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 Practice Test 5 Questions 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: 441:
Adam grey, CFA is a struggling independent money manager with limited clients. One of his clients, Stephen pension fund is dissatisfied with grey’s performance and has told him that in case the performance doesn’t improve, they will consider switching funds to new money manager. Majority of revenues of grey comes from fund and he is not in a position to loose them. To show them improved performance, he allocates profitable transactions to fund and unprofitable transaction to remaining clients. Grey has
Option A : Not violated standard III(B) as it is manager’s discretion as to how he allocates transaction.
Option B : Has violated standard III(B) as he doesn’t follow transaction allocation process in a fair manner.
Option C : Not violated standard III(B) as fund is his largest client and hence he owes higher loyalty towards it.
Show/Hide Answer
Option B : Has violated standard III(B) as he doesn’t follow transaction allocation process in a fair manner
CFA Level 1 Exam Question No: 442:
Below is information about two stocks that operates in different economies:
Stock Angelina: Stock has a beta of 1.5 and risk-free rate is 4% and return on market is 12%.
Stock Brad: Expected return of stock Brad is 18%, beta is 2.2 and risk-free rate is 6%.
You are required to calculate expected return of stock Angelina and expected return for the market in which Brad operates.
Option A: 16.0% , 11.45%
Option B: 17.5% , 11.45%
Option C: 16.0% , 10.95%
Show/Hide Answer
Option A: 16.0% ,11.45%
Free CFA Level 1 Mock Exam Question No: 443:
A team lead is assigning year end ratings to its team members according to their performance. The team comprises of 10 members and according to HR policy, top 10% can be assigned top rating, followed by 20% who can be assigned good rating, 40% can be assigned normal rating and 30% as worst rating. How many different ways is it possible for supervisor to assign these ratings?
Option A: 12,600
Option B: 5,800
Option C: 380
Show/Hide Answer
Option A : 12,600
CFA Level 1 Free Practice Question No:444:
LAUREN SCHRODER, CFA WORKS FOR ADG MANAGERS AND KNOWS THAT CHARLES MARTINS IS ENGAGED IN UNETHICAL ACTIVITY. LAUREN APPROACHES LEGAL COUNSEL OF FIRM WHO ADVISES THAT SINCE LAUREN IS NOT ENGAGED IN SUCH CONDUCT, SHE SHOULD NOT REPORT ANY VIOLATION TO REGULATORY AUTHORITY. LAUREN SHOULD:-
Option A: NOT REPORT THE VIOLATION TO REGULATORS BECAUSE SHE SHOULD ACT AS PER THE ADVISE OF FIRM’S LEGAL COUNSEL.
Option B: SHE SHOULD REPORT THE ACTIVITY TO SUPERVISOR, TAKE INDEPENDENT LEGAL ADVISE OF WHETHER TO REPORT IT TO REGULATORS.
Option C: SHOULD REPORT THE VIOLATION TO REGULATORS AS IT IS REQUIRED BY CODE OF ETHICS
Show/Hide Answer
Option B : SHE SHOULD REPORT THE ACTIVITY TO SUPERVISOR, TAKE INDEPENDENT LEGAL ADVISE OF WHETHER TO REPORT IT TO REGULATORS.
Free CFA Practice Question No: 445:
Below are cash flows of two projects-A&B. You are required to calculate crossover rate.
Option A: 16.26%
Option B: 17.16%
Option C: 12.89%
Show/Hide Answer
Option B: 17.16%
CFA Level 1 Sample Question No: 446:
Sam Emara, CFA is performing return calculation for composites of its firm XYZ Ltd. and as per calculation, in last 5 years the average return for Composite 1 is 25% compared to benchmark return of 10%. Firms marketing material quote “XYZ has consistently beaten benchmark and has generated positive risk-adjusted returns for its investors. Ex – Composite 1 has generated positive risk adjusted return for investors”. However, Sam fails to state in marketing material that accounts taken for return calculation of composite was chosen at management’s discretion and that not all accounts were taken into consideration. Which of the following is correct?
Option A: There is no violation of standard I(C) however, standard I(D) is violated as performance statement is incorrect.
Option B: Standard I(C) is violated as by calculating return without considering all accounts as this amounts to cherry-picking.
Option C: Standard I(C) is violated as statement that firm as consistently generated positive risk adjusted return in not allowed
Show/Hide Answer
Option C : Standard I(C) is violated as by calculating return without considering all accounts as this amounts to cherry-picking.
Free CFA Level 1 Quiz Question NO: 447:
An analyst has gathered following information: Current market price per share of common stock: $60; Most recent dividend paid per share: $4; Expected dividend payout ratio: 0.45; Expected return on equity: 20%; Beta of common stock: 1.2; Expected rate of return on market portfolio: 15%; Risk-free rate of return: 4%; Preference dividend per share: $8.5; Face value of preference share: $100; Market value of preference share: $105.
You are required to calculate cost of equity as per dividend discount model and cost of preference capital.
Option A: 11%; 8.1%
Option B: 18.4%; 8.5%
Option C: 18.4%; 8.1%
Show/Hide Answer
Option C : 18.4%; 8.1%
Free CFA Level 1 Quiz Question NO: 448:
Determine the median, mode and 7th decile of the below data set:
-8%, 16%, 4%, 0.5%, 8.8%, 12%,-4.5%, 9.5%, -1%, 16%, -6.6%, -2.26%.
Option A: 2.25% ,8.8% ,10.1%
Option B: 2.25% ,16%,9.75%
Option C: 3.25%,16%,9.75%
Show/Hide Answer
Option B : 2.25% ,16%,9.75%
Free CFA Practice Question No: 449:
Steve Smith, CFA is engaged in bond trading for a large investment firm. In addition to trading, Smith is also associated with an NGO looking after orphan children. Smith collects donation from his firm personnel’s both in cash & in kind to be donated to NGO. However, he keeps the cash for his own use and sells the goods received in kind. Which of the following is most accurate?
Option A: Smith is in violation of standard I(D) given he has deceived the personnel’s by taking donation with the impression that it will be passed on to NGO but actually keeps it himself.
Option B: Smith is not in violation if standard I(D) as this is not related to his professional job of bond trading.
Option C: Smith is in violation however, only with respect to the gifts received in cash and not for gifts received in kind.
Show/Hide Answer
Option A : Smith is in violation of standard I(D) given he has deceived the personnel’s by taking donation with the impression that it will be passed on to NGO but actually keeps it himself.
CFA Mock Exam Free Question No: 450:
Black pearl is in ship-building business and is considering a new venture of commercial aircraft manufacturing. Black pearl reports a current Debt/Equity ratio of 1.2, before tax cost of debt of 8% and marginal tax rate of 30%.
Airbus is in business of commercial aircraft manufacturing and can be considered a comparable company with D/E ratio of 0.8, equity beta of 1.5 and marginal tax rate of 40%.
Given that risk-free rate in UK is 2%, market risk premium is 7% calculate the WACC that Black pearl should use to evaluate the risk of entering into aircraft business.
Option A: 9.91%
Option B: 12.13%
Option C: 15.09%
Show/Hide Answer
Option A : 9.91%
