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 Mock Exam 16 Practice Questions Free 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: 151:
Taxes must be recognized –
Option A : in the same period as when the taxable event occurred.
Option B : on a quarterly basis.
Option C : in the period immediately following the period in which the taxable event occurred.
Option D : on a yearly basis.
Show/Hide Answer
Option A :
Taxes must be recognized in the same period as when the taxable event occurred. This is a requirement for calculation of returns.
CFA Level 1 Exam Question No: 152:
Scott works for a regional brokerage firm. He estimates that Walkton Industries will increase its dividend by $1.50 a share during the next year. He realized that this increase is contingent on pending legislation that would, if enacted, give Walkton a substantial tax break. The U.S. representative for Walkton’s home district has told Scott that, although he is lobbying hard for the bill and prospects for passage look good, Congress’s concern over the federal deficit could cause the tax bill to be voted down. Walkton has not made any statements regarding a change in dividend policy. Scott writes in his research report, “We expect Walkton’s stock price to rise by at least $8.00 a share by the end of the year. Because the dividend will increase by $1.50 a share, the stock price gain will be fueled, in large part, by the increase in the dividend. Investors buying the stock at the current time should expect to realize a total return of at least 15 percent on the stock.” Which of the following is/are true?
I. Scott violated the Standards because he used material inside information.
II. Scott violated the Standards because he failed to separate opinion from fact.
III. Scott did not violate the Standards.
Option A: I and II only.
Option B: II only.
Option C: I only.
Option D: III only.
Show/Hide Answer
Option B : II only.
This question relates to Standard IV (A.2), Research Reports. Scott issued a research report stating that the stock price of Walkton is expected to rise to $8 a share “because the dividend will increase by $1.50 a share.” Yet, he made this assertion fully aware the dividend will increase only if Congress enacts certain legislation, which is an uncertain prospect. By stating that the dividend will increase, Scott failed to separate fact from opinion. The information on the passing of legislation is not material inside information because it does not come from or pertain to company operations.
Free CFA Level 1 Mock Exam Question No: 153:
Which standard deals with the Prohibition against Use of Material Nonpublic Information?
Option A: III.
Option B: III (B.4).
Option C: IV (B.4).
Option D: IV (B.5).
Option E: V (A).
Option F: III (B.2).
Show/Hide Answer
Option E : V (A).
Standard V(A) – Prohibition against use of material nonpublic information, states that “member who posses material nonpublic information related to the value of a security shall not trade in that security if such trading would breach a duty or if the information was misappropriate or relates to a tender offer.”
CFA Level 1 Free Practice Question No: 154:
An investment recommendation can be disseminated to clients via each of the following methods, EXCEPT:
Option A: through a brief update report.
Option B: by addition to a recommended list.
Option C: by oral communication.
Option D: through an initial detailed research report.
Option E: by deletion from a recommended list.
Option F: all of these answers are acceptable methods.
Show/Hide Answer
Option F : all of these answers are acceptable methods.
According to Standard IV (B.3) – Fair Dealing, an investment recommendation is any opinion expressed by a member in regard to purchasing, selling or holding a given security or other investment. All of the methods listed are acceptable for dissemination.
Free CFA Practice Question No: 155:
Parts of the standards that are ________ must be observed.`
Option A: recommended.
Option B: suggested.
Option C: mandatory.
Option D: restraining.
Option E: inhibiting.
Option F: must be observed.
Show/Hide Answer
Option C : mandatory.
Some aspects of the Performance Presentation Standards are mandatory and must be observed, while other aspects are recommended.
CFA Level 1 Sample Question No: 156:
A manager who pays a higher commission than would normally be paid to purchase the goods or services:
Option A: may be violating the fiduciary duties owed to the client.
Option B: none of these answers.
Option C: is violating the fiduciary duties owed to the client.
Option D: is not violating the fiduciary duties owed to the client.
Show/Hide Answer
Option C : is violating the fiduciary duties owed to the client.
This practice is commonly referred to as “paying up” for services.
Free CFA Level 1 Quiz Question NO: 157:
Relationships with and Responsibilities to the Employer are dealt with under:
Option A: Standard II.
Option B: Standard I.
Option C: Standard V.
Option D: Standard III.
Option E: None of these answers.
Option F: Standard IV.
Show/Hide Answer
Option D : Standard III.
Relationships with and Responsibilities to the Employer are dealt with under Standard III.
Free CFA Level 1 Quiz Question NO: 158:
Which of the following statements is/are correct under the Code and Standards?
I. AIMR members are prohibited from undertaking independent practice in competition with their employer.
II. Written consent from the employer is necessary to permit independent practice that could result in compensation or other benefit in competition with a member’s employer.
III. Written consent from the outside prospective client is necessary to permit independent practice that could result in compensation or other benefit in competition with a member’s employer.
IV. Members are prohibited from making arrangements or preparations to go into a competitive business before terminating their relationship with their employer.
Option A: II, III and IV only.
Option B: I and IV only.
Option C: IV only.
Option D: II and III only.
Show/Hide Answer
Option D : II and III only.
This question pertains to Standard III (B), which states that members may undertake independent practice that may result in compensation or other benefit in competition with a member’s employer, so long as they obtain written consent from both their employer and those for whom they undertake the independent practice. Statements II and III are consistent with this Standard. Statement I is incorrect because the Standards do not completely prohibit independent practice. Also, Statement IV is incorrect because the Standards allow members to make arrangements or preparations to go into competitive business so long as those arrangements do not interfere with their duty to their current employer.
Free CFA Practice Question No: 159:
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 must be disclosed.
Option B: the compensation received for engaging in the paying up must be reported in writing to the manager’s employer.
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: at all times, the manager must seek best price and execution.
Show/Hide Answer
Option B : the compensation received for engaging in the paying up must be reported in writing to the manager’s employer.
When paying up for goods and services, the requirements to be met include:
– ensuring that the goods or services purchased must be for “research service;”
– the commission paid must be reasonable in relation to the research and execution services received;
– the manager’s soft-dollar practice must be disclosed, and
– at all times, the manager must seek best price and execution. However, there is no requirement for any disclosure of compensation to the manager’s employer.
CFA Mock Exam Free Question No: 160:
Which of the following can be found in Standard III?
Option A: Members shall not misrepresent investment performance.
Option B: Members shall exercise diligence and thoroughness in making investment recommendations or in taking investment actions
Option C: Members shall not participate in any professional conduct involving dishonesty, fraud, deceit, etc.
Option D: Members shall deliver a copy of the Code to their employer.
Option E: Members shall not knowingly participate or assist in any violation of laws, rules, or regulations.
Show/Hide Answer
Option D : Members shall deliver a copy of the Code to their employer.
Standard III states that members shall deliver a copy of the Codes and Standards to their employer if the employer does not have a сору.
