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 Level 1 Exam 7 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: 61:
ERISA fiduciaries must adhere to the following prudent procedures:
– establish a written investment policy for the plan
– diversify plan assets
– make investment decisions with the skill and care of a
– monitor investment performance
– control investment expenses
– avoid prohibited transactions
Option A : member.
Option B : supervisor.
Option C : prudent expert.
Option D : none of these answers.
Option E : trader.
Show/Hide Answer
Option C : prudent expert.
These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence. Under ERISA, the fiduciary is held to a higher standard than the Prudent Man Rule. The ERISA fiduciary needs to be as prudent as the average expert, not simply as prudent as the average person.
CFA Level 1 Exam Question No: 62:
___________ establishes the fiduciary principles for U.S. corporate pension plans.
Option A: AIMR.
Option B: PSPC.
Option C: ERISA.
Option D: WTO.
Option E: UMIFA.
Option F: None of these answers.
Option G: RELAC.
Show/Hide Answer
Option C : ERISA.
ERISA establishes the fiduciary principles for U.S. corporate pension plans. ERISA is very specific in its definition of fiduciaries and their responsibilities and investment managers of U.S. corporate pension plans are subject to ERISA’s fiduciary provisions.
Free CFA Level 1 Mock Exam Question No: 63:
Under what conditions is Standard II (B)- Professional Misconduct violated?
I. The member is convicted of a misdemeanor.
II. The member regularly engages in unprofessional but legal behavior.
III. The member engages in dishonest activities that do not result in criminal conviction.
IV. The member is convicted of a felony.
Option A: II, III & IV.
Option B: I, II & IV.
Option C: I, II, III & IV.
Option D: IV only.
Show/Hide Answer
Option A : II, III & IV.
This question pertains to Standard II (B) – Professional Misconduct. A misdemeanor conviction is only considered grounds for a violation of II (B) if it occurs repeatedly, or involves “moral turpitude (lying, cheating, stealing, or other dishonest conduct). Unprofessional and dishonest behavior or a felony conviction are violations of Standard II (B).
CFA Level 1 Free Practice Question No: 64:
Complete the following: According to The Code of Ethics, members of AIMR shall: “Act with __________ competence, dignity and in an ethical manner when dealing with the public, clients, prospects, employers, employees and fellow members.”
Option A: virtue.
Option B: none of these answers.
Option C: honorability.
Option D: integrity.
Option E: morality.
Show/Hide Answer
Option D : integrity.
According to The Code of Ethics, members of AIMR shall: “Act with integrity, competence, dignity and in an ethical manner when dealing with the public, clients, prospects, employers, employees and fellow members.
Free CFA Practice Question No: 65:
Each of the following is true regarding Standard II (A), except:
Option A: You must be registered for the next CFA exam in order to call yourself a candidate.
Option B: This standard relates to business cards and letterheads.
Option C: This standard does not relate to oral statements.
Option D: There is no designation for someone who has passed Level I, II, or III.
Option E: All of these answers.
Option F: Candidates may state that they have completed Level I, II, or III.
Show/Hide Answer
Option C : This standard does not relate to oral statements.
Standard II (A) relates to the responsibility of AIMR 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 Sample Question No: 66:
Standard _______ pertains to fair dealing with customers and clients.
Option A: III (B).
Option B: IV (B.3).
Option C: IV (A).
Option D: I (D).
Option E:None of these answers.
Show/Hide Answer
Option C : IV (A).
Standard IV (B.3 states: “Members shall deal fairly and objectively with all clients and prospects when disseminating investment recommendations, disseminating material changes in prior investment recommendations and taking investment action.”
Free CFA Level 1 Quiz Question NO: 67:
Social investments:
Option A: should never be used in pension fund investing.
Option B: in pensions must be well thought-out, making sure that such investments are legal and do not impair the integrity of the funds in questions or the financial security of the participants or beneficiaries.
Option C: none of these answers.
Option D: have yet to be used as an investment in pension funds in the U.S.
Option E : are proper investment vehicles for pensions, since they are a “public good.”
Show/Hide Answer
Option B : in pensions must be well thought-out, making sure that such investments are legal and do not impair the integrity of the funds in questions or the financial security of the participants or beneficiaries.
In a pension plan, the first and foremost duty of the fiduciary is to the plan participants and their beneficiaries rather than to the plan sponsor that has the power to hire and fire the investment manager. Consequently, if urged to make investments that might be of direct benefit to a sponsoring community or to the community at large, the manager must ensure that such investments are legal and do not impair the integrity of the funds in question or the financial security of the participants/ beneficiaries.
Free CFA Level 1 Quiz Question NO: 68:
Which of the following are considered basic characteristics of a security and must be included in research reports?
Option A: business risk.
Option B: degree of uncertainty.
Option C: annual expected income.
Option D: yield-to-maturity.
Option E: all of these answers.
Option F: both degree of liquidity and yield-to-maturity.
Option G: expected annual rate of return.
Show/Hide Answer
Option E : all of these answers.
Members should include the following information in research reports:
– expected annual rate of return
– annual amount of income expected (current and future)
– current rate of income return of yield to maturity
– degree of uncertainty associated with cash flows
– degree of marketability /liquidity
– business, financial, political, sovereign and market risks
Free CFA Practice Question No: 69:
Fundamental Responsibilities is dealt with under:
Option A: Standard I.
Option B: Standard III.
Option C: None of these answers.
Option D: Standard V.
Option E: Standard II.
Option E: Standard IV.
Show/Hide Answer
Option A : Standard I.
Fundamental Responsibilities is dealt with under Standard I.
CFA Mock Exam Free Question No: 70:
Maria Golino is a financially savvy client of Hector Gomez, a portfolio manager with a small investment firm. Maria recently directed Hector to execute all trades on her behalf with Omega Brokerage. Omega charges higher commissions than most other brokerage firms but in this case, has agreed to provide research to Hector on behalf of Maria. Hector does not object to this and starts directing Maria’s trades to Omega. Hector has
Option A: violated Standard IV (B. 1) – Fiduciary Duties.
Option B: violated Standard IV (A.2) – Research Reports.
Option C: violated Standard IV (B.8) – Disclosure of Referral Fees.
Option D: not violated any standards.
Show/Hide Answer
Option D : not violated any standards.
The practice in which a portfolio manager directs trades to a particular brokerage in exchange for additional goods or services at the behest of the client is known as “directed brokerage.” This practice is not in violation of any AIM standards since the portfolio manager is acting on the instructions of his client and the benefits accrue to the client. Standard IV (B. 1) – Fiduciary Duties and the Topical Study “Fiduciary Duty.”
