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 22 = 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.
