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 21 Questions CFA Mock Exam 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: 201:
Hercules Poirot has just received the AIM letter, informing him that he has passed the Level III exam in the CFA program. He changes his resume to reflect this information. The header now says, “Hercules Poirot, CFA,” the “CFA” written in a smaller font. With respect to Standard II (A) – Use of Professional Designation – if Hercules circulates this resume, he will:
Option A : have violated Standard II (A). He cannot use the CFA designation till AIMR informs him that he has earned the charter.
Option B : have violated Standard II (A). He cannot put the CFA designation on his business card immediately after his name.
Option C : have violated Standard II (A). He cannot claim to be a CFA till he obtains the final diploma from AIMR.
Option D : not have violated Standard II (A).
Show/Hide Answer
Option A : have violated Standard II (A). He cannot use the CFA designation till AIMR informs him that he has earned the charter.
A candidate earns a CFA charter only after he has passed all 3 exams and has accumulated sufficient professional experience to satisfy the requirements of the program. Till the ICFA Board approves his candidacy, Hercules cannot use the designation,
‘CFA.”
CFA Level 1 Exam Question No: 202:
Sanctions that AIM may impose on its members include:
I. Revocation of the member’s registration as an investment advisor.
II. Private censure.
III. A monetary fine.
IV. Suspension of membership.
Option A: II and IV only.
Option B: I and III only.
Option C: II, III and IV only.
Option D: I, II, III and IV.
Show/Hide Answer
Option A : II and IV only.
The question deals with the disciplinary sanctions available to AIMR’s PCP. The PCP can suspend membership or impose a private censure on members for violating the Code and Standards. However, AIMR häs no authority to revoke a member registration as an investment advisor, or to impose a monetary fine.
Free CFA Level 1 Mock Exam Question No: 203:
When formulating an investment policy for a client, which of the following falls under the category “client identification?”
Option A: risk tolerance.
Option B: none of these answers.
Option C: type and nature of clients.
Option D: expected cash flows.
Option E: investable funds.
Show/Hide Answer
Option C : type and nature of clients.
“Client identification” requires that the type and nature of clients be considered. Risk tolerance is considered under “investor objectives.” Investable funds and expected cash flows are considered under “investor constraints.”
CFA Level 1 Free Practice Question No: 204:
Standard IV (B. 1) clearly states that _______ owe undivided loyalty to their clients and must place client interests before their own.
Option A: AIMR members.
Option B: supervisors.
Option C: none of these answers.
Option D: fiduciaries.
Option E: analysts.
Show/Hide Answer
Option D : fiduciaries.
Standard IV (B.1) – Fiduciary Duties states that “In relationships with clients, members shall use particular care in determining fiduciary duty and must act for the benefit of their clients and place their clients’ interests before their own.” “Fiduciaries” is the best answer.
Free CFA Practice Question No: 205:
The primary beneficiaries of the AIMR-PPS are:
Option A: current & prospective clients.
Option B: AIMR members.
Option C: all investment professionals.
Option D: investment firms who adopt the standards.
Show/Hide Answer
Option A : current & prospective clients.
Since the PPS strive to achieve greater uniformity and compatibility amongst the various performance presentations, clients who wish to compare investment results across various firms benefit the most. Note, however, the mere compliance of € firm with the PPS does not mean that clients should not perform due diligence before making investment decisions.
CFA Level 1 Sample Question No: 206:
NL is a country with no securities laws. LS is a country that has securities laws that are less strict than the AIMR code of ethics while MS has securities laws that are stricter than the code of ethics. A securities trader lives in MS but conducts his business in LS. His behavior is governed by MS laws. However, the MS law states that the applicable business laws are the local laws where the business is conducted. In that case, the trader must adhere to:
Option A: LS business laws.
Option B: AIMR code.
Option C: MS business laws.
Option D: a combination of MS and LS business law.
Show/Hide Answer
Option B : AIMR code.
An AIMR member must always adhere to the code of ethics, unless the laws governing his/her behavior are stricter, in which case, the stricter laws must be followed. In this case, since the LS law applies to the trader’s business behavior, the trader must follow the stricter AIM code of conduct.
Free CFA Level 1 Quiz Question NO: 207:
Standard III (B) is ______.
Option A: None of these answers.
Option B: Disclosure of Additional Compensation Arrangements.
Option C: Responsibilities of Supervisors.
Option D: Disclosure of Conflicts to Employer.
Option E: Obligation to Inform Employer of Code and Standards.
Option F: Duty to Employer.
Show/Hide Answer
Option F : Duty to Employer.
Standard III (A) deals with the Obligation to Inform Employer of Code and Standards. Standard III (B) deals with the Duty to Employer. Standard III (C) deals with Disclosure of Conflicts to Employer. Standard III (D) deals with Disclosure of Additional Compensation Arrangements. Standard III (E) deals with Responsibilities of Supervisors.
Free CFA Level 1 Quiz Question NO: 208:
Which of the following can be found in Standard III?
Option A: Members shall make reasonable efforts to achieve public dissemination of material nonpublic information disclosed in breach of a duty.
Option B: Members shall maintain knowledge of and comply with all applicable laws.
Option C: Members shall maintain appropriate records to support the reasonableness of recommendations.
Option D: Members shall not participate in plagiarism.
Option E: Members shall not undertake any independent practice in competition with employer without written consent.
Show/Hide Answer
Option E : Members shall not undertake any independent practice in competition with employer without written consent.
Standard III states: “Members shall not undertake any independent practice that could result in compensation or other benefit in competition with their employer without written consent from both the employer and the person for whom they undertake independent practice.”
Free CFA Practice Question No: 209:
When complying with Standard IV (B.3) – Fair Dealing, there are certain points one should be sure to address when establishing compliance procedures.
Which of the following points is NOT mentioned in the Standards of Practice
Handbook?
Option A: Disclose levels of service.
Option B: Limit the number of people involved.
Option C: Shorten the time frame between decision and dissemination.
Option D: Establish procedures for determining material change.
Option E: Simultaneous dissemination.
Option F: Disclose all corporate relationships.
Option G: Publish personnel guidelines for predissemination.
Option H: Establish control over trading activity.
Show/Hide Answer
Option F : Disclose all corporate relationships.
Under Standard IV (B.3), members have an obligation to ensure that their firms establish compliance procedures requiring all employees who disseminate investment recommendations or actions to treat clients fairly. The number of people privy to an investment recommendation should be limited. Reasonable efforts should be made to limit the amount of time that lapses between the decision and the dissemination of the recommendation. Guidelines must be established to prohibit persons who have prior knowledge from discussing a pending recommendation.
Trading activities should be monitored and controlled. Procedures should be established to determine whether a change in an investment recommendation is considered material. The organization should disclose to firms whether or not it offers two or more levels of service to clients for the same or different fees.
CFA Mock Exam Free Question No: 210:
Standard III (C) deals with
Option A: None of these answers.
Option B: Plagiarism.
Option C: Obligation to Inform Employer of Code and Standards.
Option D: Use of Professional Designation.
Option E: Disclosure of Conflicts to Employer.
Option F: Fundamental Responsibilities.
Option G: Duty to Employer.
Option H: Professional Misconduct.
Show/Hide Answer
Option E : Disclosure of Conflicts to Employer.
Standard | deals with Fundamental Responsibilities. Standard II (A) deals with Use of Professional Designation. Standard II (B) deals with Professional Misconduct. Standard II (C) deals with Plagiarism. Standard III (A) deals with the Obligation to Inform Employer of Codes and Standards. Standard III (B) deals with the Duty to Employer. Standard III (C) deals with Disclosure of Conflicts to Employer.
