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Free CFA-Level-I Exam Braindumps (page: 39)

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PDF with 3963 Questions

In the presentation of real estate performance, disclose any changes in ________, including unrealized gains

and losses.

  1. accounting
  2. investment earnings
  3. valuation
  4. audit practices
  5. cash flow

Answer(s): C

Explanation:

Questions have arisen about the effects of real estate appraisals on recognizing gains or losses in value in performance periods. Consistent with industry practices, the AIMR-PPS require that changes in valuation, including unrealized gains and losses, be recognized in the reporting period that includes the effective date of the appraisal.



Relationships with and Responsibilities to Clients and Prospects are dealt with under:

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

Answer(s): F

Explanation:

Relationships with and Responsibilities to Clients and Prospects are dealt with under Standard IV.



Mike Jordan recently met his old friend, Charlie Barklee, who's an accomplished statistician. Charlie showed him his new model for predicting stock prices and after considerable discussion, Mike was convinced the model was a viable alternative to his current methodology for picking stocks. To test it, he downloaded historical data from a well-known statistical data provider's web site. The tests indicated that some parts of the model needed fine tuning, which Mike implemented himself, without Charlie's help. Mike:

  1. cannot circulate the model since it is not publicly available.
  2. can show his clients the model, without any special disclosures, because all of the tests were done by him with publicly available data.
  3. none of these answers.
  4. must acknowledge Charlie's contribution. Otherwise, he would be in violation of the code of ethics and be subject to disciplinary action from AIMR.

Answer(s): D

Explanation:

Standard II (C) - Prohibition against Plagiarism.



The ________ assumption must be disclosed if results are presented after taxes.

  1. composite
  2. tax rate
  3. settlement-date
  4. selection
  5. trade

Answer(s): B

Explanation:

To be in compliance with the PPS, a firm's presentation of its investment performance must disclose the tax rate information.






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