Cổng thông tin chứng khoán Việt Nam – http://www.vse.vn 2 D Standard IIIB, Duty to Employer, applies in this situation.. The standard addresses the overall obligation to comply with the
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Correct Answers
1) A 2) D 3) A 4) A 5) B 6) C 7) A 8) D 9) A 10) A11) B 12) C 13) B 14) A 15) D 16) D 17) C 18) A 19) C 20) D21) A 22) B 23) C 24) A 25) A 26) B 27) B 28) A 29) C 30) C31) D 32) C 33) B 34) B 35) A 36) C 37) D 38) A 39) B 40) D41) A 42) B 43) B 44) A 45) D 46) B 47) D 48) D 49) C 50) D51) C 52) B 53) B 54) B 55) C 56) A 57) A 58) C 59) D 60) A61) C 62) D 63) A 64) C 65) D 66) C 67) A 68) D 69) D 70) C71) B 72) B 73) B 74) C 75) B 76) D 77) D 78) A 79) A 80) B81) B 82) D 83) D 84) B 85) D 86) B 87) A 88) B 89) C 90) A91) D 92) A 93) B 94) D 95) A 96) C 97) D 98) C 99) D 100) B101) D 102) C 103) A 104) B 105) C 106) A 107) D 108) D 109) D 110) B111) A 112) B 113) A 114) C 115) C 116) D 117) D 118) C 119) C 120) A
Answers
Standard V(A), Prohibition against Use of Material Nonpublic Information, applies in this
situation Standard V(A) suggest the use of "fire walls" to protect the firm and conform to the Standards A fire wall is an information barrier designed to prevent the communication of material nonpublic information between departments of a firm In this situation, MLB&J should remove any controversial companies from the research universe and put them on a restricted list so that the firm disseminates only factual information about the company A restricted list is one example of a "fire wall."
The statement, "carefully monitor the flow of information between the Investment Banking
Department and the brokerage operation" should read " restrict the flow of information."
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2) D
Standard III(B), Duty to Employer, applies in this situation The Standards of Practice
Handbook lists all three choices above as items a member should mention in the permission
request to the consulting client
3) A
Standard II(B), Professional Conduct, applies in this situation Generally, complying with
Standard II(B) is a matter of the member's own personal integrity and moral character The standard addresses the overall obligation to comply with the laws and rules governing your
professional activities Standard II(B) extends beyond technical compliance Standard II(B)
addresses your personal integrity and prohibits individual behavior that reflects adversely
on the entire profession
The text of Standard II(B) states, " (1) Members shall not engage in any professional conduct
involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects
adversely on their honesty, trustworthiness, or professional competence (2) Members and candidates shall not engage in any conduct or commit any act that compromises the integrity
of the CFA designation or the integrity or validity of the examinations leading to the award of the right to use the CFA designation."
4) A
Standard I (B), Fundamental Responsibilities, applies in this situation According to this
standard, members shall not knowingly participate or assist in any violation of laws, rules, or regulations governing CFAs
When members suspect a client or a colleague of planning or engaging in ongoing illegal
activities , members should take the following actions:
• Consult counsel to determine if the conduct is, in fact, illegal
• Disassociate from any illegal or unethical activity When members have reasonable
grounds to believe that a client’s or employee’s activities are illegal or unethical, the members should dissociate from these activities and urge their firm to attempt to persuade the perpetrator to cease such activity
Note: The Code and Standards do not require that members report legal violations to the appropriate governmental or regulatory organizations, but such disclosure may be prudent in certain circumstances
5) B
Standard IV(B.4), Priority of Transactions, applies If an analyst decides to make a
recommendation about the purchase or sale of a security, he shall give his customers or
employer adequate opportunity to act on this recommendation before acting on his own
behalf Personal transactions include those made for the member's own account and family
accounts Here, McKinney violated Standard IV(B.4) by acting on his mother-in-law's behalf and then waiting until the end of the day to act on his employer's behalf
Trang 3Explanations for other responses:
- Standard III(B), Duty to Employer, does not apply This standard concerns a member
competing with his/her employer (independent practice) For example, a member who
engages in outside consulting
- Standard IV(A.3), Independence and Objectivity, does not apply This standard covers
concepts such as gifts, perks, and corporate relationships
- Standard V(A), Prohibition against Use of Material NonPublic Information, does not apply -
the question does not indicated that the information is not public
6) C
Solicitation of the employer’s clients prior to termination of employment would constitute a violation of Duty to Employer, but solicitation of clients following termination would not
7) A
If Jacob gets written permission from his employer to solicit their clients (not likely, obviously)
he would not be violating the Duty to Employer standard
8) D
She should provide information about the type of services, the compensation arrangement and the expected duration of the project
9) A
Money does not have to change hands for a violation to occur Chip should have gotten
written permission from both his employer and the firm hiring him for the consulting work to avoid a violation of Standard III(B)
There is no reason to reject any outside compensation immediately because it is
inappropriate to accept it However, all outside arrangements must be reported to the
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performance is allowable if the manager gets approval from her employer to accept the
Fiduciaries are not required by securities laws to make up losses when they occur as a result
of inappropriate investments The other statements are true
The normal curve is symmetrical with a mean of zero and a standard deviation of 1 with 34%
of the area under the normal curve falling between 0 and + 1 standard deviation from the
Trang 5standard deviation = square root of 0.001225 = 035 or 3.5%
You should note that variance is not in percent, just the standard deviation is
28) A
P(A1)(P(B|A1))P(A1|B) =
P(A1)(P(B|A1) + P(A2)(P(B|A2))(.6)(.5) / (.6)(.5) + (.4)(.8) = 48
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31) D
Z=(X-µ / σ/√n)
32) C
These are three of the four basic assumptions underlying linear regression The fourth
assumption is Normality: For each independent observation (X), there is a distribution of
dependent observations (Y) that is normally distributed Know all these assumptions for
Explanations for other choices:
• The standard error of the residuals is the standard deviation of the dispersion about the regression line
• The t-statistic measures the statistical significance of the coefficients of the regression equation
• " percent of variability of the independent variable that is explained by the variable of
the dependent variable," reverses the definitions of the variables
37) D
Supply-side economists are modern economists who believe that changes in marginal tax rates exert important effects on aggregate supply Changes in tax rates, particularly marginal tax rates, will affect aggregate supply through their impact on the relative attractiveness of productive activity in comparison to leisure and tax avoidance For example, marginal tax
rates determine the breakdown of one's additional income between tax payments and
personal income A reduction in marginal tax rates increases the reward from added work, investment, saving, and other activities that become less heavily taxed People shift into
Trang 7these activities away from leisure, tax shelters, consumption of tax-deductible goods, and other forms of tax avoidance Supply-side economists believe that these substitutions both enlarge the effective resource base and improve the efficiency with which the resources are applied
Supply-side economics is a long-run growth-oriented strategy The full positive effects of
lower marginal tax rates will not be observed until labor and capital markets have time to
adjust fully to the new incentive structure
38) A
Buying bonds increases bank reserves that are then loaned out, increasing the money supply
39) B
The adaptive-expectations hypothesis is the simplest theory of expectations Decision makers
believe that the best indicator of the future is what has happened in the past Simply, you
learn from your past.
Under adaptive-expectations, decision-makers will underestimate the future inflation rate
when the rate is rising As the result of this systematic pattern, a shift to a more expansionary
policy will temporarily reduce the unemployment rate Underestimated inflation reduces the real-wage rate of workers whose money wages are determined by long-term contracts and reduces the search time of job seekers (the latter group may quickly accept offers that appear
better than the general market) As inflation persists over time, decision-makers will
eventually anticipate it, and unemployment will return to its natural rate There is no long-run (permanent) trade-off between inflation and unemployment under this hypothesis
40) D
NI of Foreigners 10 + Prop Inc 316 + Employee Compensation 2000 + Indirect Business Tax
300 + Rents 67 + Deprec 300 + Interest Income 119 + Corp Profits 280 = $3,392
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monetary policy The other answers also describe emerging consensus views concerning policy changes
45) D
These two choices form the basic definition of monopolistic competition
A more wordy explanation is as follows: monopolistic competition is the term often used by
economists to describe markets characterized by a large number of sellers that supply
differentiated products to a market with low barriers to entry Essentially, it is an alternative term for competitive price-searcher markets
brand will likely decrease as consumers substitute cheaper brands The most important
determinant of the price elasticity of demand is the availability of substitutes
The other statements are true The second law of demand suggests that in general, when the
price of a product increases, consumers take time to reduce their consumption Thus,
demand decreases by a larger amount in the long run than in the short run The demand for gasoline is likely inelastic Thus, when price increases, the percentage change in quantity demanded is less than the change in price (and total expenditures on the good increase) The demand for an individual firm is more elastic than the demand for the entire market
47) D
Comparative advantage is the ability to produce a good at a lower opportunity cost than
others can produce it According to the law of comparative advantage, trading partners are
both better off if they specialize in the production of goods for which they are the
low-opportunity cost producer and trade for those goods for which they are the high-low-opportunity
cost producer Relative cost determines comparative advantage When trading partners
specialize in producing products for which they have comparative advantage, costs are
minimized, output is greater, and both trading partners benefit
48) D
The approximate equation is rD-rF < [(f-s)/s] The exact equation is f/s = (1+rD)/(1+rF) When rD-rF < [(f-s)/s] borrow local currency, convert it to foreign currency and lend out the foreign currency American terms are $/FC, European terms are FC/$ Direct quotes are domestic / foreign, indirect quotes are F/D Transaction costs hamper arbitrage
49) C
An unanticipated shift to contractionary monetary policy would lead to currency appreciation
The contractionary policy leads to lower economic growth, a lower inflation rate, and higher
Trang 9real interest rates Domestic products are less expensive, foreign investment is encouraged, and exports increase
The other statements would result in currency depreciation by increasing the demand for
foreign goods and the currency needed to purchase them Removing a high tariff on a major imported good would increase the demand for imports and thus for foreign currency A current account deficit means that a country imports more than it exports As a result, there is
increased demand for foreign currency If the inflation rate in the U.S is increasing faster than that in the Euro zone, U.S citizens will demand Euro goods because they are now cheaper
Step 2: "Divide Out" the diagonals
(Remember to put CSK in the numerator - because CSK is in the numerator of the quote we are asked to calculate.)
CSKBid / PLZ Ask = 36.60000 CSK/$ / 4.23000 PLZ/$ = 8.65248 CSK/PLZ
CSKAsk / PLZ Bid = 36.60500 CSK/$ / 4.18000 PLZ/$ = 8.75718 CSK/PLZ
Step 3: Quote : The CSK/PLZ Bid-Ask spread in is:
(Note: The lower number from Step 2 is the bid, the higher number is the ask.)
CSK 8.65248 to 8.75718 PLZ, or CSK 8.65248 - 0.10470 PLZ
51) C
This choice is FALSE because of the second sentence The first part of this explanation is correct - The completed contract method does not recognize revenue and expense until the
contract is completed However, all profits are recognized when the contract is completed,
not on a pro-rata basis The completed contract method is used when selling price or cost
estimates are unreliable
The other choices are correct definitions
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52) B
The key word here is "or." Unusual or infrequent items are unusual or infrequent, but NOT
both These items are reported (as a separate line item) as a component of net income from
continuing operations.
Examples of unusual or infrequent items include:
• Gains or losses from the disposal of a business segment (employee separation costs, plant shutdown costs, etc.);
• Gains or losses from the sale of investments in subsidiaries;
• Provisions for environmental remediation; and
• Impairments, write-offs, write-downs, and restructuring costs
53) B
At issuance, non-interest bearing debt (i.e., a zero-coupon bond) should be initially recorded
at its discounted present value, using a discount rate equal to the company's normal
borrowing rate The full amount of this discounted present value increases cash flow from
financing.
A zero-coupon bond has no deduction from cash flow from operations even though it has
interest expense All of its cash flows are included in financing activities
54) B
The indirect method starts with net income and adds back non-cash expenses or losses and subtracts non-cash revenues or gains Interest and taxes are cash expenses (if they are
current) and are not added back Non-cash expenses for depreciation ($5,000,000) and
inventory write-down ($4,000,000) are added back to net income to arrive at net cash
provided by operations ($7,000,000 + $5,000,000 + $4,000,000 = $16,000,000)
55) C
Under the percentage-of-completion method, revenues are recognized as costs are incurred
As of December 31, 2001, ($7.5 / $15 =) 50 percent of costs have been incurred Revenues
of ($20 million * 0.5=) $10 million should be recognized in 2001 Billings of $9 million have been made, so the difference between revenue recognized and billings made of ($10 - $9 =)
$1 million is reported in an asset account as net construction-in-progress
56) A
Dividend revenue is considered cash from operations (CFO) Debt proceeds and payments, other than interest paid or received, are considered to be cash flows from financing (CFF)
57) A
Issuing bonds in exchange for equipment does not affect cash flow Interest paid is an
operating cash flow Exchanging bonds for stock does not affect cash, but should still be
disclosed in a footnote to the Statement of Cash Flows Dividends paid are considered