Title FSA - Question.pdf ✅

CFA Program Level I for February 2024 1 Financial Statement Analysis 1. Which of the following companies would most likely be considered to have the lowest financial reporting quality other things equal? A. A company that provides high quality, decision useful information under GAAP but delays its reports. B. A company that reports significant profits due to a favorable exchange rate movement C. A company that reports the results from two different segments as a combined entity. 2. Which of the following is lowest quality on the spectrum of GAAP conforming financial reports? A. Aggressive accounting choices B. Earnings management C. Conservative accounting choices 3. Analyst would mostly conduct additional analysis i en laced will which of the following Trancel presentations? A. A non-GAAP financial measure that excludes an expense that is likely to recur B. Reporting a non-GAAP financial measure in an SEC filing C. A change from LIFO inventory accounting to FIFO 4. Under International Financial Reporting Standards (IFRS) reported operating cash flows are most likely to be increased by the classification choice made for A. impairment losses on fixed assets B. dividends paid C. Interest expense
CFA Program Level I for February 2024 2 5. In the Porter's five forces framework a company is most likely to have the greatest profitability if A. the threat of substitutes is low and the bargaining power of buyers is low B. the threat of substitutes is low and the bargaining power of buyers is high. C. The threat of substitutes is high and the bargaining power of buyers is low. 6. Which of the following conditions conducive to issuing low-quality financial reports is most likely a result of poor internal controls A. Rationalization B. Opportunity C. Motivation 7. Maintaining prior views or forecasts by inadequately incorporating new information best describes A. conservatism bias B. overconfidence blas C. representativeness bas 8. For a company in a cyclical industry, normalized earnings are best described as A. current carnings that include the impact of acquisitions B. mid-cycle eamings in the absence of temporary factors. C. earnings from the peak years excluding temporary factors 9. Porter's five forces anslyss is used to estimate a company's future profit margin relate to. A. only its compothors B. only its historic margins. C. both its competitors and its historic margins
CFA Program Level I for February 2024 3 10. An analyst uses the following information to forecast a company's gross profit margin: Current Amount (in $ millions) Forecasted Growth Sales 1200 8% Cost of sales 300 4% The analysts forecasted gross profit margin should be closest to a(n) A. decrease of 1%. B. increase of 1% C. increase of 4%. 11. The price esticity of demand for a product is 0.5 and its cost remains constant, a 10% increase is selling price will most likely result in. A. no change in cost of sales B. a decrease in volume of 5% C. an increase in revenue of 5% 12. All else being equal, forecasting an increase in which of the following will most likely increase forecasted EPS for a company? A. Share repurchases B. Secondary stock issuances C. Equity based compensation of employees 13. Analyst gathers the following information (in € millions) relating to a company's merchandise inventory as of 31 December of Year 1. Cost 65 Net realizable value 60 Current placement cost 58