Chartered Financial Analyst (CFA)

CFA Institute

5 contributor - 1 Folowers




Short-term loan can be described as having maximum period


A company is evaluating a project with a positive NPV (Net Present Value) but significant upfront investment. The project also has the flexibility to be abandoned after year 2 if market conditions worsen. How can this flexibility be best incorporated into the capital budgeting decision?


Company A has a debt-to-equity ratio of 0.5, while Company B has a ratio of 2.0. Which company is likely to have a higher weighted average cost of capital (WACC)?


A company with strong future growth prospects unexpectedly announces a significant increase in its dividend payout. According to signaling theory, what might this decision signal to investors?


Company X is considering acquiring Company Y. Synergies from the M&A are expected to arise from combining their sales forces. However, significant integration costs are also anticipated. How should these factors be best considered when evaluating the M&A?


Which of the following capital budgeting techniques takes into account the time value of money?


What is the main advantage of using debt financing over equity financing?


Sources of funds can be increased by


An owner investment of land into the business would


Quick Asset includes which of the fallowing


Which of the following measures assesses the risk-adjusted performance of an investment portfolio?


In the context of Modern Portfolio Theory, the efficient frontier represents:


Which of the following is NOT considered a primary characteristic of an efficient market?


The Capital Asset Pricing Model (CAPM) suggests that the expected return of an asset is primarily influenced by


The efficient market hypothesis (EMH) suggests that


Which of the following represents the risk that can be eliminated through diversification?


Which of the following investment strategies involves holding a mix of assets in a fixed proportion?


Who is the father of economics?


The branch of economics that deals with the allocation of resources is called ______.


Which of the following factors does NOT influence the demand for a good?


If the demand for a product increases while its supply remains constant, what will happen to the equilibrium price and quantity?


Which of the following statements about elasticity of demand is true?


Which of the following events would lead to a decrease in the equilibrium price of oranges?


When is the price elasticity of supply perfectly inelastic?


If both supply and demand increase but the increase in supply is larger, what will happen to equilibrium price and quantity?


Which of the following is an example of a substitute good?


Which of the following would lead to a rightward shift of the supply curve?


If the price elasticity of demand for a good is less than 1, the demand is considered


Macroeconomics distinguishes between the real economy and the


Until the First World War, the prices


Which of the following is NOT included in the calculation of Gross Domestic Product (GDP)?


Which of the following measures is used to adjust Gross Domestic Product (GDP) for inflation?


Which of the following transactions would be included in the calculation of Gross Domestic Product (GDP)?


Which of the following is NOT a component of the expenditure approach to calculating Gross Domestic Product (GDP)?


Which of the following is an example of a transfer payment?


Which of the following is NOT a limitation of Gross Domestic Product (GDP) as a measure of economic welfare?


In the circular flow of income, which sector consists of households?


What is the main reason for a firm to engage in price discrimination?


When should a firm continue producing in the short run even if it is incurring losses?


Where is the optimal point of production for a firm operating under perfect competition in the long run?


How to determine the profit-maximizing output level for a monopolist?


Which factor can lead to economies of scale in production?