Sample Questions Outcomes

8/19/2019 Sample Questions Outcomes

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SAMPLE QUESTIONS OUTCOMES

1. READ ALWAYS THE QUESTION CAREFULLY AND PUT

ATTENTION ON ALL THE KEY WORDS AND GRAMMATICAL

IMPLICATIONS OF THE SENTENCE.

SESSION 1 – ETHICS AND PROFESSIONAL STANDARDS

1. GIPS does not !!o" #o$ %$t&! 'o(%!&n'e.

2. GIPS not permit defne a frm as a regional branch, only one claim must

include all regional branches o the frm (")o!e *$( 'o(%!&nt).

. !easures to se%$te &n+est(ent ,n-&n d&+&s&on nd ,$o-e$e

de%$t(ent are *$e"!!s or $est$&'ted !&st (not legal list).

". No,od/, unless the author, is able to $ed t)e %$e0$e!ese o# n

&n+est(ent $e'o((endt&on.

#. Not !! %$o&es s)o2!d ,e +oted, only should be $oted those selected

ater a 'ost0,ene*t n!/s&s.

%.

SESSION 3 – QUANTITATI4E 5I6

1. &onceptual di'erences beteen $e72&$ed $et2$n (minimum le$el

reuired by in$estor), d&s'o2nt $te (rate at hich e discount cash *osand computed based on rates earned in other a'ordable pro+ects) and

o%%o$t2n&t/ 'ost (earnings not realied due to underta-e a pro+ect).

2. Stted Rte (holding period return) / (number o periods)0 not miss

that the periodicity o stated rate is rele$ant hen sol$ing uestions.

. a-e care o d&8e$en'es ,et"een Ann2&t&es nd Ann2&t&es D2e.

". Ann2&t&es alays start at the *$st dte o# t)e *$st %e$&od, alays

should ta-e into account this act.

#. irst out*o in in$estment pro+ects is !"/s &n t9: (i.e. ne3t " periods

ould end in t", not in period #).

%. 4hen calculating Ho!d&n Pe$&od Ret2$n !"/s (2st t-e &nto

''o2nt t)e 'o2%on, not only compute it using initial and fnal prices.

5. Mone/ We&)ted Ret2$n I66 o a gi$en portolio.

7. 8lays ta-e into account d&+&dends in !oney 4eighted and ime

4eighted problems and do not (&ss t)t d&+&dends 'o$$es%ond to one

s)$e, and e should compute or all the shares.



9. Put attention hen T&(e We&)ted Ret2$n %e$&ods $e "&t)&n t)e

s(e /e$ o$ &n d&8e$ent /e$s, due to this act ill a'ect the root o the

products.

1:. Put attention on the t/%e o# /&e!d t)e 72est&on s-s #o$.

11. Coe;'&ent o# 4$&t&on Standard ;e$iation < !ean

12. S(%!e (statistic) hile Po%2!t&on (parameter).

1. 8 F$e72en'/ Po!/on &s 'o(%osed ,/ !&ne t)t !&n-s %o&nts

representing the absolute reuency o an outcome.

1". he Geometric !ean is alays !o"e$ o$ e72! than 8rithmetic !ean.

1#. he Co(%o2nd Ann2! Rte &s 'o(%2ted 2s&n t)e Geo(et$&'

Men in the case o portolios= return.

1%. A!"/s 2se t)e Pe$'ent&!e Fo$(2!, ne$er trust in the $isual or uic-

reasoning.

15. a-e care about ")t %e$'ent&!e the uestion is as-ing or.

17. Put attention on hether the 72est&on &s &+&n t)e Stnd$d

De+&t&on o$ t)e 4$&n'e, in hom case e must compute the de$iation.

19. T)e Rne (tte$s &n s-e"ness, the distance beteen the !ode and

e3treme $alues o the range denotes the e3tent o s-eness.

2:. A$&t)(et&' Men (best estimator or the ne3t year) hile Geo(et$&'

Men (best estimator or the compound groth rate).

21. 8n E+ent is a set o# one o$ (o$e %oss&,!e o2t'o(es o the random

$ariable.

22. 8 6andom >ariable !"/s (2st ,e n2(,e$.

2. Odds Prob < (1 ? Prob) @ In$erse Adds (1 ? Prob) < Prob (This is related

with the next point)

2". Odds In+e$se 1 to 3B1 or 3C1 to 1 depending on here is 1 in theoriginal odd (i.e. 12 to 1 CD 1 to 1 and in$erse)

2#. Un'ond&t&on! P$o,,&!&t/ P (8)

2%. </es T)eo$e(E alays used hen the e$ent e -no has produced in

the second phase o the diagram tree.

25. Stt&st&'!!/ Inde%endent Independent (standard term).

27. Cond&t&on! E%e'tt&onE it means that you redefne the probability o

an e$ent gi$en ne inormation a'ecting it.

29. Co+$&n'eE it can be positi$e or negati$e.



:. 8bsolute $alue o Co+$&n'e does not matter, on!/ &ts s&n &s

$e!e+nt.

1. 4hen Co+$&n'e &s : it can be dueE 1< no $e!t&ons)&% at all or 2< no

linear relationship, but a non0!&ne$ $e!t&ons)&% (/ e&st.

2. Anly use e%e'ted +!2e hen e )+e t)e %$o,,&!&t/ o# n

o2t'o(e.

. Fot miss 'o(%2te t)e s72$e $oot o# +$&n'e ")en '!'2!t&n

t)e stnd$d de+&t&on o a gi$en portolio.

". D&+&dends $e 'ons&de$ed s O2t=o"s hen computing the !oneyC

4eighted 6eturn.

#. 4hen computing $ariance using probabilities and eighted mean,

!"/s (-e t)e s72$e o# t)e %$$%) ,e#o$e t)e (2!t&%!&'t&on

,/ t)e %$o,,&!&t/.

%. 8lays d$" t)e t&(e!&ne hen computing T&(e We&)ted and

Mone/ We&)ted returns.

5. In ime 4eighted and !oney 4eighted problems, t91 (ens *n! o#

/e$ 1.

7. he median or a ran-ed sample (i.e. : to 1:, 1: to 2:) &s not t)e

(&dd!e +!2e o# e') $o2%0 e should 'o(%2te t)e #$'t&on "&t)&n

t)e &nte$+!.

9. Do not 2se t)e %e$'ent&!e #o$(2! 5>:?6 #o$ t)e Med&n, better

2se N@3 and then fnd the $alue among sorted $alues.

":. Put attention hen uestion gi$es the '2(2!t&+e #2n't&on F56, due

to it shos the probability loer than (3), and "e do not need to s2( !!

t)e %$o,,&!&t&es ,e!o".

"1. 6emember that ormula or <&no(&! %$o,,&!&t/ 2ses 'o(,&nt&on

5N @ 5N – B6 B6

"2. T&(e "e&)ted return must be 'o(%2ted 2s&n !! %e$&ods $et2$n,e$en those here securities are not sold or bought.

". Not (tte$ t)e n2(,e$ o# s)$es t$ded &n 'o(%2t&n t&(e

"e&)ted return, only need to calculate one share return.

"". T0,&!!s $e 'ons&de$ed no(&n! $&s-0#$ee rate indicators, due to they

'ont&n n &n=t&on %$e(&2( (Fom 6eal B In*ation)

"#. he stted nn2! $te is e72! to No(&n! $te.

"%. he %e$&od&' e8e't&+e nn2! $te is simply 51 5$@66 hereperiodic can be uarterly, monthly, biannual



"5.

SESSION – QUANTITATI4E 5II6

1. 6ead careully hen as-ing about the probability o a set o# o2t'o(es

o$ s%e'&*' o2t'o(e.

2. 4hen calculating confdence inter$als and the (en &s &+en s

%e$'ente $et2$n o an asset, e must 2se t)e non0%e$'ente +!2e

(i.e. 2.#H CD 2.#) due to $ariance and sample sie is not gi$en as a

percentage.

. Do not (&ss to 'o(%2te t)e s72$e $oot o the sample hen

calculating the stnd$d e$$o$.

". 8lays chec- i a s(%!e &s !o"e$ t)n :, due to in that case e

should 2se t)e T0St2dent d&st$&,2t&on.

#.

SESSION – ECONOMICS 5I6

1. O%%o$t2n&t/ Costs 9 &(%!&'&t 'osts (pure opportunity cost li-e

oregone interest, economic depreciation or normal proft) e%!&'&t 'osts

(rent, material)

2. 8lays detect ")&') -&nd o# %$o*t t)e 72est&on s-s #o$ (accounting,

economic, normal or economic rent).

. E'ono(&' Rent d&8e$en'e beteen e 't2!!/ e$n nd t)e

ot)e$ ,est !te$nt&+e (hile o%%o$t2n&t/ 'ost ould be the amount

earned ta-ing the second best option).

". 8lays dra a d&$( ith cur$es or reasoning behind the 'on'e%ts

t)e 72est&on &n+o!+es.

#. or %2,!&'!/ t$ded 'o$%o$t&ons, the $e72&$ed $te o# $et2$n &s

&nte$%$eted s t)e &(%!&'&t 'ost the frm aces.

%. 8lays d$" t)e %!ot hen acing problems about s)o$t o$ !on te$(.

5. 4hen calculating real e3change rate and interest rate parity, &dent&#/

'!e$!/ ")&') '2$$en'/ &s #o$e&n nd ")&') '2$$en'/ &s nt&on!.

7. In+ento$/0to0s!es $t&o nd 2t&!&t&on o# #'to$s are indicators o

'2$$ent 'ont$'t&on @ e%ns&on, not uture predictors.

9.

SESSION 1 – CORPORATE FINANCE

1. he t2$no+e$ o an element &s &n+e$se!/ $e!ted ith the +e$ed/s o the element.



2. he +e$e 'o!!e't&on %e$&od reers to the n2(,e$ o# d/s t)e

'$ed&t '!&ents t-e to %/.

.

".

SESSION 101> – EQUITY IN4ESTMENTS

1. he ROE also can be computed as ROA (2!t&%!&ed ,/ F&nn'&!

Le+e$e.

2. P$e#e$$ed sto'- does not %/ d&+&dends &n n e$n&ns ,s&s 0 it

pays f3ed payments, so e must e'!2de e8e't o# e$n&ns nd

d&+&dends $o"t) in the ;iscount !odel calculation.

. 8n in$estor 'nnot e$n ,no$(! %$o*t "&t) st$te&es 'ont$$/

to ($-et sent&(ent hen ($-ets $e e;'&ent.

".

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