Hi CFA Aspirants, welcome to AKVTutorials. Are you preparing for CFA Level 1, 2, 3 exams for making a career in CFA (Charted Financial Analyst). According to CFA Wikipedia, CFA The Chartered Financial Analyst (CFA) program is a postgraduate professional certification offered internationally by the American-based CFA Institute. A candidate who successfully completes the program and meets other professional requirements is awarded the “CFA charter” and becomes a “CFA charter holder”. Therefore, you need CFA Study Notes and CFA Level 1 Exam 17 Questions Bank Answer Keys AMBIPi.
In this article, you will get Free CFA Level 1 Mock Exam Practice Questions.
Free CFA Level 1 Mock Practice Exam Questions Bank
Free CFA Level 1 Practice Question No: 161:
Level _______ verification assures that all of the firm’s actual, discretionary, fee-paying portfolios are included in at least one composite.
Option A : V.
Option B : II.
Option C : IV.
Option D : I.
Option E :III.
Option D : I.
Level I Verification requires that each of the firm’s discretionary, fee-paying portfolios is included in at least one composite and that the firm’s procedures for assigning portfolios to composites are reasonable and have been consistently applied over time.
CFA Level 1 Exam Question No: 162:
Level ______ verification applies to specific composites.
Option A: 0.
Option B: IV.
Option C: II.
Option D: I.
Option E: III.
Option C : II.
Level I verification applies to all firm composites. Level I verification requires a Level I verification at least on the specific composites being verified at Level II.
(Note: There are only two levels of verification.)
Free CFA Level 1 Mock Exam Question No: 163:
All of the following statements about a member’s use of clients’ brokerage commissions are true except
Option A: client brokerage commissions may be directed to pay for the investment manager’s operating expenses.
Option B: client brokerage commissions should be commensurate with the value of the brokerage and research services received.
Option C: client brokerage commissions may be used by the member to pay for securities research used in managing the client’s portfolio.
Option D: client brokerage commissions should be used by the member to ensure that fairness to the client is maintained.
Option A : client brokerage commissions may be directed to pay for the investment manager’s operating expenses.
This question deals with Standard IV (B. 1), Fiduciary Duties and the specific topic of soft dollars. All the answers deal with the use of client brokerage commissions and the criteria for their use – (1) fairness to the client and (2) commensurate with the value of the services provided. The only statement that is not true is that client brokerage commissions may not be directed to pay the investment manager’s operating expenses.
CFA Level 1 Free Practice Question No: 164:
Which of the following persons does AIM hold most accountable for fiduciary duties owed to clients?
Option A: Investment Advisors.
Option B: Brokers.
Option C: None of these answers.
Option D: Dealers.
Option C : None of these answers.
AIMR’s Code and Standards do not make distinctions among brokers, dealers and investment advisors when it comes to fiduciary duties toward customers. All members must comply with the conduct required of them by the Code and Standards or applicable law, whichever is higher.
Free CFA Practice Question No: 165:
When formulating an investment policy for a client, all of the following fall under the category of “investor constraints,” except:
Option A: risk tolerance.
Option B: liquidity needs.
Option C: expected cash flows.
Option D: regulatory and legal circumstances.
Option E: time horizon.
Option F: tax considerations.
Option G: investable funds.
Option H: investor preferences, circumstances and unique needs.
Option A : risk tolerance.
Risk tolerance is considered under “investor objectives,” not “investor constraints.”
CFA Level 1 Sample Question No: 166:
When presenting the components of total return for a real estate portfolio, the recognition of income at _______ level, rather than at the operating level, is preferred.
Option A: risk.
Option B: purchase.
Option C: realized.
Option D: investment.
Option E: composite.
Option D : investment.
This is recommended under the AIMR-PPS for presenting investment performance results.
Free CFA Level 1 Quiz Question NO: 167:
The financial analyst is allowed to breach client confidentiality if the information concerns _________ activities that the client is
Option A: personal.
Option B: confidential.
Option C: insider.
Option D: none of these answers.
Option E: illegal.
Option E : illegal.
Standard IV (B.5) states that “Members shall preserve the confidentiality of information communicated by clients, prospects, or employers concerning matters within the scope of the client -member relationship, unless the member receives information concerning illegal activities on the part of the client.”
Free CFA Level 1 Quiz Question NO: 168:
When complying with Standard IV (B.3) – Fair Dealing, there are certain points one should be sure to address when establishing compliance procedures. Which of the following points is NOT mentioned in the Standards of Practice Handbook?
Option A: Get as many people involved within the firm that a recommendation is going to be disseminated.
Option B: Shorten the time frame between decision and dissemination.
Option C: Disclose levels of service.
Option D: Establish control over trading activity.
Option E: Simultaneous dissemination.
Option F: Publish personnel guidelines for predissemination
Option G: Establish systematic account review.
Option A : Get as many people involved within the firm that a recommendation is going to be disseminated.
Members have an obligation to ensure that their firms establish compliance procedures requiring all employees who disseminate investment recommendations or actions to treat clients fairly. The number of people privy to an investment recommendation should be limited. The amount of time that lapses between the decision and the dissemination of the recommendation should be shortened.
Guidelines must be established to prohibit persons who have prior knowledge from discussing a pending recommendation. Trading activities should be monitored and controlled. Supervisors should review accounts on a regular basis to ensure that no client is being given preferential treatment.
Free CFA Practice Question No: 169:
According to the AIMR-PPS, performance results of a past firm or affiliation.
Option A: must always be linked to the historical records of the new firm to show a fair and true representation of results.
Option B: none of these answers.
Option C: may or may not be linked to the historical records of new firm or affiliation, it is left to the discretion of the investment manager and that information should be disclosed.
Option D: must not be used to represent the historical record of a new affiliation or a new firm identity.
Option D : must not be used to represent the historical record of a new affiliation or a new firm identity.
Performance results of a past firm or affiliation must not be used to represent the historical record of a new affiliation or a new firm entity. This is a requirement for presentation of results.
CFA Mock Exam Free Question No: 170:
Various countries’ securities laws permit a manager to pay up for goods and services without violating the manager’s fiduciary duty, so long as the requirements of the law are followed. Each of the following are typical requirements, except:
Option A: the manager’s soft-dollar practice should be always maintained confidentially in his or her files.
Option B: at all times, the manager must seek best price and execution.
Option C: the commission paid must be reasonable in relation to the research and execution services received.
Option D: the goods or services purchased must be for “research service.”
Option E: none of these answers.
Option A : the manager’s soft-dollar practice should be always maintained confidentially in his or her files.
The soft-dollar practice must be disclosed.