Free CFA-Level-I Exam Braindumps

Standard ________ pertains to fair dealing with customers and clients.

  1. III (B)
  2. IV (3)
  3. IV (A)
  4. I (D)
  5. None of these answers

Answer(s): B

Explanation:

Standard IV (B.3) states: "Members shall deal fairly and objectively with all clients and prospects when disseminating investment recommendations, disseminating material changes in prior investment recommendations and taking investment action."



Social investments:

  1. should never be used in pension fund investing.
  2. in pensions must be well thought-out, making sure that such investments are legal and do not impair the integrity of the funds in questions or the financial security of the participants or beneficiaries.
  3. none of these answers.
  4. have yet to be used as an investment in pension funds in the U.S.
  5. are proper investment vehicles for pensions, since they are a "public good."

Answer(s): B

Explanation:

In a pension plan, the first and foremost duty of the fiduciary is to the plan participants and their beneficiaries rather than to the plan sponsor that has the power to hire and fire the investment manager. Consequently, if urged to make investments that might be of direct benefit to a sponsoring community or to the community at large, the manager must ensure that such investments are legal and do not impair the integrity of the funds in question or the financial security of the participants/beneficiaries.



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

  1. business risk
  2. degree of uncertainty
  3. annual expected income
  4. yield-to-maturity
  5. all of these answers
  6. both degree of liquidity and yield-to-maturity
  7. expected annual rate of return

Answer(s): E

Explanation:

Members should include the following information in research reports:
- expected annual rate of return
- annual amount of income expected (current and future)
- current rate of income return of yield to maturity
- degree of uncertainty associated with cash flows
- degree of marketability/liquidity
- business, financial, political, sovereign and market risks



Fundamental Responsibilities is dealt with under:

  1. Standard I
  2. Standard III
  3. None of these answers
  4. Standard V
  5. Standard II
  6. Standard IV

Answer(s): A

Explanation:

Fundamental Responsibilities is dealt with under Standard I.






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