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 Sample Exam Test 19 Questions for Level 1 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: 181:
John Cochrun is a reputed money manager who is also an AIM member. John recently discovered that some employees at the firm where he is employed have been engaging in some questionable activity which could very well be construed insider trading by the SEC. John, however, does not think the activity is egregious enough to be reported to the SEC. In any case, he does not want to be known as “the rat who blew the whistle.” By not reporting the criminal activity,
Option A : has not violated the AIMR code.
Option B : violated the AIM code, Standard I (B) – Fundamental Responsibilities.
Option C : violated the AIM code, Standard III (C) – Disclosure of Conflicts to the Employer.
Option D : violated the AIMR code, Standard III (B) – Duty to the Employer.
Option A : has not violated the AIMR code.
The AIR code does not require members to report legal violations to the appropriate authorities, as long as they don’t associate themselves with such activities.
CFA Level 1 Exam Question No: 182:
Albert and Tye, who recently started their own investment advisory business, have registered to take the Level III CFA examination. Albert’s business card reads, “Judy Albert, CFA Candidate.” Tye has not put anything about the CFA designation on his business card, but promotional material that he designed for the business describes the CFA requirements and indicates that Ty participates in the CFA Program and completed Levels I and II. According to the Standards:
Option A: Albert has violated the Standards but Tye has not.
Option B: Neither Albert nor Ty had violated the Standards.
Option C: Tye has violated the Standards and Albert has not.
Option D: Both Albert and Ty have violated the Standards.
Option A : Albert has violated the Standards but Tye has not.
The question deals with Standard II (A), Use of Professional Designation. Candidates may not use the designation in any form prior to actually obtaining their charter. Therefore, Albert has violated Standard II (A). Candidates may communicate that they are participating in the CFA Program, however and may state the levels that they have completed. Therefore, Tye has not violated Standard II (A).
Free CFA Level 1 Mock Exam Question No: 183:
An investment management firm has been hired by TV Corporation to work on an initial public offering for the company. The firm’s brokerage unit now has a sell recommendation on TV, but the head of the investment banking department has asked the head of the brokerage unit to change the recommendation from sell to buy. According to the Standards, the head of the brokerage unit would be permitted to:
Option A: Increase the recommendation by no more than one increment (in this case. to a hold recommendation).
Option B: Assign a new analyst to decide if the stock deserves a higher rating.
Option C: Place the company on a restricted list and give only factual information about the firm.
Option D: Reassign responsibility for rating the stock to the head of the investment banking unit.
Option C : Place the company on a restricted list and give only factual information about the firm.
This question relates to Standard IV (A.3), Independence and Objectivity. When asked to change a recommendation on a company stock to gain business for the firm the head of the brokerage unit must refuse in order to maintain his independence and objectivity in making the recommendation. To avoid the appearance of a conflict of interest, the firm should discontinue issuing recommendations about the company.
Changing the recommendation in any manner is a violation of the member’s duty to maintain independence and objectivity. Assigning a new analyst would not address the conflict of interest. Reassigning responsibility for the stock to the head of investment banking would actually exacerbate the conflict.
CFA Level 1 Free Practice Question No: 184:
Which of the following is/are a correct statement of a member’s duty under the Code and Standards?
I. In the absence of specific applicable law or other regulatory requirements, the Code and Standards govern the member’s actions.
II. A member is required to comply only with applicable local laws, rules, regulations, or customs even though the AIM Code and Standards may impose a higher degree of responsibility or a higher duty on the member.
III. A member who trades securities in a foreign securities market where no applicable local laws or stock exchange rules regulate the use of material nonpublic information may take investment action based on material nonpublic information.
Option A: I only.
Option B: III only.
Option C: I and II only.
Option D: II and III only.
Option A : I only.
This question pertains to Standard I, Fundamental Responsibilities – specifically, international application of the Code and Standards. If applicable law is more strict than the requirements of the Code and Standards, members must adhere to applicable law, otherwise, members must adhere to the Code and Standards – thus, I is correct. Members must adhere to the higher standard set by the Code and Standards if local applicable law is less strict- thus, II is incorrect. When no applicable law exists, the Code applies – thus, Ill is incorrect.
Free CFA Practice Question No: 185:
With regard to calculation of returns for international portfolios, a consistent source of _______ should be used.
Option A: exchange rates
Option B: trades.
Option C: settlements.
Option D: disclosures.
Option E: taxes.
Option A : exchange rates
Whenever the currency overlay manager is notified of changes in the underlying currency exposures as a result of a shift in the underlying assets, the currency overlay portfolios should be revalued to ensure consistency.
CFA Level 1 Sample Question No: 186:
Which of the following is NOT true about Standard IV (A.2) – Research Reports?
Option A: None of these answers.
Option B: The analyst must separate fact from statistical conjecture to be in compliance with the standard.
Option C: As long as the analyst has carried out adequate investigation, she can omit from the report certain aspects of the investigations that she deems unimportant.
Option D: The report must contain a basic description of the characteristics of the investment under consideration.
Option A : None of these answers.
Standard IV (A.2) – Research Reports.
Free CFA Level 1 Quiz Question NO: 187:
According to the AIMR-PPS, assets to which the Standards cannot be applied are not to be considered by firms when claiming compliance with the Standards. Which of the following is an example of an asset to which the Standards cannot be applied?
Option A: Guaranteed investment contract assets.
Option B: Convertible securities.
Option C: International assets.
Option D: Assets managed to more than one base currency.
Option A : Guaranteed investment contract assets.
Traditional GIC portfolios provide stable results that are not based on a mark-to-market valuation. The valuation of the traditional GIC is based on book value, not current market value, which are the valuations required by the total return calculation and reporting requirements of the Standards. GIC assets would be reported separately.
Free CFA Level 1 Quiz Question NO: 188:
Under the Performance Presentation Standards, asset-weighting of portfolio returns within a composite is required. The _______ of period weightings must be used.
Option A: beginning.
Option B: end.
Option C: none of these answers.
Option D: midpoint.
Option A : beginning.
Composites must be asset weighted using beginning-of-period weightings.
Free CFA Practice Question No: 189:
ERISA fiduciaries must adhere to the following prudent procedures: + establish a written investment policy for the plan________ plan assets – make investment decisions with the skill and care of prudent expert
– monitor investment performance
– control investment expenses – avoid prohibited transactions
Option A: distribute.
Option B: qualify.
Option C: account for.
Option D: none of these answers.
Option E: diversity,
Option E : diversity,
These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence.
CFA Mock Exam Free Question No: 190:
Which of the following is/are true about claims of compliance with the AIMR-PPS?
I. If a firm is only in partial compliance with PPS, it must use a disclaimer specifying the exact areas of non-compliance.
II. If the calculation methodology used by a firm follow standard industry practice, it is allowed to claim that the methodology is in compliance with the AIMR-PPS.
III. If a member misuses the claim of compliance with the PPS, AIMR can publicly censure him, suspend his membership and revoke his CFA charter.
Option A: I, II and III.
Option B: none of them.
Option C: III only.
Option D: I and III only.
Option C :
A firm cannot claim partial compliance with the PPS. It is either fully compliant or non-compliant. Further, statements referring to the calculation methodologies being in accordance with the PS are explicitly prohibited; the PS are mainly presentation standards, not measurement standards. Violations are punishable by public censure, membership suspension and revocation of CFA charter.