2024 CFA Program Curriculum Level I Volume 1 1st Edition CFA Institute - Solutions

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What do you feel are ingredients to the “secret sauce” for you to successfully transition to a true strategic business partner and advisor?
Do you feel that the emerging technology topics as discussed in this text will help or hinder this process?
Are you ready to become a strategic advisor, from both an operational and technical perspective?
Has the decrease in digital storage cost been helpful or hurtful to organizations seeking ot make better use of data?
Ho can automaton and other emerging technology make it more difficult and less efficient to communicate and store organizational data?
How can automation assist in making better use of organizational data?
Is the data produced within your clean, able to by relied on, and consistently communicated to external and?
If not have you set in a motion a plan or process to help integrate these tools than what appear to be the strategy for said oosl
Based on your understanding of both the technologies and applications are thee definitions set to cause disruption within the existing service stack
What has your firm done, or has in the pipeline with regards to business use cases for these emerging technologies
How do you think greater ESG investing will change, if at a11 the capital allocation process among institutional investors
Name the six (6) capitals and think of how the descriptions provided in this book might also apply to your business or firm?
What is an integrated report, and how does it differ from a traditional financial report
What are the top three (3) items you would like to be addressed from a regulatory bodies, including tax and audit considerations.
Are there are other classes or business archetypes that seem well positioned to leverage these technologies even as professional standards lag?
How will the roles and responsibilities or accounting and attestation professionals change as emerging technology like blockchain and AI becomes increasingly integrated into the profession?
What trends and forces appear to be most important to your individual firm as emerging technology trends, including those mentioned in this text, seem to be having a larger impact on the professional
How are you, from an individual and institutional perspective, adapting to the changing technology and financial services landscape?
Based on the reading of this text, and your current understanding of emerging technologies, does it appear that these technologies will benefit of harm the financial services landscape?
How will the accounting and auditing profession evolve to keep pace with these technological evolution?
Does it appear that automation tools, which can automate data processing and reporting, will help or hurt the creation of internal controls.
What is the current level of transparency and data granularity that is available as a result of these analyses?
Does your firm, and/or client organizations, have an internal control policy that is consistently updated?
Are the tools and platforms currently in use at your organization or client firms sufficient enough to gather and report on the wide array of customer data, including those connected to
Have you and your firm dealt with the issues of investors or customers seeking our more sustainability oriented ETFs and investment options?
Even with the inevitable technical training confusion that does tend to accompany any new technology tool, does it seem reasonable to expect that these sophisticated technologies will ultimately add
Are the tools and platforms currently in use at your organization or client firms sufficient enough to gather and report on the wide array of customer data, including those connected to
Have you and your firm dealt with the issues of investors or customers seeking our more sustainability oriented ETFs and investment options?
Even with the inevitable technical training confusion that does tend to accompany any new technology tool, does it seem reasonable to expect that these sophisticated technologies will ultimately add
Where does it appear that RPA and automation tools like it will impact first in the financial services space?
Will the combination or RPA and AI lead to job disruption and losses, or be utilized to promote greater job flexibility and responsibility?
How does robotic process automation differ from artificial intelligence and other automation programs, and is this a good thing or not?
Identify some of the core accounting issues and considerations that will need to be addressed prior to broader adoption of either stablecoins or DAO’s.
How does a decentralized autonomous organization function, and what does that mean from a business application perspective?
What exactly are stablecoins? Consider 3–4 ways that they differ from other cryptocurrency options, paying particular attention to the business implications of these differences?
Smart contracts have many potential use cases, including some for financial services; what are some of the most promising pain points that can be addressed via smart contracts?
Can payment channels hold the key and potential promise to broader blockchain and cryptocurrency adoption?
How are security token offerings, initial coin offerings, and airdrops different from each other and similar to each other?
What is a stablecoin, and how does it fundamentally differ from traditional, or fully decentralized cryptocurrencies?
Based on your understanding, does the regulatory uncertainty connected to cryptocurrencies seem to be encouraging centralization or further decentralization?
Have you already experienced client questions or concerns related to cryptocurrency adoption and utilization among client or customers?
Have you or your firm dealt with any regulatory or legal issues associated with these technology tools.
Do clients seem to be knowledgeable or interested in emerging technologies such as blockchain, artificial intelligence, robotic process automation, and cryptocurrencies.
What is your current comfort level, at an organizational and individual level, with these emerging technology tools?
Exhibit 1 presents selected information for five debt securities. All five investments promise only a single payment at maturity. Assume that premiums relating to inflation, liquidity, and default
Consider the following annual return for Fund Y over the past five years:The geometric mean return for Fund Y is closest to: A. 14.9 percent. B. 15.6 percent. C. 19.5 percent. Exhibit 1: Five-Year
Which of the following risk premiums is most relevant in explaining the difference in yields between 30-year bonds issued by the US Treasury and 30-year bonds issued by a small, private US corporate
An analyst obtains the following annual rates of return for a mutual fund, which are presented in Exhibit 3. The fund’s holding period return over the three-year period is closest to:A. 0.18
An investor purchased 100 shares of a stock for USD34.50 per share at the beginning of the quarter. If the investor sold all of the shares for USD30.50 per share after receiving a USD51.55 dividend
A portfolio manager invests EUR5,000 annually in a security for four years at the following prices:The average price is best represented as the:A. harmonic mean of EUR76.48.B. geometric mean of
An analyst observes the following annual rates of return for a hedge fund, which are presented in Exhibit 4. The fund’s geometric mean return over the three-year period is closest to:A. 0.52
Consider the annual return data for the group of countries in Exhibit 5. Calculate the arithmetic and geometric mean returns over the three years for the following three stock indexes: Country D,
A fund receives investments at the beginning of each year and generates returns for three years as follows:Which return measure over the three-year period is negative?A. Geometric mean return B.
Which of the following statements regarding arithmetic and geometric means is correct?A. The geometric mean will exceed the arithmetic mean for a series with non-zero variance.B. The geometric mean
Suppose an investor invests EUR1,000 each month in a particular stock for n = 2 months. The share prices are EUR10 and EUR15 at the two purchase dates. What was the average price paid for the
Each year in December, a securities analyst selects her 10 favorite stocks for the next year. Exhibit 7 presents the P/Es, the ratio of share price to projected earnings per share (EPS), for her top
At the beginning of Year 1, a fund has USD10 million under management; it earns a return of 14 percent for the year. The fund attracts another net USD100 million at the start of Year 2 and earns a
An investor is evaluating the returns of three recently formed ETFs. Selected return information on the ETFs is presented in Exhibit 20:Which ETF has the highest annualized rate of return?A. ETF 1 B.
Ulli Lohrmann and his wife, Suzanne Lohrmann, are planning for retirement and want to compare the past performance of a few mutual funds they are considering for investment. They believe that a
Strubeck Corporation sponsors a pension plan for its employees. It manages part of the equity portfolio in-house and delegates management of the balance to Super Trust Company. As chief investment
The price of a stock at t = 0 is USD208.25 and at t = 1 is USD186.75. The continuously compounded rate of return, r1,T for the stock from t = 0 to t = 1 is closest to:A. –10.90 percent.B. –10.32
Your task is to compute the investment performance of the Walbright Fund for the most recent year. The facts are as follows: ■ On 1 January, the Walbright Fund had a market value of USD100
A USD25 million equity portfolio is financed 20 percent with debt at a cost of 6 percent annual cost. If that equity portfolio generates a 10 percent annual total investment return, then the
The manager of a Canadian pension fund knows that the fund must make a lump-sum payment of CAD5 million 10 years from today. She wants to invest an amount today in a guaranteed investment contract
An investment manager’s gross return is:A. an after-tax nominal, risk-adjusted return.B. the return earned by the manager prior to deduction of trading expenses.C. an often used measure of an
An analyst seeks to evaluate three securities she has held in her portfolio for different periods of time. ■ Over the past 100 days, Security A has earned a return of 6.2 percent. ■ Security B
An investor is evaluating the returns of three recently formed exchange-traded funds. Selected return information on the exchange-traded funds (ETFs) is presented in Exhibit 16. 1. Which ETF has the
The strategy of using leverage to enhance investment returns:A. amplifies gains but not losses.B. doubles the net return if half of the invested capital is borrowed.C. increases total investment
At the beginning of the year, an investor holds EUR10,000 in a hedge fund. The investor borrowed 25 percent of the purchase price, EUR2,500, at an annual interest rate of 6 percent and expects to pay
An analyst observes the following historic asset class geometric returns: 1. The real rate of return for equities is closest to:A. 5.4 percent.B. 5.8 percent.C. 5.9 percent.2. The real rate of
Let’s return to Example 8. After reading this section, Mr. Lohrmann decided that he was not being fair to the fund manager by including the asset management fee and other expenses because the small
Grupo Ignacia issued 10-year corporate bonds two years ago. The bonds pay an annualized coupon of 10.7 percent on a semiannual basis, and the current annualized YTM is 11.6 percent. The current price
While most governments issue fixed coupon bonds with principal paid at maturity, for many government issuers such as the United States, United Kingdom, or India, investors buy and sell individual
Grey Pebble Real Estate seeks a fully amortizing fixed-rate five-year mortgage loan to finance 75 percent of the purchase price of a residential building that costs NZD5 million. The annual mortgage
At the height of the COVID pandemic, the government of Greece issued a 2 percent annual coupon bond maturing in seven years. 1. If the observed YTM at issuance was 2.00 percent, what was the
Consider the 20-year Republic of India government bond from which the discount bond in Example 1 was separated (or stripped). The bond was issued at an annualized coupon rate of 6.70 percent and a
Mylandia Corporation pays an annual dividend to its shareholders, and its most recent payment was CAD2.40. Analysts following Mylandia expect the company’s dividend to grow at a constant rate of 3
Suppose Mylandia announces that it expects significant cash flow growth over the next three years, and now plans to increase its recent CAD2.40 dividend by 10 percent in each of the next three years.
In 2020, KB Financial (the holding company for Kookmin Bank) issued KRW325 billion in perpetual bonds with a 3.30 percent quarterly coupon. 1. Calculate the bond’s YTM if the market price was
Consider a Swiss Confederation zero-coupon bond with a par value of CHF100, a remaining time to maturity of 12 years and a price of CHF89. In three years’ time, the bond is expected to have a price
Grupo Ignacia issued 10-year corporate bonds four years ago. The bonds pay an annualized coupon of 10.7 percent on a semiannual basis, and the current price of the bonds is MXN97.50 per MXN100 of par
Shipline PLC is a company that pays regular dividends of GBP1.50 per year, which are expected to continue indefinitely. 1. What is Shipline’s expected stock price if shareholders’ required rate
Mylandia Corporation stock trades at CAD60.00. The company pays an annual dividend to its shareholders, and its most recent payment of CAD2.40 occurred yesterday. Analysts following Mylandia expect
Recall that based on a constant GBP1.50 annual dividend and required return of 15 percent, we showed Shipline PLC’s expected stock price to be GBP10.00. Suppose instead that an investment analyst
An analyst observes the benchmark Indian NIFTY 50 stock index trading at a forward price-to-earnings ratio of 15. The index’s expected dividend payout ratio in the next year is 50 percent, and the
If you require an 8 percent return and must invest USD500,000, which of the investment opportunities in Exhibit 1 should you prefer?A. Opportunity 1 B. Opportunity 2 C. Indifferent between the two
In 2016, German 10-year government bond investors faced a price of EUR100.50 per EUR100 principal and an annual YTM of −0.05 percent at issuance. That is, the German 10-year government bond was
Recall from Example 2 that seven-year Greek government bonds issued in 2020 with a 2.00 percent annual coupon had a price of EUR93.091 per EUR100 principal two years later. 1. What is the implied
Italian one-year government debt has an interest rate of 0.73 percent; Italian two-year government debt has an interest rate of 1.29 percent. The breakeven one-year reinvestment rate, one year from
Coca-Cola Company stock trades at a share price of USD63.00 and its annualized expected dividend per share during the next year is USD1.76. 1. If an analyst expects Coca-Cola’s dividend per share
The current exchange rate between the euro and US dollar is USD/EUR1.025. Risk-free interest rates for one year are 0.75 percent for the euro and 3.25 percent for the US dollar. The one-year USD/EUR
1. Suppose Coca-Cola stock trades at a forward price to earnings ratio of 28, its expected dividend payout ratio is 70 percent, and analysts believe that its dividend will grow at a constant rate of
Let’s assume that you have GBP100 to invest, and have two strategies from which to choose with the following cash flow streams as shown in Exhibit 9. Your required return for both investment
A stock currently trades at USD25. In one year, it will either increase in value to USD35 or decrease to USD15. An investor sells a call option on the stock, granting the buyer the right, but not the
The tenth percentile corresponds to observations in bin(s):A. 2.B. 1 and 2.C. 19 and 20.Consider the results of an analysis focusing on the market capitalizations of a sample of 100 firms: Bin 1 2 3
At its June 2022 meeting, the US Federal Reserve surprised markets by raising its target interest rate by a greater-than-expected 75 bps and suggested further increases in the future in response to
Central banks responded differently to the sharp rise in inflation during 2022. For example, while the Fed raised rates by 75 bps to 1.75 percent in mid-June, the Bank of England opted for a more
Using the daily returns on the EAA Equity Index over the past five years and ranking them from lowest to highest daily return, we show the return bins from 1 (the lowest 5 percent) to 20 (the highest
A put option grants the owner the right, but not the obligation to sell a stock at a predetermined exercise price X. If we assume X = CNY50, then the put option value in one period (p1) is equal to
The second quintile corresponds to observations in bin(s):A. 8.B. 5, 6, 7, and 8.C. 6, 7, 8, 9, and 10.Consider the results of an analysis focusing on the market capitalizations of a sample of 100

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2024 CFA Program Curriculum Level I Volume 1 1st Edition CFA Institute - Solutions

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