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CFA CFA I Exam
CFA Level I Chartered Financial Analyst (Page 37 )

Updated On: 26-Jan-2026
Page 37 of 793
PDF with 3960 Questions

XYZ company has entered into a "plain-vanilla" interest rate swap on $1,000,000 notional principal. XYZ company pays a fixed rate of 8 percent on payments that occur at 90-day intervals. Six payments remain with the next one due in exactly 90 days. On the other side of the swap, XYZ company receives payments based on the LIBOR rate. Describe the transaction between XYZ company and the dealer at the end of the sixth period if the appropriate LIBOR rate is 5 percent.

  1. XYZ company receives $12,500.
  2. Dealer pays XYZ company $7,500.
  3. Dealer receives $20,000.
  4. XYZ company pays dealer $7,500.

Answer(s): D

Explanation:

XYZ company owes the dealer ($1,000,000)(.08)(90/360) = $20,000. The dealer owes XYZ company ($1,000,000)(.05)(90/360) = $12,500. Net: XYZ company pays the dealer $7,500.



If a new option contract is listed on an option exchange and only one trader buys one contract in the first day, the open interest after that day is:

  1. two contract.
  2. zero contract.
  3. cannot be determined with this information.
  4. one contract.

Answer(s): D



A property has a potential gross rental income (PGRI) of $740,000. Operating expenses, excluding insurance and property taxes, amount to 30 percent of gross rents. Insurance and property taxes total $16,800. If the market capitalization rate is 22 percent, what is the value of this property?

  1. $1,726,667.
  2. $2,410,667.
  3. $2,430,909.
  4. $2,278,182.

Answer(s): D

Explanation:



You need to estimate the market value of an income producing property located in your town. Through research you have found that the property should have net operating income of $956,000, taxes of $143,400, a capitalization rate of 16 percent, and an inflation rate of 3 percent. What is the estimated property value?

  1. $5,078,750.
  2. $5,975,000.
  3. $7,353,846.
  4. $8,456,923.

Answer(s): B

Explanation:



Based on the following information, what is the net asset value (NAV) per share. There are currently no expenses and no load.
Cap Stock Sold $109,000
Price per share $10

  1. $13.26.
  2. $27.03.
  3. $15.96.
  4. $27.03.

Answer(s): C

Explanation:



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