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 Practice Test 25 Questions 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: 241:
If the senior members of an investment advisory firm are unwilling to disseminate negative information about a firm, the advisory should
Option A : none of these answers.
Option B : refrain from making an investment recommendation citing proprietary reasons.
Option C : disseminate only factual information about the firm and refrain from making any research comments.
Option D : release the report without the negative information.
Show/Hide Answer
Option C : disseminate only factual information about the firm and refrain from making any research comments.
*Procedures for Compliance,” Standard IV (A.3)
CFA Level 1 Exam Question No: 242:
According to the AIMR-PPS, account portfolios must be grouped into composites
Option A: based on similar investment strategy or objective.
Option B: all of these answers are correct.
Option C: based on the date the portfolios were initiated.
Option D: based on the individual account manager’s clientele.
Show/Hide Answer
Option A : based on similar investment strategy or objective.
For the defined firm, all fee-paying accounts with investment discretion must be included in one or more composites. The account portfolios must be grouped into composites based on similar investment strategy or objective. Compliance cannot be met on a per composite or per product basis but can only be met on a firmwide basis.
Free CFA Level 1 Mock Exam Question No: 243:
Level _______ verification applies to specific composites.
Option A: II.
Option B: III.
Option C: I
Option D: 0
Option E: IV
Show/Hide Answer
Option A : II.
Level I verification applies to all firm composites. Level I verification requires a Level I verification at least on the speci composites being verified at Level II. (Note: There are only two levels of verification.)
CFA Level 1 Free Practice Question No: 244:
Which of the following AIMR Standards maintains that the financial analyst must preserve the confidentiality of information communicated to him by the client?
Option A: IV (A).
Option B: None of these answers.
Option C: II (B).
Option D: III (C).
Show/Hide Answer
Option B : None of these answers.
Standard IV (B.5) – Preservation of Confidentiality states:
“Members shall preserve the confidentiality of information communicated by clients, prospects, or employers concerning matters within the scope of the client-member, prospect-member, or employer-member relationship unless the member receives information concerning illegal activities on the part of the client, prospect, or employer.
Free CFA Practice Question No: 245:
3 months ago, Fred Hoyle received the AIMR letter, informing him that he had passed Level II exam. He has now registered for Level III exam. Fred can do which of the following?
I. Put “CFA-Il” on his business card, as long as it is in a smaller font than his name.
II. Mention on his resume that he has passed Level II exam of the CFA program.
III. Mention that he is a Level III candidate in the CFA program.
IV. Inform his clients of his professional progress and assure them of his quality as an analyst.
Option A: I, II and III only.
Option B: II and IV only.
Option C: I, II and IV only.
Option D: II and III only.
Show/Hide Answer
Option D : II and III only.
Standard II(A)
CFA Level 1 Sample Question No: 246:
Young, a portfolio manager with Northside bank, has Just been given investment authority for a newly acquired pension account. Client objectives have not yet been established. On the day the account is received, $2 million in bonds, representing 4 percent of the portfolio, mature. Which of the following is Young’s best course of action on that day?
Option A: Invest the proceeds in cash equivalents until a meeting can be arranged to establish fund objectives.
Option B: Contact the client’s former investment advisor and take investment action based on previously used guidelines.
Option C: Invest the proceeds in accordance with the bank’s current asset allocation strategy.
Option D: Make no decision until client objectives have been established.
Show/Hide Answer
Option A : Invest the proceeds in cash equivalents until a meeting can be arranged to establish fund objectives.
This question relates to Standard IV (B.2), Portfolio Investment Recommendations and Actions. This standard requires that members make a reasonable inquiry into a client’s financial situation, investment experience and investment objectives prior to making any investment recommendation. To rely on outdated investment guidelines, or firmwide strategies, or to hold the funds, would be inappropriate because it might violate a member’s duty to safeguard client’s interests.
The best course of action is to invest in cash equivalents until a meeting can be arranged to establish fund objectives, because it adequately protects the client’s interest until investment objectives are established.
Free CFA Level 1 Quiz Question NO: 247:
When formulating an investment policy for a client, all of the following fall under “investor constraints.” except _____.
Option A: expected cash flows.
Option B: type and nature of clients.
Option C: regulatory and legal circumstances.
Option D: investor preferences, circumstances and unique needs.
Option E: liquidity needs.
Option F: none of these answers.
Option G: proxy voting.
Option H: investable funds.
Show/Hide Answer
Option B : type and nature of clients.
Type and nature of clients is considered under the “client identification” category.
Free CFA Level 1 Quiz Question NO: 248:
What is the name of the act enacted in 1940 that reflects a Congressional recognition of the “delicate” fiduciary nature of an investment advisory relationship and the intent to eliminate, or at least to expose all conflicts of interest?
Option A: The Investment Company Act.
Option B: The Congressional Investor’s Protection Act.
Option C: The U.S. Investment Advisers Act.
Option D: The U.S. Fiduciary-Investor Act.
Show/Hide Answer
Option C : The U.S. Investment Advisers Act.
The U.S. Investment Advisers Act of 1940 (Advisers Act) states “that advisors cannot employ any device or scheme to defraud any client or prospective client; engage in any transaction or course of business that may operate as a fraud or deceit upon any client or prospective client; engage in transactions as a principle or as an agent in a client’s account without first disclosing the transaction to the client and receiving the client’s consent; or engage in any act or course of business that is fraudulent, deceptive, or manipulative.
Free CFA Practice Question No: 249:
Performance results for a portfolio need to be presented with cash, ________ equivalents, or substitute assets.
Option A: multiple.
Option B: composite.
Option C: average.
Option D: cash.
Show/Hide Answer
Option D : cash.
Returns from cash and cash equivalents held in portfolios must included in return calculations and the cash and cash equivaler must be included in the portfolio amount (total assets) on which the return is calculated.
CFA Mock Exam Free Question No: 250:
Anamese Barrytone is a broker with Caledonia Investments. Caledonia also provides investment recommendations through its weekly letter. In its last letter released 3 days ago, Caledonia changed its investment recommendation on Sell-Me-Now, Inc. from “hold” to “sell.” Anamese has just received a call from Sloan who wants to place a market-buy order on 600 shares of Sell-Me-Now. Anamese should
Option A: not execute the order since her firm has placed the stock on the sell list.
Option B: inform her supervisor about the order and then decide if the order should be executed.
Option C: execute the order as is without trying to change Sloan’s mind by telling him about Caledonia’s recommendation since she is required to be a neutral broker by SEC rules.
Option D: inform Sloan about the change in Caledonia’s recommendation before executing the order.
Show/Hide Answer
Option D : inform Sloan about the change in Caledonia’s recommendation before executing the order.
According to the SEC rules, if a person places an order contrary to current firm recommendation, he or she should first be informed about the firm’s position before accepting the order. Standard IV (B.3) – Fair Dealing.
