CFA Institute CFA Level I Chartered Financial Analyst CFA-Level-I Exam Questions

Under what conditions is Standard II (B)- Professional Misconduct violated?

I . The member is convicted of a misdemeanor.

II . The member regularly engages in unprofessional but legal behavior.

III . The member engages in dishonest activities that do not result in criminal conviction. IV . The member is convicted of a felony.

Omega Prime Securities is a sizable investment bank that undertakes security issuances on behalf of small and medium-size businesses. Treffil Ellis is the senior vice president of corporate finance at Omega. Treffil, on one of his golf junkets, made acquaintance with Tralth Trevor, owner of a growing chain of resort hotels. Tralth invites Treffil to his estate mansion the next day and over drinks, asks him how fast Omega could issue equity-linked callable notes to finance the $200 million construction of new hotel businesses in Cairo and BalI . He forthrightly tells him that Omega could receive as much as 150 basis points above the normal fee if the issuance could be completed within the month. Treffil knows that this is not enough time to complete a research on Tralth's business and determine the issue price. However, he does know that his research wing could quickly do a comparison with one of the other hotel chains and determine an approximate issue price. He instructs his department to do so. In a month, the public offering is ready for issuance and Omega ends up making almost $15 million more than on other similar business deals. Treffil receives commendation from the CEO for "going beyond the call of duty for his employer." Treffil has

I . violated Standard IV (B.3) - Fair Dealing.

II . not violated any code of ethics.

III . violated Standard IV (A.1) - Reasonable Basis & Representations.

IV . violated Standard IV (B.1) - Fiduciary Duties.

q 21,001106

q 31,042111

q 41,040107

What is the bond's yield to maturity (YTM)?

Andy Pilling is a bond trading specialist who recently started a special fund, the "Structured Bond Fund." The strategy behind this fund is quite complex, involving a mix of highly speculative, high-yield bonds and various tax-free municipal bonds for some stability. Andy has a strong view that the economy will remain vibrant and bullish over the next two years and hence, is not worried about the risky bonds. Assuming a falling rate scenario in this case allows the fund to project an expected return 130 basis points above the S&P 500 return. In his special report, Pilling does not disclose such assumptions nor does he reveal any details about the bond strategy. He does analyze the state of the economy and the future outlook in the report. Based on his reputation and his association with some big name academics, Pilling is able to obtain capital of close to 75 million dollars on this fund alone. Andy has:

What rate should be used to estimate the potential return on this bond?

The disclosures for retroactive compliance apply to composites formulated prior to ________.