B C B C C A
@ Damil4real, cheers for the questions, good practice!
brainpower, you got 67% right. raw, you got 33% right. zaina.breik, you got 83% right.
Correct Answers: B C B C C C Nice try everyone!
B A B C B A
gauri, you got 50% right.
nice questions, thanks Damil!
Can someone explain #5 and 6? The answer to both are C but that doesn’t make much sense to me…
can someone explain 1 and 2 please?
------------------------------------- 5) If an increase in aggregate demand is greater than expected, actual inflation is: A) less than expected inflation and unemployment decreases. B) greater than expected inflation and unemployment increases. C) greater than expected inflation and unemployment decreases. Answer - C Reasoning —> Greater than expected increase in aggregate demand suggests that actual inflation will exceed expected inflation and unemployment will decrease. Look at it this way…, aggregate demand is more than expected, prices will increase causing more inflation and decrease in unemployment. Look at the Phillips curve and you should see it clearly. ------------------------------ 6) In a discussion about the factors that determine a firm’s demand of labor, Kathleen Jorgensen asserts the following: Statement 1: A firm’s marginal revenue curve is equivalent to its short-term demand curve. Statement 2: A decrease in the equilibrium market price of a firm’s product will increase the firm’s demand for labor because the firm will sell more units of the product. Statement 1 Statement 2 A) Correct Incorrect B) Correct Correct C) Incorrect Incorrect Answer - C Reasoning —> The marginal revenue product of labor (MRP) curve defines a firm’s short-run labor demand curve. MRP is the gain in total revenue from selling the additional output from employing one more unit of labor. A decrease in the equilibrium market price of a good reduces the MRP of the labor used to produce that good. The result is a decrease in the firm’s demand for labor.
-------------------------------- 1) An analyst has not paid her CFA Institute dues for several years but has filed a professional conduct statement annually. Which of the following statements is true regarding her status with the CFA Institute? The analyst’s membership is: A) considered “inactive” B) suspended and she is not considered a CFA charterholder C) temporarily suspended until she pays her dues. Answer - B Standard VII(B), Reference to CFA Institute, the CFA Designation, and the CFA Program, applies. In order to use the CFA designation, the member must pay annual dues AND submit a yearly Professional Conduct Statement. -------------------------------------------------- 2) Tony Calaveccio, CFA, is the manager of the TrustCo Small Cap Venture Fund in Toronto. He places trades for the fund with River City Brokerage. River City provides calaveccio with soft dollars to purchase research. River City also deals in municipal bonds, some of which Calaveccio holds in his personal portfolio. He periodically uses the soft dollars to request research reports on various small cap stocks and also on the status of the municipal bond market and issues that he holds. These actions are: A) not in violation of the Code and Standards. B) in violation of his fiduciary duties regarding both the small cap research and the municipal bond research. C) in violation of his fiduciary duties regarding the municipal bond research but no so regarding the research on the small cap issues. Answer - C Reasoning —> The issue at hand is the member’s fiduciary responsibilities in handling “soft dollars” which are technically the property of the client. Standard III(A), Loyalty, Prudence, and Care, delineates the member’s fiduciary responsibilities with regards to soft dollars. Since municipal bond research is clearly not relevant to the Small Cap Fund holders, he is clearly using the soft dollars to obtain research for his personal benefit and is in violation of the Standard.