CFA-Level-II-2013-Sample

Version1KingfisherCaseScenario1WhichofKingfisher’sstatementsintheREPregardingitsqualificationsmostlikelyviolatestheCFAInstituteCodeofEthicsandStandardofProfessionalConduct?AJustification1BJustification2CJustification32RegardingtheproposedpolicystatementrelatingtoLevelsofProfessionalism,whichrequirementleastlikelyreflectsanyoftheCFAInstituteCodeofEthicsandStandardsofProfessionalConduct?AConflictsofInterestBDifferentiationofservicesCCompensationarrangements3DoanyofKingfisher’sproposedpolicystatementsrelatedtoCapitalMarketIntegritymostlikelyviolateanyCFAInstituteCodeofEthicsandStandardsofProfessionalConduct?ANoBYes,regardingmarketmanipulationCYes,regardingmaterialsnonpublicinformation4WhichofKingfisher’sproposedrequirementstoensureDutiestoClientsisleastappropriatetopreventviolationsofCFAInstituteCodeofEthicsandStandardsofProfessionalConduct?Therequirementcallingfora(n):AperiodicreviewBinvestmentplanCwell-diversifiedportfolio5WhichofKingfisher’sproposedrequirementsregardinginvestmentrecommendationsismostappropriatetopreventviolationsofCFAInstituteStandardV(A)DiligenceandReasonableBasis?ARequirement1BRequirement2CRequirement36Whichofthefollowinggovernmentcommittee-suggestedtaskswouldleastlikelyconformtoCFAInstituteStandardIV(C)ResponsibilitiesofSupervisors?ATask1BTask2CTask3JorgeReyesCaseScenario7IntheregressionofthereturnsofBOLSAA.MXontheUSD:MXNexchangerate(Exhibit1),thecoefficientoftheUSD:MXNexchangerateismostaccuratelydescribedas:AsignificantlydifferentzeroBnotsignificantlydifferentzeroCindeterminate,asinsufficientinformationisprovidedinExhibit18Reyes’explanationregardingAdjustedR^2isbestcharacterizedas:AcorrectBincorrectbecauseAdjustedR^2isameansofcompensatingforheteroskedasticityintheindependentvariablesCincorrectbecauseAdjustedR^2reflectsthelossofdegreesoffreedomwhenadditionalindependentvariablesareaddedtoaregression.9Reyes’interpretationofthegraphinExhibit2isbestdescribedas:AcorrectBincorrectbecausetheeffectsofheteroskedasticityare,inaregressionsuchasthisone,hiddenbythenegativeslopeoftheregressionlineCincorrectbecauseheteroskedasticityisindicatedwhenthereisnotasystematicrelationshipbetweentheresidualsandtheindependentvariable10TheDurbin-WastontestreportedinExhibit3ismostaccuratelyinterpretedasindicatingthatthecorrelationintheerrorsis:AinsignificantBsignificantlypositiveCsignificantlynegative11BasedontheregressionresultsreportedinExhibit4,themean-revertinglevelofthedifferencesoflogarithmsoftheMaya22prices(i.e,thetimeseriesasmodeledintheAR(1)model)isclosetto:A0.00239B0.00311C0.3081212BasedontheresultsreportedinExhibit5,theAR(1)modelisbestdescribedashaving:AaunitrootBreliablestandarderrorsCheteroskedasticityintheerrortermvarianceHannahTreadwayCaseScenario13Thecashcollectedfromcustomer(in000s)in2011isclosetto:A$693,250B$700,250C$709,00014Thecashreceived(in000s)fromCCCL’sinvestmentsinassociatesin2011isclosetto:A$400B$800C$120015ThechangeinwhichofthefollowingismostlikelyanindicationthatCCCLmightberecognizedrevenueearly?AUnearnedrevenueBDeferredtaxassetsCDaysalesinreceivables16Thenewaccountingpolicyadoptedin2011forthecustomeracquisitioncost(Note1d)mostlikelyincreasesCCCL’s:Adebt-to-assetratioBqualityofearningsCcashfromoperations17Aftertakingintoaccountthereversaloftheimpairmentlosspertainingtothebroadcastlicenses(Note12),Treadwaywillmostlikelyconcludethatheroriginal2010analysis:AunderstatedROABoverstatednetprofitmarginCunderstatedfixedassetturnover18Theamountofcustomeracquisitioncosts(in000s)capitalizedduring2011isclosestto:A$6,000B$8,000C$18,500ValentineCaseScenario19WhichofValentine’sconclusionsregardingvaluationapproachesandsecurityselectionisleastaccurate?AConclusion1BConclusion2CConclution320IndeterminingLaboutin’sofferingpriceforFrontierEnegryCo.,whichofthefollowingadjustmentswouldbemostappropriate?AControlBLiquidityCMarketability21BasedonValentine’sP/Eanalysis,Laboutin’sstockcanbemostappropriatelycharacterizedas:AovervaluedBundervaluedCfairlyvalued22BasedonValentine’spredictedP/Eregressionanalysis,Laboutin’sstockcanbemostappropriatelycharacterizedas:AovervaluedBundervaluedCfarilyvalued23UsingthedatainExhibits1and2andNorman’ssuggestion(1)toValentine,Laboutin’sinstrinsicvaluepershareisclosestto”A$171.37B$199.63C$208.4724WhichofValentine’snotesfromhisreviewofLaboutin’sfinancialstatementmostlikelyservesasawarningsignofpossibleproblemswiththecompany’squalityofearnings?ANote1BNote2CNote3LyonsManagersLLCCaseScenario25GivenBounchard’sgoalsforprivateequityinvestment,whichexitroutwouldbethefundsheinvestsinmostlikelyuse?ASecondarymarketBManagementbuyoutCInitialpublicoffering26WhichofHosep’sstatementsregardingthestructureofprivateequityfundsisleastlikelycorrect?AStatement1Bstatement2Cstatement327BasedoninformationinExhibit1,thecarriedinterestforthefive-yearperiodisclosestto:A$5,140,000B$7,100,000C$10,140,00028WhichofthethreecharacteristicsofventurecapitalinvestmentsidentifiedbyHosepisleastlikelycorrect?ACharacteristic1BCharacteristic2CCharacteristic329BasedontheinformationprovidedinExhibit2,thepricepershareoftheventu