CFA Institute CFA-Level-I Exam Practice Test Instant Access

Question 1

An investor buys a 25-year, 10 percent annual pay bond for $900 planning to sell the bond in 5 years when he estimates yields will be 9 percent. What is the estimate of the future price of this bond?

A$964.

B$1,000.

C$1,122.

D$1,091.

Answer : D

Question 2

What rate should be used to estimate the potential return on this bond?

Athe YTM.

B12.00%.

C10.34%.

Dthe YTC.

Answer : D

Question 3

What is the bond's yield to maturity (YTM)?

A9.26%.

B10.34%.

C10.05%.

D10.55%.

Answer : B

Question 4

What is the bond's yield to call (YTC)?

A10.05%.

B9.26%.

C10.34%.

D10.55%.

Answer : A

Question 5

Which of the following are considered basic characteristics of a security and must be included in research reports?

Abusiness risk

Bdegree of uncertainty

Cannual expected income

Dyield-to-maturity

Eall of these answers

Fboth degree of liquidity and yield-to-maturity

Gexpected annual rate of return

Answer : E

Question 6

The disclosures for retroactive compliance apply to composites formulated prior to ________.

AJanuary, 1989

BJanuary, 1992

CJanuary, 1991

DJanuary, 1993

EJanuary, 1990

Answer : D

Question 7

According to Standard IV (A.2), members should consider including the following information in research reports, except:

Athe methodology that drove the investment decisions.

Byield-to-maturity.

Cannual amount of income expected.

Ddegree of uncertainty associated with the cash flows.

Ebusiness, financial, political, sovereign and market risks.

Fnone of these answers.

Gdegree of marketability / liquidity.

Hexpected annual rate of return.That answer is correct!

Answer : A

CFA Institute CFA-Level-I CFA Level I Chartered Financial Analyst Exam Practice Test