Certified Management Accountant Free Practice Questions Set 2

Which of the following is the risk that the investor’s return from the investment in an asset will be less than the rate of inflation?
I. Inflation risk
II. Purchasing power risk
III. Market risk
IV. Beta market risk

Which of the following is(are) form(s) of credit risk?
I. Default risk
II. Downgrade risk
III. Spread risk
IV. Asset risk

Which of the following is(are) rating agencies in the United States?
I. Moody’s Investors Service
II. Standard & Poor’s
III. Leeman Brothers
IV. Fitch

Hedging the currency risk does raise the correlation between which of the following?
I. the foreign bond
II. U.S. bonds
III. U.S. stocks
IV. Non U.S. Dollar Government Bond Index

The sharp downturn in inflation since the early 1980s has led to which of the following outcomes?
I. Diversified bond returns.
II. Inflated bond returns.
III. Slower bond returns.
IV. High real bond returns.

The Maastricht Treaty of 1991 set Europe on a path toward monetary union in 1999, that spurred the high-inflation countries like which of the following to reign in their monetary policies to qualify for the union?
I. Italy
II. Denmark
III. Greece
IV. Spain

Which of the following was initially developed to allow U.S. and foreign companies to raise debt financing in foreign markets to fund their foreign operations?
I. The Non-U.S. Dollar Government Bond Index
II. The Luxenberg Bond
III. The international bond market
IV. The Eurobond

The world’s stock and bond markets are divided into which of the following?
I. Developed
II. Semi-developed
III. Emerging
IV. Under-developed

Returns on which of the following bonds will be enhanced during periods when foreign currencies are rising against the dollar?
I. Foreign bonds
II. Parallel bonds
III. International bonds
IV. Domestic bonds

Which of the following needs to be adjusted when measuring national income?
I. Cost of living
II. Inflation
III. Market prices
IV. Economic growth

In the past decade, emerging market bonds have become which of the following?
I. An easier alternative to diversifying investors stocks
II. An attractive asset for investors seeking international diversification
III. A major risk in investing international assets
IV. Increasingly important source of finance for emerging economies

Emerging economies have been able to expand financing through which of the following?
I. Newly issued Eurobonds
II.Bbonds syndicated and sold internationally
III. Bonds issued in traditional national bond markets
IV. Bond issued through stock exchange policy protocols

Which of the following is critical for investment advisors and consultants to know and understand?
I. the cash flow of investor capital
II. the sales profit margin
III. inflation
IV. the history of global financial markets

Investors have a variety of assets in which they can invest such as?
I. private equity
II. mortgages
III. real estate
IV. civil firms

With its rapid growth over the past two decades, which of the following economy is now larger than those of Germany, the United Kingdom, France, and Italy?
I. China
II. Argentina
III. Mexico
IV. Russia

Investment advisors and consultants must understand the mathematics behind the concepts in the area of which of the following?
I. Financial support
II. Time value of money
III. Equity value of money
IV. Marketing values

Investment advisors and consultants should be able to perform calculations with which of the following?
I. By hand
II. With a spreadsheet
III. Computer program
IV. Financial calculator

Which of the following form(s) the important foundation for understanding applied financial methods and formulae?
I. Statistics
II. Statistical concepts
III. Statistical calculations
IV. Statistical algorithms

Investment advisors and consultants should have a firm grasp on quantitative concepts in order to do which of the following?
I. Analyze historical data
II. Calculate and analyze investment risk and returns
III. Draw accurate conclusions
IV. Make appropriate recommendations to clients

A time series is an equation or set of equations describing which of the following?
I. How variables evolves over time.
II. How a random variable evolves over time.
III. How certain assumptions evolves over time.
IV. How equation variables evolves over time.

the most popular statistic for describing linear regressions is
I. The coefficient of determination
II. The R-squared
III. The T-Squared
IV. The casio regression

Investment advisors and consultants are subject to numerous laws and regulations that apply to the activities in which they engage in which of the following?
I. The products they provide.
II. The services they provide.
III. The relationships they have with specific clientele.
IV. The relationships they have with specific shareholders.

Investment professionals may be subject to oversight by the following regulators except?
I. The Securities and Exchange Commission
II. The Financial Industry Regulatory Authority
III. The state securities boards
IV. The Department of Finance Commission

Which of the following are recommended additional reporting and disclosures for compliance with the IMCA Performance Reporting Guidelines regarding manager search and analysis?
I. If sufficient history exists, one-, five-, and ten-year cumulative returns should be presented.
II. Performance composites presented to clients should be shown on a gross basis (before deduction of the investment manager’s fee).
III. Cumulative returns should be shown for each manager from inception of the firm, inception of the investment product, or 10 years—whichever is shorter.
IV. Performance composites presented to clients should be shown on a net basis (after deduction of the investment manager’s fee).

The Professional Review Board(PRB) is empowered to do which of the following?
I. Investigate alleged infractions of the Code, Standards of Practice, and Rules and issue orders regarding private or public censure, the suspension or termination of the right to use an IMCA Designation by Licensees, or termination of Candidates who are found to have violated the Code, Standards of Practice, Rules, or other orders as may be appropriate.
II. Report to the IMCA Board with respect to the operations of the PRB.
III. Consider and propose amendments to the Code, Standards of Practice, and Rules for action by the IMCA Board.
IV. Develop and adopt procedures for the fair and expeditious hearing of matters that come after it.

Which of the following risk(s) is(are) important for portfolio managers that must mark to market positions periodically?
I. Asset risk
II. Periodic risk
III. Liquidity risk
IV. Credit risk

The cash flows in the investor’s domestic currency are dependent on which of the following?
I. The exchange rate at the time the payments are received from the asset.
II. The asset whose payments are not in the domestic currency.
III. The credit ratings assigned to issues by rating companies.
IV. The true value indicated by a recent transaction.

Which of the following is the return earned from holding an asset for a single specified period of time?
I. Geometric Mean return
II. A holding period return
III. A mean return
IV. An arithmetic Return

The holding period return can be computed for which of the following period(s)?
I. Periods longer than one year
II. Periods within a year
III. Periods longer than one year but less than two years
IV. Periods within 30 days

Investment advisors and consultants are responsible for following laws and standards enforced by which of the following?

I. Government agencies
II. Industry self-regulatory bodies
III. The firms at which they are employed
IV. Corporate private regulators