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CFA-Level-1 – Chartered Financial Analyst Level 1

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Showing 7–9 of 12 questions

Question 7 (Financial reporting and Analysis)

Which of the following statements about contrary-opinion and smart money technicians is INCORRECT?

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    When margin balances in brokerages accounts increase, contrary-opinion technicians are bearish.
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    The investment advisory ratio is at 0.65. Contrary-opinion technicians are bullish.
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    The OTC volume is less than 87% of the NYSE volume. Investors are bearish.
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    A narrowing of the T-bill - Eurodollar futures spread is a signal for a smart-money technician to buy.
Question 8 (Ethics)

Which of the following will result in an insider trading prosecution?

I. A tippee trades based on inside information, not knowing that the source of the information hasactually received the information illegally and has breached fiduciary duty to the shareholders by leaking it. He has no reasons to suspect such a behavior.

II. A corporate outsider who has absolutely no connections to any of the insiders misappropriatesinside information and trades for profit based on that information.

III. A tippee trades based on inside information about an impending tender offer after verifying thatthe source of the information has not breached any fiduciary duty to the company.

Select an option, then click Submit answer.

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    I only
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    III only
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    I, II and III
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    II and III only
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    A tippee trades based on inside information, not knowing that the source of the information hasactually received the information illegally and has breached fiduciary duty to the shareholders by leaking it. He has no reasons to suspect such a behavior.
    II. A corporate outsider who has absolutely no connections to any of the insiders misappropriatesinside information and trades for profit based on that information.
    III. A tippee trades based on inside information about an impending tender offer after verifying thatthe source of the information has not breached any fiduciary duty to the company.
Question 9 (Financial reporting and Analysis)

In a period of falling prices, the FIFO inventory method

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    neither of these answers is correct
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    both of these answers are correct
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    magnifies the effects of the business cycle on income
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    gives the lowest possible value for ending inventory