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?

• A.Lease A: Operating lease; Lease B: Operating lease
• B.Lease A: Capital lease; Lease B: Capital lease
• C.Lease A: Capital lease; Lease B: Operating lease

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Given a 30-day horizon, a money market yield of 4.0134% produces a(n)

• A.holding period yield of 0.3554%
• B.holding period yield of 0.4354%
• C.effective annual yield of 4.1460%

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Gary Ply, a member of a large investment firm, has just secured a new client. In terms of CFA
Institute's Standards of Professional Conduct when dealing with the procedures for compliance per
Standard III (C): Suitability, which of the following factors that need to be considered when looking at the new investors constraints?
I). liquidity needs.
II). time horizon.
III). tax considerations.
IV). proxy voting responsibilities and guidance.

• A.I, II, III and IV.
• B.II, III and IV.
• C.I, II and III.

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Even though Mary's income is very low, she makes sure that she purchases enough milk for her family to drink. As her income rises, she does buy more milk. Which graph in Figure 5.3 best represents
Mary's Engel curve for milk?

• A.B
• B.C
• C.D

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If the standard deviation of a population is 100 and the sample size taken from that population is 64, the standard error of the sample mean is closest to:

• A.0.64.
• B.1.56.
• C.12.50.

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