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  1. Home
  2. CFA Certification
  3. CFA-Level-I Exam
  4. CFA.CFA-Level-I.v2022-03-26.q499 Dumps
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Question 116

The primary market(s) for U.S. Treasury securities is (are):
I). the New York Bond Exchange
II). Federal Reserve System auctions
III). a series of distribution arrangements with large U.S. banks
IV.NASDAQ

Correct Answer: A
The Federal Reserve (the Fed) auctions bonds for the Treasury as a service. The Treasury does not have direct contact with the financial markets, whereas the Fed interacts in the markets as a regular course of business, most directly with the approved government bond dealers with whom it deals in the conduct of monetary policy.
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Question 117

Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 70% of the estimated economic life of the leased property. How should the lessee classify these leases?

Correct Answer: C
If the lease term equals or exceeds (>=) 75% of the asset's economic life, the lease should be categorized as a capital lease by the lessee.
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Question 118

Which of the following is true of a monopoly?

Correct Answer: B
There is no entry or exit in purely monopolistic markets.
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Question 119

If the cross elasticity of demand is -2:

Correct Answer: C
This means that e.g. a 10% increase in the price of one product reduces the quantity demanded of another product by 20%; the products are complements and the cross price elasticity is elastic (because the effect on quantity demanded is greater than the change in price in percentages).
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Question 120

According to the FASB, which of the following measures do financial statement users find most useful in predicting future cash flows?

Correct Answer: B
Accrual accounting earnings are based on the forward-looking nature of the accrual basis.
Since accrual earnings try to match performance with revenue and expense recognition, they tend to do a better job of predicting future cash flows.
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