CFA 2018 level 3 schweser practice exam CFA 2018 level 3 question bank 02 qst1

KDEÿEÿLMJÿDCÿDCGHIÿÿGÿDÿNBDÿFÿODED@Eÿ;QR LKÿDÿBHÿDÿGÿABBDHÿEÿÿNBDÿGÿSÿ@BI TKÿ?ADÿGÿ>>?@ÿÿ?Eÿ?CÿGÿ>?@ÿGBEÿEDADÿF>ÿGÿABBDHI ;ÿDDBCÿ?BHÿÿDÿDDBBCÿ@AHVEÿAGD@D?Bÿ@HDVDKÿSGAGÿ@W@ÿEÿF@ÿ>>?@GXIÿJ

KDEÿEÿLMJÿDCÿDCGHIÿÿGÿDÿNBDÿFÿODED@Eÿ;QR

LKÿDÿBHÿDÿGÿABBDHÿEÿÿNBDÿGÿSÿ@BI

TKÿ?ADÿGÿ>>?@ÿÿ?Eÿ?CÿGÿ<EÿFÿUGAI

TKÿDEÿGÿ>>?@ÿGBEÿEDADÿF>ÿGÿABBDHI

;ÿDDBCÿ?BHÿÿDÿDDBBCÿ@AHVEÿAGD@D?Bÿ@HDVDKÿSGAGÿ@W@ÿEÿF@ÿ>>?@GXIÿJGÿDDBCÿGDS@YEÿÿDÿEDBÿE@ÿSGAGÿGÿX@NEÿ>Cÿ>DDH>ÿDENAÿÿBÿFÿXDCHÿEIÿZGBÿX@F@>Hÿ@NAÿF@ÿG

@HDVDKÿGÿDDBCÿEAN@ÿ>ÿFBÿA>X@ÿX@H@D>ÿGDÿGÿX@EA@ÿENBXEÿDEÿBFDÿGÿX@X@CÿF

Gÿ@HDVDIÿJGÿDDBCÿEAEÿÿÿGÿA>X@ÿX@H@D>ÿÿGÿABHÿ?IÿJGÿDAÿ

DXX@X@DÿAÿGÿDDBCÿÿAGADBBCÿDÿ>XBCÿFÿGÿ@HDVDI

DÿNBDÿFÿODED@EÿQÿAA@Hÿ>AEAI

DÿNBDÿFÿODED@EÿP[QÿAA@HÿFD@EDBHI

\Dÿ[BDAYSBB<=;KÿS@YÿDÿDÿN>ÿ>DDH@ÿ@ÿ]HDÿ<DXDBKDÿBD@Hÿ>BDDBÿ?@Y@DHÿF>Iÿ]HDÿ<DXDBÿ

?DEÿÿDÿA@CÿSGÿDXXBAD?BÿBDSÿÿ@A@ÿGDÿGÿ<=;ÿÿ<EÿDEÿODED@EKÿ?ÿEÿ?ÿSGÿABÿ

DÿA@CÿSGÿDXXBAD?BÿBDSÿÿBÿ@AÿGDÿGÿ<EÿDEÿODED@EIÿ[BDAYSBBEAEÿÿFBBSÿGÿ@W@>ÿFÿG

<EÿDEÿODED@EÿF@ÿABÿÿGÿBÿ@AÿA@CKÿSGAGÿÿFFAÿÿDBÿA>XBCÿSGÿGDÿ^@AÿA@C_BADBÿDSIZGBÿ[BDAYSBBÿ>XBCEÿDÿ]HDKÿ`Hÿ;ADÿN@?DBBCÿDYÿ[BDAYSBBÿ@NSÿABÿX@BÿE@HÿNHÿDESYEÿF@ÿDÿFIÿ[BDAYSBBHÿS@ÿAÿ>ÿGÿ>>EDÿX@N@ÿDÿ]HDÿÿE@DYÿGÿEXEÿDAN

F@ÿDÿ^>GÿDBÿ?DI

ZGAGÿFÿGÿFBBSHÿD>ÿD?ÿ[BDAYSBBÿDAÿNBNHÿODED@Eÿa@FDB>KÿDEÿODED@EÿbP;QK`CDBCÿcdefÿDAA@DRÿ[BDAYSBB

NBDEÿ?GÿODED@EÿDEÿODED@EÿbP;QI

EEÿÿNDÿG@ÿODED@Eÿ@ÿODED@EÿbP;QI

NBDEÿODED@Eÿ?ÿEEÿÿNBDÿODED@EÿbP;QI

.ÿ91,ÿÿ'ÿ,.,?ÿ*22.-9ÿÿ'ÿ()*ÿÿ+,-,.-ÿ/ÿ0./,1ÿ(-23B6ÿ6,;

*-)17

I)*,*ÿ*++ÿ*ÿ-10S,ÿ:)*ÿ:ÿÿ9.ÿW-9)ÿX-+ÿHWXJÿ)ÿ:)*6ÿ5ÿ2Qÿ*+ÿ0)ÿ),7ÿ)4

0ÿ,43ÿI)*,*ÿ*4)ÿÿ*11:ÿ*ÿ:ÿÿ8)*-*ÿÿ6WXYÿ:)*ÿ*ÿ/ *ÿ:+ÿ6)*-ÿ+*.ÿ)4ÿ8)*-

*ÿWXYÿZ:7ÿI)*,*ÿ0*+ÿ*ÿ5/ÿ+);ÿ*ÿ0ÿ-10S,ÿ:)*7ÿKÿ0ÿ/*.ÿ9*1;ÿÿ0ÿ5513ÿ0ÿ/*ÿ*))+ÿ5)+)64ÿ/0-ÿZ1*+ÿH[J*+ÿ0ÿÿ0)ÿ1+ÿ557

* .3ÿI)*,*ÿ-.ÿ0*+ÿ0ÿ**ÿ.:ÿ:ÿ)ÿ5),3ÿ556-:3ÿ1)ÿ1* 3ÿ*+ÿ10+-ÿ,47ÿ<0ÿ**++ÿ04ÿ)-*+ÿÿ**-.ÿ)ÿ+1ÿ,*;47ÿI)*,*ÿ0*ÿ9ÿ:-*+ÿ/0ÿ0ÿ/);ÿ5ÿ0ÿ**ÿ*+ÿ5ÿ

*1*ÿ0*ÿ0ÿ^0*ÿ*ÿ-6-ÿÿMV8ÿ*ÿ*ÿ**7^ÿ_1-.3ÿI)*,*ÿ0*ÿ* /+ÿ0ÿ**ÿÿ/)ÿ:)ÿ5:)-,*).ÿ):)3ÿ/010ÿI)*,*ÿ)6/ÿ95)ÿ1):)*4ÿ0,ÿÿ0ÿ5*-ÿ:)7ÿ

5,101ÿÿÿ71ÿ/ÿ+ÿE:ÿ1:ÿ91:1,:4ÿ;ÿ+ÿ11ÿÿ<

;+ÿ+ÿ11ÿ1:ÿ5,101ÿ1,ÿÿ781ÿ/ÿ+ÿE:ÿ1:ÿ91:1,:<

34.ÿ7ÿ()ÿ(ÿA(44.48ÿA(44ÿ(ÿ6(94ÿ.4(,ÿ46ÿÿK(5((ÿ(.ÿ(ÿ),ÿ(ÿJ,(74.Gÿ768ÿJ(.ÿÿ/((,*-ÿJ,(74.ÿ3)ÿ/(ÿA/(6(*ÿ/(<ÿ.,:4(,*ÿ<4(.ÿA(44ÿ)44ÿ(45ÿ(.ÿÿ(45ÿ74ÿ/ÿ3(

<4(,ÿI(448ÿÿ/ÿ746(ÿ:)6ÿ3:,)-ÿJ,(74.ÿ:,<ÿ/(ÿA(44ÿ);ÿ34)ÿ=,.43ÿ:((,,*8ÿJ,(74

3)ÿ/(ÿA/(6(*ÿ/(<ÿ<,(.ÿK(5((Gÿ)4ÿ,(=8ÿM/)/ÿ7ÿ/ÿ7,,=5ÿ(6ÿÿNDOEFÿRDNSÿÿ)63,*ÿ=A(.(4.ÿB47(,6HÿJ,(74.ÿ/,.

(;ÿÿ()8

.46ÿ/ÿ,5(,*ÿ7ÿ/ÿ()<*-ÿ3:,*ÿ:*ÿ),5ÿ),8

.()(ÿ/6,746ÿ/ÿ),-7/ÿ()<*ÿÿ5(,ÿ4ÿ/)(,8

2ÿ5<46ÿ)66ÿ/(ÿ)),..ÿ/(ÿ<6ÿ)63(*ÿ7ÿ/,.ÿ:ÿ.),.ÿÿ),ÿ()/ÿI(44ÿ(.ÿ/(ÿ343.ÿ=,5,(ÿÿ4I4ÿ/8ÿ044,*-ÿ/ÿ,5(,ÿI46ÿÿÿ434)/ÿ.((ÿ((,,*8ÿÿ)63,()ÿ=/ÿ)44ÿ5(,ÿI46-

-5462ÿ,7,-834ÿ1323ÿ/2,367,7-2ÿ4,/2ÿ,75ÿ.2/523ÿ46,4ÿ62ÿ424675P12ÿB/6.5523ÿ31B2/56/

/231-43@

,>I3?ÿÿ1ÿ++,ÿ;;,F.ÿ35ÿÿ3ÿ,15ÿ1ÿ*ÿ015ÿ5,2,,ÿ,ÿ1ÿ;/->ÿ35ÿÿ3?ÿB*18,;:K1L0ÿH;015ÿ*1ÿ*ÿ040ÿ+ÿ9ÿ*1ÿDÿ*1ÿ1>5ÿÿB*18,;ÿÿÿ*>*ÿ15ÿ*1ÿ2*ÿ1ÿ0>*ÿ5221,5

K8ÿL,;ÿ/ÿ012ÿÿ88A*;5ÿÿ0*>ÿJ;ÿAÿ5ÿAÿÿ0*>ÿ:;ÿ<,6,ÿ,/ÿ6*ÿ./<ÿ/5

P7ÿE,3ÿ9ÿCCE-ÿ..ÿÿC33ÿI86./ÿ3.ÿI8ÿ4ÿ9ÿ-6K

X7ÿE,3ÿ9ÿCCE-ÿI8/6HÿE-Iÿ9ÿ-6K

X7ÿE,3ÿ9ÿCCE-ÿC..ÿ9ÿ3K

Y3ÿ56301+7ÿD-3ÿ3ÿGCÿ3.G-Hÿ-G,ÿÿX8ÿP-IÿEÿC33ÿ3ÿ44,ÿÿZ33KÿZ33ÿ-,6

3E69.ÿ3ÿ,IÿC3-I789,9ÿÿÿG-Hÿ44,KXÿ4ÿ9ÿZ33ÿ,Iÿ3.ÿÿ9ÿ[K2KÿC3-IKZ33ÿ6/366HÿD-C

,ÿ-.,ÿÿ%%/'ÿ0'1ÿ*'ÿ23'ÿ23'4ÿ3+4&)ÿ5(&6ÿ'7/6ÿÿ8ÿ*%9ÿ'7/6ÿ&%+ÿ23'ÿ23'9ÿ&%'3(6ÿ5(&6)ÿ8ÿ&%ÿ*ÿ&ÿ':&(ÿ'%+ÿ'7ÿ8ÿ7&%4ÿ&ÿ*78ÿ/'1ÿÿ&)ÿ8ÿ-.,ÿÿ%%/'ÿ0&ÿ8ÿ7&'4/

ÿÿ0&ÿ'(6ÿ8'ÿ8ÿ&ÿ:(&ÿ*ÿ,<ÿ33'7ÿ%&&7ÿ10()7ÿ&)ÿ3%5(67ÿ08ÿ(&04ÿ(4ÿ&)'7(&=

>4ÿ/3&ÿ8ÿ%%/'ÿ3()ÿ8&:ÿ8'%ÿÿ8ÿ*78+

?4ÿ/3&ÿ&ÿ*78ÿ&ÿ&ÿ'7/6ÿ7&%ÿÿÿ&ÿ5'*&(ÿ&3:6+

>4ÿ/3&ÿ8ÿ%%/'ÿÿ/)ÿ/6ÿ8ÿ-)ÿ*ÿ@83+

,ÿ%6ÿ%&&7'ÿ0'1ÿ*'ÿ&ÿ*((':3ÿ/'1'&7ÿ*%+ÿ,*'ÿ%7ÿ08ÿ&ÿ0ÿ3(ÿ&)ÿ7&8'7ÿ&(((:&ÿ*'%&4

8ÿ%6ÿ%&&7'ÿ&6ÿ8&ÿ8ÿ81ÿ8'ÿ'%ÿ3&ÿ5'*'%ÿ&((8ÿ*&3&(ÿ':3ÿ8ÿ0ÿ3(ÿ)+ÿB8ÿ'53ÿ2&)&')ÿ-<4C'5'&4ÿ8

%&6ÿÿ/ÿ&ÿ:&ÿ8ÿ'5'&ÿ0&ÿ%&)ÿ'&((6+

ÿ&ÿ:(&ÿ/3&ÿ8ÿ3&ÿ%&1ÿ&%ÿ(1ÿ8ÿ)'ÿ&6ÿ3'3%&3+

%&6ÿÿ/ÿ&ÿ:&ÿ8ÿ%&&7'9ÿ5ÿÿ/&)ÿ5ÿ8ÿ*&3&(ÿ*'%&

7&8')+

2&ÿ?(4ÿ-.,4ÿÿ&ÿD6ÿ'&'38ÿ&&(6ÿÿ&ÿ*&3A)7ÿ5'5'6ÿ'ÿ08ÿ#ÿ8'ÿ&&(6ÿÿ(&'ÿ&/ÿEÿF4

3+ÿEÿFÿ((ÿ7ÿ/&((/&'7ÿ&)ÿ8&ÿ#ÿ0&'84ÿ&)ÿGÿ%&*&3'74ÿ&'384ÿ&)ÿ08(&(ÿ&(

(ÿ3&')ÿ:'ÿHÿ3'ÿIÿ%(6ÿ%'77ÿ%&'1+ÿJ3&ÿ*ÿ8ÿ'%ÿ(3&ÿ*ÿ%ÿ*ÿ8ÿ*&3(4

3%%'3&(ÿ&:(ÿÿ**3:(6ÿ&:&(&/(+ÿEÿFÿ38&''ÿ&ÿKÿ&)ÿ:&'ÿ/ÿÿ&1ÿ8ÿ'&'38ÿ&&(6ÿÿ85'5'+ÿÿ?(ÿ&335ÿ8ÿ&33%%)&4ÿ8ÿÿLMNOÿSTQU

ÿÿ:(&ÿ*ÿ2&)&')ÿJ<ÿV)5)3ÿ&)ÿW/K3:6Vÿ/3&ÿ/ÿ5'&33

)3&ÿ8&ÿ/'ÿ&33ÿÿ3%5&6ÿX3:ÿÿ(1(6ÿÿ(&)ÿÿ%'ÿ&33'&ÿ&)

%(6ÿ*'%&+

ÿ:(&ÿ*ÿ2&)&')ÿJ<ÿV)5)3ÿ&)ÿW/K3:6+V

ÿÿ:(&ÿ*ÿ2&)&')ÿJ<ÿV)5)3ÿ&)ÿW/K3:6Vÿ/3&ÿ3%%'3&(

&:(ÿÿ**3:(6ÿ&:&(&/(+

.:ÿ=2ÿ.,ÿ9.1ÿÿ-ÿ5/2.ÿ07ÿ5/ÿ-ÿ,0ÿÿ*/7ÿKÿ9ÿ

5/ÿ-ÿ,0ÿÿ*/7ÿGÿ/ÿ-205

ÿ.:ÿ=2ÿ.,ÿÿ-ÿ9.ÿ5ÿ-ÿ5/2.8

35+//ÿA5F7ÿ2347ÿ2A47ÿÿ+ÿ15'ÿ%++05ÿ5ÿ+ÿ8%ÿ+.85Cÿ&%6ÿÿÿ)ÿ15%/ÿ&ÿ)ÿ17ÿ)ÿ

&ÿ8.ÿÿ+.ÿ&ÿ%+5E0ÿ+.ÿ./++'ÿ8ÿ).ÿ>Cÿ&%ÿ()/)ÿEÿÿ&5%ÿ)ÿ8%ÿ/%%+>ÿ)58%ÿ15/6ÿBÿ/)ÿ&%7ÿH'%.ÿO5F7ÿ)+ÿ8.ÿA5Fÿÿ+.ÿ&ÿ./++'ÿ8ÿ()/)J+'Cÿ&5ÿ20ÿP./+ÿ/5.ÿ()/)ÿ/'.ÿ)'1ÿA5Fÿ%++ÿ)ÿ2A4ÿ.0+6ÿA5Fÿ)'.ÿQRSTÿXYVZ

ÿG .Eÿ,ÿA-A1ÿÿ0ÿKLHÿ*ÿ8@8ÿÿ0ÿO@8+6ÿ@8A8D)*-ÿ8A./ÿ@0ÿ0+0-ÿ01

@8A66ÿ2BÿN.3HÿG .ÿ@+ÿ*0ÿN.3ÿ6-280-BÿA806ÿÿ08/ÿ,8ÿ*ÿ@0ÿA80-ÿ?088DÿG .ÿI

*ÿ06A+ÿ,ÿ*ÿ,1Eÿ*/*-Bÿ+1@ÿ/80-ÿ+-ÿ06ÿ, .ÿ*ÿ06A+ÿ/Aÿ.*ÿ6A0DÿG06ÿÿ*ÿ/8+-Eÿ06A+HÿG .ÿ+-ÿ*ÿ1160ÿ@8A8ÿ02ÿ*ÿ@+6ÿA801ÿ,ÿ08/Dÿ5,8ÿA./ÿ*

0-0HÿG .Eÿ@8A8ÿO@-0ÿ.*BÿN.3Eÿ+0-+-0ÿ,ÿÿ08/ÿ08ÿ+88+DG .ÿ80-Cÿ*0ÿ*ÿO@8+06ÿO280+ÿ0 Bÿ-6ÿ*1ÿÿ0ÿ+88+ÿ++-ÿ02ÿN.3Eÿ08/D

)*+*ÿ,ÿ*ÿ, ./ÿ01ÿ02ÿG .Eÿ0+ÿA-A/ÿ706086ÿ5MHP.-6/ÿ,ÿ*ÿ-0.Hÿ06ÿ706086ÿ3MHF8@80Hÿÿ3LQQR3>=ÿG .