow | [
"REIT index",
"Appraisal index.",
"Repeat sales index."
] | null | Which of the following real estate indices will most likely result in a sample selection bias? | null | 02dff39d-3b25-495c-ace8-ed0a262f1986 |
FinKnow | [
"political system",
"market conditions.",
"circumstances of investment manager."
] | null | Feed back step assists in rebalancing the client's portfolio due to change in: | null | 7d22b8c4-3538-47ff-bff9-8f8be3a92e4b |
FinKnow | [
"The people and systems required to track risk exposures.",
"The top level system of structures, rights and obligations by which organizations are controlled.",
"The extensions of risk governance into both the day-to-day operation and decision making processes of the organization."
] | null | Risk infrastructure most likely refers to: | null | 270619ef-112f-48fc-840f-63bd4b517552 |
FinKnow | [
"substitutes.",
"complements.",
"normal goods."
] | null | Cross elasticity of demand is negative for goods that are: | null | cc3a243e-8ee6-4ce5-bb56-f727f0a72f3c |
FinKnow | [
"Dividend reinvestments",
"Ownership rights of fund assets",
"Underlying securities held by the fund"
] | null | Which of the following features most likely distinguishes ETFs from index mutual funds? | null | 6f7179f6-7e87-4349-9ca8-d14476ed61a5 |
FinKnow | [
"Maintain the fund's nominal value",
"Reduce the volatility of spending needs",
"Generate liquidity to meet spending needs"
] | null | Which of the following is most likely to be an objective for a foundation? | null | 6f5bd60f-c988-41f4-981e-d28859adddce |
FinKnow | [
"is recommended by codes of corporate governance.",
"can be used as a basis to determine the suitability of an investment.",
"allows identification of any conflict between a client's objectives and constraints."
] | null | Writing an investment policy statement (IPS) is important because it: | null | a81ecd0f-3091-41ad-83cf-c7f8808f9e20 |
FinKnow | [
"continue to identify his name with the research report.",
"request for the removal of his name from the research report.",
"not issue the report with his recommendation as it is based on material nonpublic information."
] | null | Paul Murray is preparing a report on the stock of a credit rating agency with two other research analysts. Based on his independent discussion with the agency's executives as well as study of economic reports and surveys, Murray forecasts the agency's client base to shrink and deems a 'sell' rating as appropriate. However, his colleagues disagree stating that Murray's recommendation is too extreme and that a 'hold' rating is more appropriate based on their in-depth historical industry analysis of the impact of a shrinking client base on corporate performance. In order to comply with the CFA Institute Standards of Professional Conduct, Murray's best course of action is to: | null | f94bdad7-4d54-4d88-9c35-e0ec5ad8e139 |
FinKnow | [
"not include assets assigned to a sub-advisor.",
"include non-discretionary and discretionary assets.",
"be included in composites on the basis of their respective book values."
] | null | According to the Fundamentals of Compliance section of the Global Investment Performance Standards, total firm assets must: | null | dec001e4-1edb-4663-a44d-2f9f20e7054b |
FinKnow | [
"Is required to ensure the financial years, 2002-2006, are in compliance.",
"Is required to ensure the financial years, 2002-2009, are in compliance.",
"can link non-GIPS compliant performance with GIPS-compliant performance as long as disclosure is provided."
] | null | Harper Inc. is a financial services firm that was established on January 1, 2002. The firm claims compliance with the GIPS standards on January 1, 2009. In order to claim compliance, Harper Inc. initially: | null | 3f91abfe-09e1-4519-a007-13fffc5d0a05 |
FinKnow | [
"Suitability",
"Fair dealing",
"Communication with clients and prospects"
] | null | Jason Briggs is a portfolio manager serving Alliance. Based on a consultant research analyst report Briggs will be undertaking a block trade for thirty client accounts by purchasing a pharmaceutical corporate bond issue. The company is categorized as highly risky with potential for strong returns. Using the firm's broker, shares of stock are allocated to each client's account based on current market price with commission being charged in proportion to account size. Martha Lake is one of Briggs' clients. The manager has decided to exclude her account from the trade allocation. During a discussion with Briggs she states, "As a child I had seen my parents undergo many financial hardships and so I am somewhat apprehensive towards uncertain situations." Two months later, the pharmaceutical's credit rating has improved. However, Briggs deems the issue as still being risky for Lake and does not inform Lake of the rating change. Which of the following CFA Institute Standards of Professional Conduct are most likely being violated? | null | 2fc2c6fb-9c47-4d3b-9963-037a7b67c5e7 |
FinKnow | [
"Equal-weighted indices.",
"Equal-weighted and market-capitalization weighted indices.",
"Equal-weighted, market-capitalization weighted and price-weighted indices."
] | null | For which of the following indices is rebalancing a major concern? | null | 34f27c75-9d32-427d-9514-5e626945683a |
FinKnow | [
"Momentum",
"Holiday effect",
"Earnings surprise"
] | null | Which of the following is not a time series anomaly? | null | 26947026-2763-4af2-8445-55a48bcb3618 |
FinKnow | [
"volatility is lower.",
"interest rates are lower.",
"interest rates are higher."
] | null | A long-term European put option will always be worth more than an otherwise identical short-term put option if: | null | 25dcc91a-bf06-42cf-a83c-3737f124fba2 |
FinKnow | [
"determined by market prices whereas in equal-weighted indices the weights always remain fixed.",
"arbitrarily determined whereas in equal-weighted indices the weights are assigned by the index provider.",
"determined by market prices whereas in equal-weighted indices the weights reflect the relative value of each security."
] | null | Which of the following statements best describes the weighing methods used in price-weighted and equal-weighted indices? In price-weighted indices, the weights are: | null | 0e3dddeb-2636-46b9-9610-27abcdfb5c88 |
FinKnow | [
"Claim priorities to the underlying assets are ranked.",
"Posting more collateral than is required to secure financing.",
"Providing a credit line to reimburse cash flow shortfalls backing the issue."
] | null | Which of the following is least likely an example of an internal credit enhancement? | null | 8a911069-7bbe-43f8-83fe-1230c9667cb5 |
FinKnow | [
"meets the definition of a firm as laid out by the GIPS standards.",
"policies and procedures for calculating performance are in compliance with the GIPS standards.",
"has complied with the composite construction requirements of the GIPS standards on a firm-wide basis."
] | null | Which of the following is least likely tested by the verification process? Whether the investment management firm ('s): | null | 9ebe4c9c-af9d-498f-b4a8-bf6298c007b5 |
FinKnow | [
"rely on the integrity of input data.",
"address every aspect of performance measurement.",
"have evolved over time to focus primarily on returns."
] | null | Which of the following most likely to be the key feature of GIPS standards? GIPS standards: | null | 0b97f6bf-0b66-4509-bf87-5a8bd4d48f8d |
FinKnow | [
"Compliance must be achieved on a firm-wide basis.",
"Compliance with the GIPS standards is enforced by legal and regulatory authorities.",
"Software vendors supplying performance calculation software programs to investment management firms can claim compliance with the GIPS standards."
] | null | Which of the following statements concerning claiming compliance with the GIPS standards is most likely correct? | null | b5373810-f82e-40be-9620-e083f64209f3 |
FinKnow | [
"Unsafe practices, Wants, Fear, Trivial",
"Unsafe practices, Distress, Fear, Serious",
"Safe practices, Wants, Jealousy, Trivial",
"Safe practices, Distress, Jealousy, Serious"
] | null | Typical advertising regulatory bodies suggest, for example that adverts must not: encourage _________, cause unnecessary ________ or _____, and must not cause _______ offence. | null | d16dff72-c3f6-4ab9-8089-e1672344ca28 |
FinKnow | [
"violation because her disclosure is not prominent.",
"compliance because she has disclosed the extent of her participation in the options.",
"violation because the acceptance of the agency options may impair her independence and objectivity."
] | null | Wallace Associates is a sell-side research firm with clients primarily from the financial services sector. Midland Trust is Wallace Associates' most recent client. Sarah Parker, a research analyst has been assigned Midland Trust. Parker is compensated with a basic research fee and agent options, which allow her to purchase 2% of her client's common shares if the stock performs well. After conducting thorough research using public sources, she determines that a buy recommendation will be most appropriate. She includes a small footnote at the end of the report that discloses the volume and expiration date of the options she is eligible for. According to the Standards of Practice Handbook, Parker is in: | null | f3b3398b-33e8-4772-9b2e-a91f44292c02 |
FinKnow | [
"Work-life balance",
"Healthy and safe working conditions",
"Employee privacy",
"Free Speech"
] | null | The Right to _______ has been a long-standing ethical concern for employees which today are addressed in most developed countries through a dense network of occupational health, safety and environmental regulations companies must abide by. | null | c19f0f0f-566b-4385-932c-a1bb2c2e5790 |
FinKnow | [
"Boundaryless, Control information, Private spaces",
"Public spaces, Maintain individual privacy, Private spaces",
"Boundaryless, Control information, Public spaces",
"Private spaces, Maintain individual privacy, Public spaces"
] | null | The enforcement of company privacy is complex as corporations are somewhat __________, as there are few clear barriers to define their limits, it is difficult to _________ due to the number of individuals involved and much corporate activity takes place in ________. | null | 0479bdc9-dd39-4dcf-b655-fcb6ada8a4c9 |
FinKnow | [
"Little power, Small contribution, Business malpractice",
"Little power, Major contribution, Corporate social responsibility",
"Huge power, Small contribution, Corporate social responsibility",
"Huge power, Major contribution, Business malpractice"
] | null | Businesses have _____ within society and have the potential to provide a ____ to society while ____ has the potential to inflict enormous harm on individuals, communities and the environment. | null | 0e01debd-0269-4b69-b6e3-d98e98738919 |
FinKnow | [
"Consumer inclusion",
"Consumer competence",
"Consumer exclusion",
"Consumer vulnerability"
] | null | The state of being unable to make an informed, reasoned decision about a product purchase is known as? | null | d0175251-b085-41d6-bf97-c97005d3abda |
FinKnow | [
"Power, Legitimacy, Salience Urgency",
"Legitimacy, Urgency, Salience, Power",
"Power, Legitimacy, Urgency, Salience",
"Salience, Power, Urgency, Legitimacy"
] | null | According to Mitchell et al (1997) ______, the perceived ability of a stakeholder to influence organisational action, ________ whether the organisation perceives the stakeholder's actions as desirable, proper and appropriate and ________, the immediacy of attention the stakeholder claims require, determine stakeholder ________. | null | ba17a9e2-fe20-49a1-bc3a-29ddefaa093b |
FinKnow | [
"Private regulation, Lobbying, Environmental, Fundraising",
"Private regulation, Consumer Marketing, Legal, Fundraising",
"Corporate political activity, Lobbying, Legal, Campaigning",
"Corporate political activity, Consumer marketing, Environmental, Campaigning"
] | null | ________ is any business effort to influence government or public policy. It includes activities such as __________, political advertising, financial contributions, ________ action and political ________. | null | d77b7b6c-ed39-44bb-b032-15f5c6d330dd |
FinKnow | [
"has negative working capital",
"cannot meet its budgeted level of profit",
"makes a loss",
"cannot pay creditors in full after realisation of its assets"
] | null | A company may become insolvent if it | null | d369ce14-59c4-45fe-991d-4e4e225b93fc |
FinKnow | [
"Interest, Certain, Speculative, Intangible assets",
"Interest, Uncertain, Assured, Intangible assets",
"Interest, Uncertain, Speculative, Tangible assets",
"Interest, Certain, Assured, Tangible assets"
] | null | Some of key differences between Islamic finance and conventional finance include - prohibition of charging and paying _______, prohibition on ______ and ______ transactions, prohibition of sinful investment and requirement for all financial products to be backed by __________. | null | 68eff9de-2288-4e15-93e2-959b95ddf0e7 |
FinKnow | [
"Business ethics is not a real concept as the rules and ethics of everyday life don't apply to the world of business.",
"Business Ethics is the study of business situations, activities and decisions where issues of right and wrong are addressed.",
"Business ethics cannot be defined as a real concept as it is an oxymoronic term.",
"Business ethics is concerned with the study of assessing the activities of a business based on their profitability."
] | null | Which of the following statements is correct? | null | 51200b68-9195-4a29-a8f9-7ec7974e22ef |
FinKnow | [
"Financial accounting, Environmental management initiatives",
"Financial accounting, Social accounting.",
"Social accounting, Financial accounting.",
"Annual report publication, Social accounting"
] | null | The focus on issues, the intended audience extending beyond shareholders and the voluntary nature of ___________ distinguish it from _________. | null | 8f28702c-aba5-4fb8-a452-5e5372a8f10b |
FinKnow | [
"Corporate rights, Corporate effect, Stakeholder",
"Corporate deniability, Corporate effect, Stakeholder",
"Corporate rights, Corporate responsibility, Stakeholder",
"Corporate rights, Corporate effect, Shareholder"
] | null | According to Evan and Freeman (1993), the Principle of ________ and the Principle of _______ can be used in a specific situation to determine who constitutes a _______. | null | a04c45d1-f122-436d-be1d-3e5670422913 |
FinKnow | [
"Annual reports, Company financial performance",
"Annual report, Internet - social media and networking",
"Codes of ethics, Company financial performance",
"Codes of ethics, Internet - social media and networking"
] | null | ________ are a business ethics management tool that have grown over the last few decades. Areas which these typically cover are compliance, corruption and environmental issues. However, they are constantly evolving, with for example, the onus on __________ having grown in recent years. | null | a3517786-6f35-4ad6-b617-80d14dcaf891 |
FinKnow | [
"Inspect inventory items that were ordered before the year end but arrived after the year end.",
"Test internal control activities that were previously reported to management as inadequate.",
"Review the client's cutoff bank statements for several months after the year end.",
"Compare the latest available interim financial statements with the statements being audited."
] | null | Which of the following procedures would an auditor generally perform regarding subsequent events? | null | 581db6ef-322e-43f0-ac85-a2d2f4eb60d4 |
FinKnow | [
"Accounting Standards Updates.",
"Emerging Issues Task Force Releases.",
"Statements of Financial Accounting Standards.",
"Staff Technical Bulletins."
] | null | The FASB makes changes to the Accounting Standards Codification by issuing | null | 9bb12a81-7892-4c37-a2f6-7c249cd210b1 |
FinKnow | [
"An employee who resigns regardless of cause is eligible for unemployment benefits.",
"The federal unemployment system is funded by both employer and employee taxes.",
"The Act is intended to assist workers who are permanently out of work and need assistance in supporting themselves.",
"The unemployment insurance system is administered by the states through their employment laws."
] | null | Which of the following statements is correct regarding the Federal Unemployment Tax Act? | null | c8a93f8f-46b6-4c0b-aea8-86308cba90f1 |
FinKnow | [
"Liable to pay State on the due date of the note.",
"Liable to pay State only if State first seeks payment from Royal.",
"Not liable to pay State because Royal's incompetency discharges Royal as a surety.",
"Not liable to pay State unless Brown was a compensated surety."
] | null | Brown cosigned Royal's $50000 note to State Bank. If Royal is later adjudicated mentally incompetent what would be Brown's liability on the note? | null | 442b5dd3-9501-43f3-94a4-3b7f78a39335 |
FinKnow | [
"Auditor suspects that management fraud has occurred during the year.",
"Desired assessed level of control risk is less than the prior year.",
"Technique to be used is attribute sampling.",
"Auditor plans to give greater representation to large recorded amounts."
] | null | In selecting an appropriate sample for a substantive test the auditor most likely would stratify the population if the | null | 35e57093-480a-4b01-bef3-016f26237402 |
FinKnow | [
"Make inquiries of management concerning restrictions on the availability of cash balances.",
"Communicate deficiencies in the design of internal control to the entity's audit committee.",
"Examine trend analysis to determine the appropriateness of the CPA's assessment of detection risk.",
"Evaluate management's plans for dealing with negative trends and financial difficulties."
] | null | Which of the following procedures does a CPA usually perform when reviewing the financial statements of a nonissuer? | null | 913186a8-35a7-4238-9366-bec5822e8a72 |
FinKnow | [
"Prior years’ depreciation expenses were erroneously understated.",
"Current year’s depreciation expense was erroneously understated.",
"The estimated remaining useful lives of plant assets were revised upward.",
"Plant assets were retired during the current year."
] | null | Which of the following explanations most likely would satisfy an auditor who questions management about significant debits to accumulated depreciation accounts in the current year? | null | 3b5f3fbd-f557-42b7-bd38-9449adff48d6 |
FinKnow | [
"Quoted prices for identical assets and liabilities in markets that are not active",
"Quoted prices for similar assets and liabilities in markets that are active",
"Internally generated cash flow projections for a related asset or liability",
"Interest rates that are observable at commonly quoted intervals"
] | null | Each of the following would be considered a Level 2 observable input that could be used to determine an asset or liability’s fair value, except | null | a70f8a96-d15f-451a-b510-223056ccd193 |
FinKnow | [
"Collusive pricing",
"Dual pricing",
"Predatory pricing",
"Transfer pricing"
] | null | Which of the following pricing policies results in establishment of a price to external customers higher than the competitive price for a given industry? | null | 7ce11b92-404b-48dd-abaf-6a2166c86a40 |
FinKnow | [
"Failure to sign a prepared tax return as a tax preparer.",
"Failure to provide a copy of a prepared tax return to the taxpayer.",
"Failure to notify a taxpayer about an inadvertent error on a tax return filed 10 years ago.",
"Failure to retain copies of prepared tax returns or a list of taxpayers for whom such returns were prepared for the last three years."
] | null | The Internal Revenue Code and the Regulations do not impose penalties on tax return preparers for which of the following? | null | 8884d579-baf7-48d1-91c3-2699dde89612 |
FinKnow | [
"A statement that the practitioner performed an examination of prospective financial statements.",
"A statement of scope limitation that will qualify the practitioner’s opinion.",
"A statement referring to standards established by the AICPA.",
"A statement of negative assurance based on procedures performed."
] | null | Which of the following statements should be included in a practitioner’s report on the application of agreed-upon procedures? | null | 780ade6e-a99a-4081-8106-86fbca9d0f7c |
FinKnow | [
"Lower Lower",
"Higher Higher",
"Lower Higher",
"Higher Lower"
] | null | Mast Co. converted from the FIFO method for inventory valuation to the LIFO method for financial statement and tax purposes. During a period of inflation would Mast's ending inventory and income tax payable using LIFO be higher or lower than FIFO? Ending inventory Income tax payable | null | 413111c5-14ef-4bc6-b872-a7530df6ca43 |
FinKnow | [
"Material misrepresentation and breach of contract.",
"Freedom from contributory negligence and loss.",
"Scienter and justifiable reliance.",
"Intent to deceive and privity."
] | null | Which of the following pairs of elements must a client prove to hold an accountant liable for common law fraud? | null | b3cf29a1-49ef-4224-b433-53a271ba332c |
FinKnow | [
"Blair ordered a dozen blue chairs from Kyle but Kyle delivered a dozen red chairs.",
"Leslie painted an entire room but failed to put the electrical outlet covers back on.",
"A contract required hair styling to be done to Toby's satisfaction but Toby was in good faith dissatisfied with the completed result.",
"A dentist competently completed the extraction of Lee's tooth but mistakenly pulled the wrong one."
] | null | Which of the following transactions correctly illustrates the doctrine of substantial performance? | null | 4a3ef334-8b52-474a-837f-d2f7325414da |