CFA Level 1 Practice Question Bank by AnalystPrep - Questions
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Our question bank has been developed by certified CFA charterholders with first-hand experience of the exam. We adopt the exact question structure as the actual exam.Our question bank is divided into specific topics to help you attain an all-round understanding of the curriculum. Every question is accompanied by a detailed solution.
Preparing for the CFA® Program exam also means knowing what to expect during the actual test and familiarizing yourself with the types of questions you’re likely to encounter. At AnalystPrep, we adopt the exact question structure as the actual exam. Each item consists of a stem (question, statement, and/or table) and three distracters – A, B, and C. The distracters agree grammatically with the stem. Moreover, each item is linked to one or more Learning Outcome Statements (LOSs).
Our question bank is divided into specific topics to help you attain an all-round understanding of the curriculum. Every question is accompanied by a detailed solution. In the event that you’d like some clarification on a specific concept, our instructors are reachable round the clock.
All our practice questions are adjusted regularly over time to be consistent with the current CFA® Program curriculum and difficulty level. Join the 20,000 candidates who register yearly for our free resources available only on our platform.
Performance Tracking Lets you Find your Strengths and Weaknesses
The Level I CFA exam consists of 10 topics covering a broad range of skills in a large volume of material. Testing your knowledge in each specific area by using the practice questions helps you understand where your strengths and weaknesses are. You can track your performance over time and monitor your progress with our FREE performance tracking tool.
Performance tracking is part of our complete set of analytics tools that gives you invaluable insights into your performance, including the ability to compare your result with more than 20,000 users worldwide. Adjust your study plan according to the given results and improve your performance by revising the topics that you need to master. Efficient studying begins with knowing which topics you need to put more effort into so as to maximize your chances of passing.
Ethical and Professional Standards
George Mendes is considering an employment offer made by DR Associates, an investment bank. Should Mendes accept the offer, he will be responsible for supervising twenty portfolio managers. Mendes’ only concern is that employees’ personal trades are not being adequately monitored and many of these transactions involve front-running clients’ trades.
To comply with the CFA Institute Standards of Professional Conduct, Mendes should most likely:
A) accept the offer and dismiss employees involved in front-running.
B) accept the offer and implement adequate compliance procedures.
C) decline the offer in writing until the firm adopts reasonable procedures to allow the exercise of his supervisory responsibilities.
Ethical and Professional Standards
An investment management firm has been in existence for eight years. To enhance the quality of reported performance, the firm’s senior compliance officer decides to make the firm’s presented performance compliant with the GIPS standards.
To comply with the GIPS standards, the firm is required to initially present a GIPS-compliant performance track record of:
A) one year.
B) five years.
C) eight years.
You are presented with 2 investment opportunities and must choose the one with the greater present value: A lump-sum of $2 million or an annuity with 25 payments of $250,000 a year with the first payment starting today. The interest rate is 9% per year compounded annually.
A) The annuity
B) The lump-sum
C) There’s no difference between the two options
Two hypothetical currencies – ABC and XYZ – are trading at a spot rate of 1.60 ABC/XYZ . If the interest rate in ABC and XYZ’s countries are 7% and 5%, respectively, the arbitrage-free forward rate ABC/YXZ is closest to:
Financial Reporting and Analysis
Galactic Hyper is a chain of hypermarkets which sells most of its products for cash, which is why its days of sales outstanding are as low as 22 days. Assuming that the firm’s average receivables are $234,000, and the cost of goods sold (COGS) for the 1-year period is $1,245,000, the annual sales of Galactic are closest to:
Birmingham Corporation is launching a new product with a social media marketing campaign that will cost $2,000,000. To finance the project, Birmingham’s CEO gathered the following information:
Required return on equity: 15%
If the CEO decides to issue $1,500,00 in new debt and $500,000 in common stocks, then the marginal weighted average cost of capital (WACC) is closest to:
Bruce Craig is in the business of trading steel in Chicago, which he inherited from his father one month ago. His financial adviser notes the following aspects of his situation:
– He is 24 years old;
Given the aforementioned information, which of the following statements is correct?
A) Craig has a low ability to take risk, but a high willingness to take risk.
B) Craig has a high ability to take risk, but a low willingness to take risk.
C) Craig has a high ability to take risk, but a high willingness to take risk.
Which of the following statements regarding market efficiency is least likely accurate?
A) In an efficient market, prices of stocks will slowly adjust to new information.
B) An efficient capital market reflects all of the information about its securities, including risk.
C) There are three forms of market efficiency: weak, semi-strong and strong.
A 3-year bond offers a 7% coupon rate with interests paid annually. Assuming the following sequence of spot rates, the price of the bond is closest to: