AnalystPrep's Level II Practice Questions

For the CFA® Program exam | 1,500 vignette-style questions

Practice is key

If you ask most CFA charterholders, they will tell you there is only one way to passing the Level II CFA® Program exam: practice, practice... and practice like it's the real exam. This is why AnalystPrep's method of teaching is better than other preparation materials out there: AnalystPrep provides you with what you will be seeing in your Level II CFA® Program exam – item sets. Each item set is made up of a case statement (usually 800-1000 words long) and 6 multiple choice questions with detailed answers.

The Level II of the CFA® Program is often regarded as the most difficult from all of the three CFA® Program exams, and the team at AnalystPrep believes non-item set practice questions are basically useless. You want to practice on what you will be tested on when comes exam time! Therefore, CFA charterholders at AnalystPrep have designed 180 vignette-style item sets, which represent over 1,500 practice questions.

All item sets are organized by chapter and cover most of the important concepts that have been tested in past Level II CFA® Program exams. Simply register to AnalystPrep's platform to test out 10 item sets (60 free questions) and see why AnalystPrep will help you pass!

Pricing - Level II of the CFA® Program

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Example of a Level II CFA® Program exam case statement

Alcoa Intellect is an established software firm headquartered in Detroit, Michigan. It recently approached Comodo Solutions - one of its leading competitors - in an attempt to push through a merger that could consolidate Alcoa's position in the market and increase its market share. Unfortunately, Comodo's CEO turned down the offer without giving extensive details. Executives at Alcoa refused to give up. They are even prepared to adopt a hostile takeover approach.

Market reactions to the potential merger were significantly favorable. The market believes the merger would cultivate synergies which would increase future earnings of the firm to three times their current level.

Wary of rejection by Comodo's CEO, Alcoa is considering approaching the target's shareholders directly. This way, instead of purchasing an equity stake in the target outright, Alcoa hopes to convince current shareholders to cast their votes in favor of new directors nominated by Alcoa.

However, the CEO of Alcoa has indicated his preference to acquire Comodo through a tender offering. After thorough evaluation, analysts at Alcoa propose a two for three offering to the target's shareholders. Comodo Solutions currently has 12 million shares outstanding. Stock prices stand at $111 and $37 for Alcoa and Comodo respectively.

The management of Comodo had anticipated Alcoa's interest in its operations and had adopted a number of pre-offer takeover defenses. In its constitution, the firm had indicated that any individual or corporate entity that acquires and holds more than 20% of the shares outstanding will not be entitled to any voting rights. It had also included a fair price amendment stipulating that the floor bid should reflect the stock prices attained over the preceding three-year period. Exhibit 1 displays Comodo's quarterly stock prices over a three-year period.

Exhibit 1

QuarterPrice ($)
January 201044
April 201060
July 201048
October 201044
January 201152
April 201155
July 201158
October 201160
January 201263
April 201257
July 201257
October 201253

Question 1

Based on the information provided in the vignette, which type of offering would the acquirer's shareholders most likely prefer?

A) A cash offering.

B) A securities offering.

C) A mixed offering.



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