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 Practice Test 41 Questions CFA Mock 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: 401:**

A perpetuity of $5,000 a year is priced at $40,000. The annual discount rate is:

**Option A**: 12.5%.

**Option B**: 13.1%.

**Option C**: 11.8%.

**Option D**: 12.75%.

**Show/Hide Answer**

**Option A : 12.5%.**

If r is the discount rate, then 40,000 = 5,000/r, giving r = 12.5%.

**CFA Level 1 Exam Question No: 402:**

The formula for conditional probability is given by:

**Option A**: P(A | B) = P(AB) / P(B).

**Option B**: P(A | B) = P(AB) / P(A).

**Option C**: P(A | B) = P(AB) * P(A).

**Option D**: P(A | B) = P(AB) * P(B).

**Show/Hide Answer**

**Option A : P(A | B) = P(AB) / P(B).**

A conditional probability takes the form of P(A | B) = P(AB) / P(B),

where P(B) does not equal 0. Note that this is just a rearranged form of the formula for joint probability.

**Free CFA Level 1 Mock Exam Question No: 403:**

The closing prices of a common stock have been 61 1/2, 62, 61 1/4, 60 7/8, and 61 1/2 for the past week. What is the range?

**Option A**: None of these answers.

**Option B**: $1.750.

**Option C**: $1.875.

**Option D**: $1.250.

**Option E**: $1.125.

**Show/Hide Answer**

**Option E : **

62 – 60.875 = 1.125.

**CFA Level 1 Free Practice Question No: 4:**

An empirical finance professor estimates the following regression between the return on a stock, R, and the return on S&P 500 index,

Rsp:

R = 5% + 1.1 Rsp + error term –

If the regression R-square is 0.25, estimate the change in the return the stock when the return on the S&P 500 index changes from 12% to 15%.

**Option A**: 19.5%.

**Option B**: 8.8%.

**Option C**: 18.2%.

**Option D**: 3.3%.

**Show/Hide Answer**

**Option D : 3.3%.**

With the given regression, the change in the return on the stook when the return on the S&P 500 index change by one unit equals the slope coefficient, 1.1. Hence, when the return on the S&P 500 Index changes by 3% from 12% te 15%, the return on the stock will change by 1.1*3% = 3.3%.

**Free CFA Practice Question No: 405:**

The lengths of time (in minutes) several underwriters took to review applications for similar insurance coverage are: 50, 230, 52 and 57. What is the median length of time required to review an application?

**Option A**: 141.0.

**Option B**: 54.5.

**Option C**: None of these answers.

**Option D**: 109.0.

**Option E**: 97.25.

**Show/Hide Answer**

**Option B : 54.5.**

Order the numbers: 50,52,57,230. The median is (52 + 57)/2 = 54.5.

**CFA Mock Exam Free Question No: 406:**

A statistician has framed his hypothesis testing problem as:

Ho: mean = 0H1: mean > 0 –

For the given sample, he calculates the z-statistic. Then, the region of rejection at the 99% level is given by:

**Option A**: z-statistic > +2.32.

**Option B**: z-statistic < 1.96.

**Option C**: z-statistic < -2.32 or z-statistic > +2.32.

**Option D**: z-statistic > +1.96.

**Show/Hide Answer**

**Option A : z-statistic > +2.32.**

Since the alternative is directional and to the right, we use a right-tailed test. For this, the critical value at 99% level is +2.32. +2.32 is the value above which only 1% of the probability mass of the standard normal distribution lies). The rejection region is then given by z-statistic > +2.32.

**CFA Level 1 Sample Question No: 407:**

The coefficient of variation of a distribution X is twice that of Y. If X and Y have the same means, the variance of Y is:

**Option A**: half that of X.

**Option B**: twice that of X.

**Option C**: none of these answers.

**Option D**: same as that of X.

**Show/Hide Answer**

**Option C : none of these answers.**

The coefficient of variation equals the standard deviation divided by mean. Since X and Y have the same mean, X must have a standard deviation which is twice that of Y for its coefficient of variation to be twice that of Y. Then, the variance of X is 2^{2} = 4 times that of Y.

**Free CFA Level 1 Quiz Question NO: 408:**

If you deposit $123 into an account paying 6% per year simple interest, what is the balance in your account 8 months later?

**Option A**: $182.04.

**Option B**: $246.00.

**Option C**: $123.92.

**Option D**: $127.92.

**Option E**: $131.51.

**Show/Hide Answer**

**Option D : $127.92.**

Calculate the simple interest earned and add it to the original deposit. On the BAII Plus, press 123 × 0.06 × 8 divide 12 = + 123 = to see the answer. On the HP12C, press 123 ENTER 0.06 x 8 x 12 divide 123 + to see the answer.

**Free CFA Level 1 Quiz Question NO: 409:**

Suppose you were given $10,000 today and deposited it into an account paying 10% per year, compounded monthly. If you know that you will need $5,000 in the account 5 years from now, what monthly withdrawal can you make from the account, beginning one month from now, that will leave the account with exactly $5,000 in it in 5 years?

**Option A**: $147.90.

**Option B**: $83.33.

**Option C**: $1,066.81.

**Option D**: $140.04.

**Option E**: $1,001.65.

**Show/Hide Answer**

**Option A : $147.90.**

On the BAll Plus, press 60 N, 10 divide 12 = I/Y, 10000 PV, 5000

+/- FV, CPT PMT. On the H12C, press 60 n, 10 ENTER 12 divide I, 10000 PV, 5000 CHS FV, PMT. Note that the answer is a negative number. This is because it is a withdrawal from the account balance, just as the $5,000 is. Make sure the BAll Plus has the value of P/Y set to 1.

**Free CFA Practice Question No: 410:**

Where does the coefficient of variation (CV) generally lie between?

**Option A**: -1 and +1.

**Option B**: -3 and +3.

**Option C**: None of these answers.

**Option D**: 0% and infinity.

**Option E**: Unlimited values.

**Show/Hide Answer**

**Option D : 0% and infinity.**

CV always lies between 0% and infinity. The larger the CV, the larger the dispersion.