Wednesday, February 25, 2015

27 All-Important Free CFA Level 1 Mock Exam Questions and Answers on Economics

Keep practising all the multiple choice questions in 27 All-Important Free CFA Level 1 Mock Exam Questions and Answers on Economics to get benefit over other candidates in the next CFA exam. Actually, this free up-to-date CFA practice exam with instant answers is regarded as one of the most efficient way to enhance your fundamental knowledge. Key economics concepts in the CFA curriculum are highlighted and given detailed explanation under many exercises and examples. Besides, your skills will be improved and boost up day by day to be ready for CFA exams without taking any costly courses outside or wasting time. It’s probably the best method for any candidates who are preparing for a successful CFA exam at first time. Don’t be afraid and try it out to realize that CFA certification is something you can gain with your non-stop attempt.
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EAY = ( ( 1 + HPY) ^ (365/t) ) -1
Discount rate that makes NPV zero
Internal rate of return
HPY = ((P1 - P0 ) + D ) / P0
Geometric mean of the holding periods.
Measures the return over a period.
Management of company's short term assets like inventory and short term liabilities (money owed to suppliers).
1. Capital budgeting.2. Capital structure.3. Working capital management.
T-Bills, Commercial Paper, Negotiable CDs.
r = (HPY) ^ ( 360/t)
D= r F ( t/360)
Assumes a 360 day holding period
Calculate return on a consistent and logical manner .
1. Identity all cash inflows and cash outflows.2. Calculate the present value by applying the discount rate.3. Sum all present values.4. That is NPV.
Financing long term projects.
Short term market ( < 1 year)
Present value of all its cash inflows - Present value of all its cash outflows.
Allocation of funds for long term projects
r = (D/F) * (360/t)
HPR = (P1 - P0 + D1 ) / P0
Sum ( CF/(1+r)^t)
Invest only if IRR is greater than opportunity cost.
Initially, the lender/investor pays the face value - Discount and at the end, the lender/investor receives the face value.
PV (Cash Inflows) = PV(Cash Outflows) and the equivalent IRR that computes the rate of return
(1 + r) ^ 4 -> Where four is the number of quarters.r -> Quarterly return.
Same as IRR. Gives higher precedence to amount of money invested vs return.
Yield to maturity

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