Cisco®
CompTIA
ISC
EC-Council
EXIN
Fortinet
ITIL®
Juniper
Microsoft
VMware
Avaya
SAP
Google
NVIDIA
Salesforce
Amazon
Palo Alto Networks
ISC2
Splunk®
ServiceNow®
All Vendors
  2. Home
  3. Exams
  4. Test Prep
  5. CFA-Level-I

CFA-Level-I: CFA® Level I Chartered Financial Analyst
Free Practice Exam Questions (page: 66)
Updated On: 2-Jan-2026

Page 66 of 496
PDF with 3963 Questions

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?

  1. Escalation bias.
  2. Momentum bias.
  3. Overconfidence bias.

Answer(s): A



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?

  1. Yes.
  2. Lance is correct about paying the dividend, and incorrect about providing collateral.
  3. Lance is incorrect about paying the dividend, and correct about providing collateral.

Answer(s): A



An analyst is using the following information to value AGF Company's common shares. AGF paid a dividend of $1.90 per share last year. Dividends are expected to grow at 6% forever. The risk-free rate is 5%, the market risk premium is 7%, and the beta of the common shares is 1.3. The value of the AGF Company's common shares is closest to:

  1. $23.46
  2. $24.86
  3. $33.57

Answer(s): B



In valuing the stock of Evergreen Enterprises, an analyst compiles the following information about the firm:
The value of the firm's stock today is closest to:

  1. $31.80
  2. $38.55
  3. $53.00

Answer(s): A

Explanation:



Radio Corp. owns a leading radio network with 200 million weekly listeners. To combat a declining radio audience, the company has implemented a strategy of targeting the Hispanic audience. After careful analysis, Radio Corp. makes the decision to acquire a Hispanic radio station, rather than convert existing radio stations. The acquisition strategy benefits from rules that allow clustering of ownership of local radio stations. The basis of the strategic initiative and the basis of the acquisition strategy, respectively, are:

  1. market timing and geography
  2. lifestyles and technology
  3. demographics and regulation

Answer(s): C

Explanation:



An analyst develops the following information to value a common stock.

The analyst estimates the required rate of return and uses a DDM to value the shares. The value per share is closest to:

  1. $14.39
  2. $21.28
  3. $31.39

Answer(s): A



Jack Saunders is analyzing Barco Incorporated, an industrial conglomerate company. Saunders is estimating the intrinsic value for Barco Incorporated by forecasting the company's earnings per share and earnings multiplier. Which of the following attributes of Barco is least likely to increase the company's earnings multiplier?

  1. Barco Incorporated has never had a restructuring charge in its history.
  2. Barco Incorporated^ earnings move in tandem with overall economic growth.
  3. Barco Incorporated's dividend has been increasing for the last 30 years.

Answer(s): B

Explanation:



Brad Kit, CFA, is analyzing the broadcasting industry. Kit has narrowed his analysis to Willow Corp. and Vision Inc.
Willow Corp. is a media company with a diversified group of leading TV, newspaper, and cable news operations. Revenues and earnings have grown slightly over the past ten years. The company's long-term debt to capital ratio is 40%. During the last recession, the company's earnings remained flat with the prior year. Still, Kit believes that Willow Corp. will have positive earnings surprises over the next several quarters, due to several new programs that have been hugely successful.
Vision Inc.'s operations are located in emerging markets with a high degree of political and regulatory risk. However, the TV, radio, and internet operations have the potential for extraordinary returns. Vision's stock is trading at 30 times next year's earnings and five times book value. A client asks Kit whether Willow Corp. is a growth company or growth stock and whether Vision Inc. is a speculative company or speculative stock. Kit's most appropriate response would be that:

  1. Willow Corp. is a growth stock and Vision Inc. is a speculative stock.
  2. Willow Corp. is a growth company and Vision Inc. is a speculative stock.
  3. Willow Corp. is a growth stock and Vision Inc. is a speculative company.

Answer(s): C



Viewing page 66 of 496
Viewing questions 521 - 528 out of 3963 questions



Post your Comments and Discuss Test Prep CFA-Level-I exam prep with other Community members:

CFA-Level-I Exam Discussions & Posts