CFA Same Exam 3 Questions

Too long to type # 25. Starts like this company entered into a 3 year construction project. If someone is working on it please help. I don’t understand how they got 400K under completed contract method. I thought you don’t collect anything until you recoup the cost, which did not occur under the circumstances…

just going by memory here, I believe the Q is asking about cash balances, which in this case is cash received minus costs incurred. You’re thinking of profit which is not recognized till the final year of the project, but that’s entirely different. cash balances are the same under both methods.

Just took #3 and Lola is correct. They ask about the cash balance, not recognized earnings. If you look at the table carefully, you will see one row specifies cash received and the other cash paid.

Thank you both you are exactly right… miss read…

Sorry for the derail, I hate how this forum doesn’t have PM… SanyaizSanDiego, where in San Diego are you located? If you can fit it in your schedule, we should meet up and do a quick review of everything either tomorrow or Thursday. I’ll be at the SDSU library all day, everyday 'til friday. My email address is in my profile.

Sorry no longer in SD, otherwise I would. But good luck to you on the exam…

I just read a question that said that towards the peak of the business cycle basic material industries outperform the others. I look in the book and it show me that its best to buy commodities (@ Recovery & Recession) I don’t think that would be the peak. Does anyone know where I can find that info and/or have more questions like this?

recovery- commodities, cyclicals early expansion- stocks and real estate late expansion - bonds and interest sensitive stocks slow entering recession - bonds and interest sensitive stocks recession - commodities and stocks

So where does peak land in this category. I was thinking somewhere in between late expansion and slow entering recession… what do you think ?

I remember this question as well. I read the CFAI book carefully. It does say commodity will be peaking during late expansion.

My book only shows what what barthezz wrote. I don’t see any signs saying commodities will be good in late expansion. I can remember that but I’m afraid I’m missing more info for other stages…