1. Keisha is looking to avoid purchasing power risk as much as possible. She should consider investing in which type of security?

2. Joyce Price issues weekly investment reports. Joyce looks for trends and commonalities within the research community. She then presents the findings as her own research and doesn’t cite any sources. Joyce gives them to her boss, Soojung Yu, CFA. Soojung peer-reviews the reports and does not mention anything about citing sources.

Has Soojung most likely violated the Standards?

3. Haspiess Systems, Inc. and Signicomp Manufacturing enter into a netted interest rate swap, with a notional USD75M. Haspiess will pay a fixed 5%, and Signicomp will pay LIBOR + 75bp. LIBOR is 3.5%.

The first semiannual payment will be closest to:

4. Which of the following statements relating to obstacles to efficient allocation of resources is/are most likely incorrect?

I: Price ceilings set below the equilibrium price lead to shortages, bribery, poor quality and black marketeering.
II: Subsidies decrease equilibrium quantities and lead to dead weight losses from overproduction.
III: Production quotas decrease equilibrium quantities and lead to dead weight losses from underproduction.

5. Meta Corp. sells 15,000 units of its product at a price of USD10 per unit. The company’s fixed costs are USD12,000 and interest expense is USD3,000. The variable cost per unit is USD7.

Meta Corp’s degrees of operating leverage and financial leverage are: