Free CFA-Level-I Exam Braindumps
CFA® Level I Chartered Financial Analyst Questions 2151–2155 (page: 432)

Rocky Johnson, CFA, manages a large capitalization equity mutual fund. His superiors have requested that he provide them the appropriate benchmarks to compare future performance against. Johnson makes the following statements:
Statement 1:We should use an unweighted index because it would best reflect the large company bias in the portfolio.
Statement 2:Stocks in the portfolio frequently split the number of shares outstanding. Therefore, in the long run, the Dow Jones Industrial Average would best reflect these events.
Are Johnson's two statements correct?

Which of the following assumptions is least likely to be consistent with the concept of efficient capital markets?

Sal Nunn, CFA, is a portfolio manager at Walker Investments. Nunn sold 300,000 shares of a NASDAQ listed stock on an electronic crossing network in after hours trading because the company announced a significant negative earnings surprise. Indicate whether the third or fourth market best describes the Nunn trade and state whether the NASDAQ market is a call or continuous market.

An investor purchased 100 shares of a stock two years ago for $50 per share after deciding the stock would be a good value investment. Since the initial purchase, the stock price has fallen to $35 per share after several of the company's major customers canceled contracts. The investor has decided to purchase another 50 shares at the lower price. Which of the following behavioral biases best characterizes the investor's actions?

Ian Lance, CFA, is discussing short selling with a client and states, "The short seller must pay any dividend of the issuer to the lender of the stock. In addition, the short seller must provide some collateral to the brokerage house." Is Lance correct about the short seller's obligations?