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Thread: Free CFA Level 1 Practice Questions for June 2013 exam

  1. #31
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    Quote Originally Posted by Simplilearn View Post
    Question of the day: 25th Feb,2013

    Mr. Good, CFA, is fund manager at Great Fund. Mr. Good notices in Great Fund's marketing material that the value of the assets under management in the fund is listed at a higher than actual value. The Marketing Manager of the fund justifies that the discrepancy is minor and the material when printed was correct. To avoid violating the CFA Institute Standards of Professional Conduct, Mr. Good should least likely take which of the following actions?

    A)Report the discrepancy to the Professional Conduct Program of CFA Institute.
    B)Provide correct information to his clients.
    C)Ask the marketing manager to correct the information at the earliest.
    Answer is A

  2. #32
    The correct option is A
    Standard I(A) applies when members and candidates know or should know that their conduct may contribute to a violation. Member or candidate must dissociate, or separate, from the illegal or unethical activity. Steps to dissociate from unethical activities include attempting to stop the behavior by bringing it to the attention of the employer.
    If first step fails than step away and dissociate from the activity. Inaction combined with continuing association may be construed as participation or assistance in the illegal or unethical conduct. Disclosure may be prudent under certain circumstances. Member or candidate may consult legal or compliance officer for guidance (it is not an option here).

  3. #33
    Question of the day: 26th Feb,2013

    An investor holding equities believes share prices will rise but wants protection in case the market falls. What is the most suitable option position?

    A)Purchase a call option
    B)Write a call option
    C)Purchase a put option

  4. #34
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    Quote Originally Posted by Simplilearn View Post
    Question of the day: 26th Feb,2013

    An investor holding equities believes share prices will rise but wants protection in case the market falls. What is the most suitable option position?

    A)Purchase a call option
    B)Write a call option
    C)Purchase a put option
    Put option gives the right to sell. So answer is C.

  5. #35
    The correct option is C
    The investor wants to hedge the risk of equities falling in value. Purchasing the option will allow him / her to sell shares at a pre-agreed price should the prices fall.

  6. #36
    Question of the day: 27th Feb,2013

    According to the classical view of fiscal policy, a decrease in aggregate demand will be followed by:

    A)A rise in prices, and an increase in aggregate supply so that GDP (measured by quantity) is maintained at the same level
    B)A fall in prices, and an increase in aggregate supply so that GDP (measured by quantity) is maintained at the same level
    C)A fall in prices, and an increase in aggregate supply so that GDP (measured by quantity) is permanently maintained at a lower level
    Last edited by Simplilearn; 28-02-2013 at 10:06 AM.

  7. #37
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    Quote Originally Posted by Simplilearn View Post
    Question of the day: 26th Feb,2013

    According to the classical view of fiscal policy, a decrease in aggregate demand will be followed by:

    A)A rise in prices, and an increase in aggregate supply so that GDP (measured by quantity) is maintained at the same level
    B)A fall in prices, and an increase in aggregate supply so that GDP (measured by quantity) is maintained at the same level
    C)A fall in prices, and an increase in aggregate supply so that GDP (measured by quantity) is permanently maintained at a lower level
    This is tough...probably A

  8. #38
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    Quote Originally Posted by Nidhi Taleja View Post
    This is tough...probably A
    I think the answer is:
    B) A fall in prices, and an increase in aggregate supply so that GDP (measured by quantity) is maintained at the same level

  9. #39
    The correct option is B
    Classicists argue that changes to aggregate demand do not affect the actual level of output.

  10. #40
    Question of the day: 28th Feb,2013

    The price elasticity of demand for a product tends to be small (less elastic) when

    A)product is inferior good.
    B)the good is broadly defined.
    C)there are many good substitutes for the product.

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