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 23 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: 221:
What is the effective date for compliance with the AIMR -Performance Presentation Standards for discretionary fee-paying portfolios meeting the definition of a wrap-fee account?
Option A : January 1, 1997.
Option B : July 1, 1994.
Option C : July 1, 1995.
Option D : January 1, 1995.
Option C : July 1, 1995.
From July 1, 1995, going forward, all of the firm’s actual discretionary fee-paying portfolios meeting the definition of a wrap -fee account must be presented in composites that adhere to the Standards.
CFA Level 1 Exam Question No: 222:
Connery, a smart professional, passed his Level II CFA exam 2 years ago. He could not take the Level III exam due to professional time commitments elsewhere.
He is thinking of taking Level Ill a couple of years from now, once things settle down on his personal front. His resume, which he has sent to a few prestigious firms, states that he is a candidate in the CFA program and has successfully completed Level I exam. He makes no exaggerated claims about his abilities on his resume. Connery has:
Option A: violated Standard II (A) – Use of Professional Designation. He cannot claim to be CFA – Level II.
Option B: not violated any standards.
Option C: violated Standard II (A) – Use of Professional Designation. He cannot claim to be in the CFA program since he is not registered to take Level III exam.
Option D: violated Standard II (A) – Use of Professional Designation. He cannot claim to be in the CFA program without having completed the Level III exam.
Option C : violated Standard II (A) – Use of Professional Designation. He cannot claim to be in the CFA program since he is not registered to take Level III exam.
Standard II (A) – Use of Professional Designation, states that a person must be registered to take the next higher level of the exam to be a “candidate” in the CFA program.
Free CFA Level 1 Mock Exam Question No: 223:
Standard IV (B.4) deals with ___________.
Option A: Disclosure of Conflicts to Clients and Prospects.
Option B: Prohibition against Misrepresentation.
Option C: None of these answers.
Option D: Disclosure of Referral Fees.
Option E: Priority of Transactions.
Option F: Prohibition against Use of Material Nonpublic Information.
Option G: Preservation of Confidentiality.
Option H: Performance Presentation.
Option E : Priority of Transactions.
Standard IV (B.4) deals with the priority of transactions of clients and employers over transactions in investments in which the member is the beneficial owner.
CFA Level 1 Free Practice Question No: 224:
Which of the following is NOT one of the goals of AIMR-PPS?
Option A: Enforce a single standard on the various performance presentations through a mandatory adoption of the PPS.
Option B: None of these answers.
Option C: Bolster the notion of self-regulation and enhance the professionalism in the industry.
Option D: Improve the service offered to investment management clients.
Option A : Enforce a single standard on the various performance presentations through a mandatory adoption of the PPS.
The PPS are voluntary standards and are not necessarily binding on AIMR members. AIM, of course, encourages adoption of these standards. The Standards have been designed to meet the following four goals: – achieve greater uniformity and compatibility amongst the various performance presentations; – improve the service offered to investment management clients; – enhance the professionalism in the industry; – bolster the notion of self-regulation.
Free CFA Practice Question No: 225:
In allowing a claim of being in compliance with the PPs. AIMR requires that the compliance be on a “firmwide” basis. Which of the following does not qualify as “a firm” in this requirement?
Option A: A subset of assets managed in one or more base currencies.
Option B: An entity registered with the appropriate regulatory authority.
Option C: A subsidiary or a division of a parent organization.
Option D: None of these answers.
Option A : A subset of assets managed in one or more base currencies.
The entire subset of a firm’s assets which are managed in one or more bases currencies must be included in the definition of “a firm” as far as PPS is concerned. For example, an organization cannot claim a proper subset of the assets it manages in Netherlands as “a firm” and claim compliance for that subset. It must include the entire portfolio managed in the Netherlands Guilders.
CFA Level 1 Sample Question No: 226:
According to the Prudent Investor Rule, the trustee must: – adhere to loyalty, impartiality and prudence – maintain overall portfolio risk at a reasonable level – provide for reasonable ________ of trust investments – act with prudence in deciding whether and how to delegate authority to experts and in selecting and supervising agents – be cost conscious when investing
Option A: supervision.
Option B: commitment.
Option C: diversification.
Option D: none of these answers.
Option C : diversification.
Modern Portfolio Theory dictates that trustees consider a portfolio in its entirety and not just on an investment-by-Investment basis. As a fiduciary, therefore, the trustee must: – adhere to fundamental fiduciary duties of loyalty, impartiality and prudence, – maintain overall portfolio risk at a reasonable level – the trade-off between risk and return is the fiduciary’s central concern, – provide for reasonable diversification of trust investments, – act with prudence in deciding whether and how to delegate authority to experts and in selecting and supervising agents, – be cost conscious when investing.
Free CFA Level 1 Quiz Question NO: 227:
________ measures, which relate to the total variability of actual returns (i.e. beta), indicate the risk of having returns different from that particular benchmark or index.
Option A: Index.
Option B: Absolute.
Option C: Volatility.
Option D: Risk.
Option C :
It is very important not to confuse risk with volatility. The type of risk that volatility measures represent are only one of many risks.
Free CFA Level 1 Quiz Question NO: 228:
Marmella is a corporate associate with an investment banking firm, Corpfins. She recently put together a business proposal which would allow Corpfins to take on White Papers Inc., a producer of premium printing paper, as a business client for all its underwriting needs. In this proposal, Marmella has promised that her team will provide full research coverage for White Papers, with the clause that the team will not be the first on the street to release a “sell” recommendation. Marmella has
Option A: violated Standard IV (A.3) – Independence and Objectivity.
Option B: violated Standard IV (A. 1) – Reasonable Basis and Representations.
Option C: not violated the AIM code of ethics.
Option D: violated Standard II (B) – Professional Misconduct.
Option A : violated Standard IV (A.3) – Independence and Objectivity.
By agreeing to a clause that prevents her from releasing an obiective research report under all circumstances, Marmella he violated Standard IV (A.3 – Independence and Objectivity – because not only is there an appearance of impropriety and conflict of interest, but the contract clearly hinders Marmella’s judgment.
Free CFA Practice Question No: 229:
Firms with records or performance calculations for periods prior to the effective dates for AIMR-PPS compliance can still claim compliance with the PPS using which of the following methods?
I. Restate all of its performance numbers in accordance with the standards.
I. Continue to use the non-conforming performance measures with specific disclosures about how the measures are not in compliance.
III. Use the relaxed standards of AIM designed specifically for this situation.
Option A: I, II and III.
Option B: I only.
Option C: I and II only.
Option D: I and III only.
Option A : I, II and III.
All three are acceptable ways in which firms with records or performance calculations for periods prior to the effective dates for AIMR-PPS compliance can continue to claim compliance with the PPS. This is known as “Retroactive Compliance.
CFA Mock Exam Free Question No: 230:
Which of the following is not a required disclosure for real estate investments under the Performance Presentation Standards?
Option A: amount of leverage used.
Option B: return formulas.
Option C: all of these answers.
Option D: accounting policies for capital expenditures.
Option A : amount of leverage used.
The performance presentation for real estate must disclose the return formulas and accounting policies for such items as capital expenditures, tenant improvements and leasing commissions.
There is no requirement or recommendation that the amount of leverage used be disclosed under the 1997 standards.