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 Free CFA Level 1 Mock Exam Test 13 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: 121:
Level I verification requires independent attestation that the requirements of the AIMR-PPS have been met on a(n) _______. basis.
Option A : international.
Option B : nationwide.
Option C : firmwide.
Option D : attainable.
Show/Hide Answer
Option C : firmwide
This is a requirement under Level I verification procedures
CFA Level 1 Exam Question No: 122:
Arditti manages the pension plan for a publicly traded firm, Eros Computers and in this capacity, has the right to vote 0.5% of the common shares outstanding. Recently, Eros wanted to expand its production operations into Latin America and the board had decided to put the matter for open vote from shareholders. Arditti was on vacation in Fiji at the time and when she was informed about the vote, instructed that the portfolio proxy votes be voted along the same lines as that favored by the senior management. Arditti herself has not studied the merits of the proposed expansion plan but has complete faith in the senior management of Eros, which has always proven to be conscientious and prudent.
Arditti has
I. violated Standard IV (B. 1) – Fiduciary Duties by voting the proxy shares in an indiscriminate manner.
II. can be held liable for failing in her duties under ERISA.
III. violated Standard II (B) – Professional Misconduct by behaving in an unprofessional manner.
Option A: I and II.
Option B: I, II and III.
Option C: I only.
Option D: II and III only.
Show/Hide Answer
Option A : I and II.
Corporate pension plan managers are governed by ERISA (Employee Retirement Security Act, 1974). One of the fiduciary duties expected under these guidelines is the voting of proxy shares. A fiduciary who fails to vote the proxy votes, votes them without analysis, or votes them blindly with the management on non-routine decisions will be in violation of ERISA. They can be held liable for trust violation unless there are explicit provisions in the plan which preclude the manager from voting. Note, however, that Arditti’s voting does not constitute professional misconduct. Standard II (B) – Professional Misconduct – and Standard IV (B. 1) – Fiduciary Duties.
Free CFA Level 1 Mock Exam Question No: 123:
Which of the following is true regarding Standard II (A)?
Option A: You must be registered for the next CFA exam in order to call yourself a candidate.
Option B: All of these answers.
Option C: Candidates may state that they have completed Level I, II, or III.
Option D: There is no designation for someone who has passed Level I, II, or III.
Option E: This standard relates to oral statements.
Option F: This standard relates to business cards and letterheads.
Show/Hide Answer
Option B : All of these answers.
Standard II (A) relates to the responsibility of AIM members and candidates to use their professional designation properly and in a non-misleading manner. A person must be registered to take the next scheduled CFA exam to be a “candidate” in the CFA program. There is no designation for someone who has passed Level I, II, or III of the CFA exam. Candidates may state, however, that they have completed Level I, II, or III. The standard applies to all related explanations or descriptions of the CFA designation, including letterheads and business cards, resumes, directory listings, printed advertising, brochures and oral statements to clients and prospects.
CFA Level 1 Free Practice Question No: 124:
Which of the following statements is correct regarding Standard II (A) – Use of Professional Designation?
Option A: Joe Martin passed Level I and Level II of the CFA exams and is scheduled for the next Level III exam. He may write “Joe Martin, CFA I.”
Option B:Joe Martin passed Level I and Level Il of the CFA exams and is scheduled for the next Level Ill exam. He may write “Joe Martin, CFA III.”
Option C: Joe Martin passed Level I and Level I of the CFA exams, but is not scheduled for the next Level III exam. He may state, “I am a CFA candidate.”
Option D: None of these statements are correct.
Show/Hide Answer
Option D : None of these statements are correct.
“Joe Martin, CFA II” and “Joe Martin, CFA III” are misrepresentations and a violation of Standard II (A). There is no designation for someone who has passed
Level I, Level II, or Level III. He may not state he is a candidate unless he is registered for the next exam.
Free CFA Practice Question No: 125:
Composite _________ measures represent the consistency of a firm’s composite performance results with respect to the individual portfolio returns within a composite.
Option A: disclosure.
Option B: fee.
Option C: dispersion.
Option D: deviation.
Option E: error.
Show/Hide Answer
Option C : dispersion.
The AIMR-PPS require that managers disclose the dispersion of portfolio returns within each composite.
CFA Level 1 Sample Question No: 126:
According to the AIMR-PPS, ______ accounting must be used Bfor fixed-income and all other securities that accrue income.
Option A: time-weighted.
Option B: LIFO.
Option C: accrual.
Option D: fixed income.
Show/Hide Answer
Option C : accrual.
Accrual accounting must be used for fixed-income and all other securities that accrue income. Accrued income must be included in the market value calculation of the denominator and the numerator. This is a requirement for calculation of returns
Free CFA Level 1 Quiz Question NO: 127:
Standard III includes which of the following?
Option A: Performance Presentation.
Option B: All of these answers.
Option C: None of these answers.
Option D: Reasonable Basis and Representations.
Option E: Disclosure of Additional Compensation Arrangements.
Option F: Use of Professional Designation.
Show/Hide Answer
Option E : Disclosure of Additional Compensation Arrangements.
Standard III deals with Obligation to Inform Employer of Code and Standards, Duty to Employer, Disclosure of Conflicts to Employer, Disclosure of Additional Compensation Arrangements and Responsibilities of Supervisors.
Free CFA Level 1 Quiz Question NO: 128:
According to The Code of Ethics, members of AIMR shall: “Use reasonable care and exercise __________.”
Option A: each and every day.
Option B: none of these answers.
Option C: independent professional judgment.
Option D: optimal diversification.
Option E: open communications with clients.
Show/Hide Answer
Option C : independent professional judgment.
According to The Code of Ethics, members of AIM shall: “Use reasonable care and exercise independent professional judgment.”
Free CFA Practice Question No: 129:
Carlos recently attended a seminar on a new technique in identifying possible relative mispricings amongst stocks. Impressed by the presentation, he used the technique to suggest that two of his biggest clients rebalance their portfolios with a heavier emphasis on the stocks the technique identified as being mispriced. While presenting this suggestion to his clients, Carlos did not mention anything about the source of the ideas used. Before recommending the changes, he did not personally check the results nor did he try to find out if there were any significant caveats or assumptions associated with the methodology. He has:
I. violated Standard II (B) – Professional Misconduct.
II. violated Standard II (C) – Prohibition against Plagiarism.
Ill. violated Standard IV (A. 1) – Reasonable Basis & Representations.
I. violated Standard IV (B. 1) – Fiduciary Duties.
Option A: I, II and III.
Option B: I and III only.
Option C: I, II, III and IV.
Option D: II and III only.
Show/Hide Answer
Option D : II and III only.
By not mentioning the sources of the results used, Carlos violated AIM Standard II (C) related to Plagiarism. By not exercising reasonable care in verifying the soundness of his recommendations, he violated Standard IV (A. 1). However, Standard II (B) – Professional Misconduct – and Standard IV (B. 1) – Fiduciary duties are not directly relevant to this situation.
CFA Mock Exam Free Question No: 130:
Tiarera has just landed a big account for her fund and is in a joyous mood. To celebrate, she decides to go out to a bar with some of her friends and share some drinks. Tiarera, however, has a weak constitution and cannot handle alcohol very well. In fact, many times in the past, she has gotten into drunken altercations at bars. Tonight turns out to be no different; Tiarera and her friends are arrested for disorderly conduct and convicted for misdemeanor. Tiarera has
Option A: has violated Standard II (B) – Professional Misconduct – because of a pattern of misconduct.
Option B: not violated any AIM standard since the arrest was for a misdemeanor, an offense not serious enough to trigger sanctions on the first occurrence.
Option C: has violated Standard II (B) – Professional Misconduct – because she has been involved in a misdemeanor.
Option D: not violated any AIM standard since the arrest took place due to activities not related to her work.
Show/Hide Answer
Option A : has violated Standard II (B) – Professional Misconduct – because of a pattern of misconduct.
A single instance of misdemeanor is generally not serious enough to constitute a violation of Standard II (B). However, Tiarera has shown a pattern of professional misconduct that reflects poorly on her firm and her profession, thus violating the AIMR standard.
