单选题Consider the following statements: Statement 1: "When oligopoly firms cheat on price fixing agreements, the resulting price and output quantity approaches that of perfect competition. " Statement 2: "Monopolistic competition is inefficient because a large deadweight loss from advertising and marketing costs is a characteristic of this form of competition. " Which of the following best describes the accuracy of these statements? Statement 1 Statement 2 ①A. Incorrect Correct ②B. Correct Incorrect ③C. Correct Correct A. ①B. ②C. ③

单选题An analyst does research about cost of common equity. With respect to calculating the cost of equity using the bond yield plus risk premium approach, which of the following statements about the risk premium is least accurate? A. The risk premium compensates for the additional risk of equity compared with debt. B. We often estimate the risk premium using historical spreads between bond yields and stock yields. C. In developed country markets, a typical risk premium added is in the range of 2 to 4 percent.

单选题When a client asks her how she makes investment decisions, Petra Vogler, CFA, tells the client she uses mosaic theory

单选题Joseph Adams must diagram the security market line (SML) in order to determine if several assets he is considering adding to his portfolio are fairly priced. Adams observes that the risk-free rate currently available in the market is 4.2 percent. Adams has also calculated the required return on the market portfolio to be 13.5 percent. Which of the following statements is FALSE? A. The SML must be graphed using the standard deviation of the market portfolio. B. Securities plotting above the SML are undervalued. C. The intercept of the SML in this case is equal to 4.2%.

单选题A company has $30 million in debt outstanding with coupon rate of 15%. Currently the yield to maturity (YTM) on these bonds is 12%. If the firm"s tax rate is 30%, what is the company"s after-tax cost of debt?

单选题Which of the following is least likely to be cited as a limitation of discretionary fiscal policy stabilizers?

单选题Which one of the following is most likely to contribute to the presence of monopoly in an industry? A. Legal barriers to entry into the industry. B. Diseconomies of scale. C. An elastic market demand for the product produced by the industry.

单选题Which of the following statements is least accurate? A firms free cash flow to equity (FCFE):

单选题A real estate investment has the following characteristics: Annual rental income $ 2700000 Annual operating expenses $1800000 Available mortgage rate 6% Financing percentage 90% Required holding period 5 years Investor Tax rate 25% Based on the income approach, the value of the investment is closest to:

单选题Which of Karabon's assumptions about the capital market theory is least accurate? A. Every investor has the same market expectations, which allows for the identification of the optimal portfolio. B. Investors can borrow at the risk-free rate and know in advance about their real cash flows. C. All investors make investment decisions for the same reasons, considering only expected return and standard deviation.

单选题Bob Smith, CFA, is an outside board member of Atlantic Technologies, but is not paid by the firm for his services. An employee at Atlantic informs Smith that Atlantic has improperly timed the booking of contracts to achieve the desired quarterly financial results. The misleading financial statements would turn losses into profits. Smith confers with the firm's legal counsel who indicates that this conduct is, in fact, illegal. Smith urges Sharon White, Atlantic's chief operating executive, to change the financial statements, but she refuses to do so. According to CFA Institute Standards of Professional Conduct, which of the following statements best describes what Smith should do in this situation? A. Smith should immediately make CFA Institute aware of the situation at Atlantic. B. Smith should wait until the next board meeting, which is scheduled in two weeks, to make other board members aware of the situation. C. Smith should promptly disassociate himself from Atlantic's actions by resigning as a director or by reporting the activities to the appropriate authorities.

单选题Total investment is one of the components of a country's GDP. Which of the following is least likely to be considered a source of funds for investment?

单选题An analyst does research about bond price and gathers the following information about a callable bond: Par value $1000000 Current market value $923686 Effective duration 3.5 Modified duration 3.1 If yields are expected to increase by 125 basis points, the expected price change for the bond is closest to: A. -$35793 B. -$40411 C. -$4,3750

单选题Monte Carlo simulation is best described as:

单选题Which of the following statements about bonds, indexes, markets, and market efficiency is FALSE ? A. A price-weighted index assumes the investor holds an equal number of shares of the stocks in the index. B. Tests of market efficiency find that stock exchange specialists derive above-average returns. C. The bulk of all bond trading takes place on organized exchanges.

单选题Which of the following statements about the short sale of a stock is least accurate?

单选题Which of the following does the U.S. central bank most often use to change the money supply? A. The discount rate. B. The deposit expansion multiplier. C. Open market operations.

单选题Thefollowinginformationaboutacompanyisprovided:Account$ThousandsContributedcapital,beginningoftheyear50Retainedearnings,beginningoftheyear225Salesrevenuesearnedduringtheyear450Investmentincomeearnedduringtheyear5Totalexpensespaidduringtheyear402Dividendspaidduringtheyear10Totalassets,endoftheyear800Totalliabilities(in$thousands)attheendoftheyearareclosestto:

单选题Negative convexity is most likely to be observed in: A. callable bonds. B. zero coupon bonds. C. municipal bonds.

单选题The supply of a renewable resource is: A. perfectly elastic. B. the known stock. C. perfectly inelastic.