QUESTION 1142
Which of the following conditions is not a criterion for classifying a lease as a capital lease?

QUESTION 1143
Agency Rent-A-Car reports cash flows from acquisitions and sales of Rental Automobiles (RA) as investing activities. It provides an unclassified balance sheet, with RA reported under Property and
Equipment and amounting to at least 49% of total assets in 2010; car rentals are 77% of total revenue.
Net cash received on RA transactions of $5.751 million ($68.96 million realized on sales less $63.21 million spent on purchases) is highly material to Agency’s net $9.06 million investing cash outflow, less so to the $83.15 million reported operating cash flow. Agency’s rental fleet turns over about every other year.
The predominance of rental revenues and low RA turnover supports investing activity classification. The classification has a material effect on reported operating cash flow and investing cash flow. Reclassifying
Agency’s $5.75 million RA net cash inflow from investing to operating will ______ its net investing cash flow by 63% percent while ______ operating cash flow by 7%.

QUESTION 1144
If an industry experience patterns that do not correlate well against the general economy but trend against other economic variables such as stock prices, it is categorized as

QUESTION 1145
The market demand for an item is

QUESTION 1146
An upward-sloping short-run marginal cost curve shows that:

QUESTION 1147
Suppose that the price level is 100 in 1993, 115 in 1994, 125 in 1995. Over the period 1993 to 1995, we can say that the price level has ______ while the inflation rate has ________.

QUESTION 1148
Toward the top of the economic cycle, as final demand starts to fall off, ______ starts to occur abruptly.

QUESTION 1149
Quotas are more harmful than tariffs because

QUESTION 1150
Which one is the most likely reason for a current account deficit?

QUESTION 1151
Social security payments have been adjusted for inflation annually since the late 1970s yet it is sometimes argued that the cost of living for retirees on social security rises less than the cost of living adjustment used by the government. If this is the case, retirees:

QUESTION 1152
To estimate the average SAT scores for entering freshmen at universities, a random sample of 14
SAT scores is collected. If the sample mean produced a score of 1150 and the sample standard deviation is 150 points (ois unknown) then a 95% confidence interval is _______.

QUESTION 1153
The arbitrage free valuation approach uses the __________ on a __________ to discount each cash flow of a bond.

QUESTION 1154
A value-weighted index in which a $50 stock increased by 15% and a $45 stock decreased by 17% would

QUESTION 1155
Jumbo, Inc. had sales of $8,000 in November, $14,000 in December, and projects sales of $10,000 in
January, $12,000 in February, and $8,000 in March. The firm’s COGS in any given month is equal to 70% of the next month’s sales. The firm collects its receivables in 60 days and pays its payables in 30 days.
The firm begins January 1 with 10,000 in cash. All sales and purchases are on credit. There are no other costs or revenues. What is Jumbo’s cash balance at the end of February? Assume there are 30 days in every month.

QUESTION 1156
Country A is a favorite for the final soccer match. However, country B has a stronger chance of making it to the final if country A wins its semi-final match. The probability that both A and B make it to the final is estimated at 30%, and the probability of country A reaching the final is 60%. What is the conditional probability of country B making it to the final if country A wins its semi-final match?

QUESTION 1157
Susan Miller, CFA, works for an investment counseling firm. James Sims, a new client of the firm, is meeting with Miller for the first time. Sims had used another counseling firm for financial advice for years, but has switched his account to Miller’s firm. After a few minutes of ‘get-acquainted’ small talk, Miller explains to Sims that she has discovered a highly undervalued stock that offers large potential gains. She recommends that he purchase the stock for his account. Miller has committed a violation of CFA
Institute’s Standards of Professional Conduct. What should she have done differently?

QUESTION 1158
Using the arc convention, compute the approximate elasticity of demand from the following data:

QUESTION 1159
A front-end load mutual fund with a net asset value of $12.04 is being offer to investors at $12.35. The fund load would be closest to:

QUESTION 1160
Which item is included in the comprehensive income?
I). Unrealized gains/losses from held-to-maturity securities.
II). Unrealized gains/losses from trading securities.
III). Unrealized gains/losses from available-for-sale securities.

QUESTION 1161
ABC Corp. is considering the following mutually exclusive projects:
Which of the following would represent the most optimal choice?

QUESTION 1162
Regarding the disclosure requirements for PP&E, which piece of information is required by IFRS but not by U.S. GAAP?