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 Practice Test 28 Questions Level 1 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: 271:
Standard III (D), Disclosure of Additional Compensation Arrangements is important because
Option A : outside arrangements may affect loyalties and objectivity and create potential conflicts of interest.
Option B : none of these answers.
Option C : outside arrangements are not allowed under circumstances.
Option D : third parties are inherently in competition with the current employer.
Option E : the verbal disclosure requirement allows for “compensation in kind.”
Option F : all of these answers.
Show/Hide Answer
Option A : outside arrangements may affect loyalties and objectivity and create potential conflicts of interest.
Under Standard III (D), members must disclose outside compensation /benefits to employers because outside arrangements may affect loyalties and objectivity and create potential conflicts of interest.
Disclosure thus allows an employer to consider the outside arrangements when evaluating the actions and motivations of
members. Moreover, the employer is entitled to have full knowledge of compensation/benefit arrangements to assess the true cost of the outside services members are providing.
CFA Level 1 Exam Question No: 272:
Which of the following is/are required by AIMR-PPS with regards to creation and maintenance of composites?
I. All actual fee-paying discretionary portfolios must be segregated into one or more composites based on similar investment strategies.
II. Portfolios must not be switched from one composite to another unless documented changes in client guidelines make the switching appropriate.
III. Composites must include all terminated portfolios while calculating performance for periods prior to the termination.
Option A: II ONLY.
Option B: I, II, and III.
Option C: I and II only.
Option D: II and III only.
Show/Hide Answer
Option D : II and III only.
All actual fee-paying discretionary portfolios must be included in at least one composite based on similar investment strategy. Segregation of these accounts is not required. (II) and (III) are true.
Free CFA Level 1 Mock Exam Question No: 273:
Standard II (B) – Professional Misconduct, states which of the following is a violation?
Option A: Adding inappropriate expenses to expense reports over an extended period, although never criminally convicted.
Option B: Using material prepared by another, in the same form as the original, without acknowledging and identifying the author, publisher or source of such material.
Option C: All of these answers.
Option D: Intoxication at work, which reflects poorly on the profession, raises questions about competence and affects investment decisions.
Show/Hide Answer
Option D : Intoxication at work, which reflects poorly on the profession, raises questions about competence and affects investment decisions.
Standard II (B) addresses personal integrity and prohibits individual behavior that reflects adversely on the entire profession. Intoxicated behavior falls under Standard II (B) because it reflects poorly on the member, his employer and the investment industry. Plagiarizing of material falls under Standard II (C) – Prohibition against Plagiarism.
CFA Level 1 Free Practice Question No: 274:
Which of the following is/are required by AIMR-PPS with regards to creation and maintenance of composites?
I. Performance must be measured at least quarterly.
II. Combining of assets-only returns with assets-plus-cash returns is prohibited.
III. Convertible and hybrid securities cannot be mixed with money-market securities in performance calculations.
Option A: I and III only.
Option B: I, II and III.
Option C: I only.
Option D: I and II only.
Show/Hide Answer
Option A :
Section A – “Creation and Maintenance of Composites” – of the PPS requires that convertible and hybrid securities be treated consistently across all composites.
Free CFA Practice Question No: 275:
A(n) ___________ is someone who has knowledge of pending or actual investment recommendations or action..
Option A: covered person.
Option B: none of these answers.
Option C: AIMR member.
Option D: insider.
Show/Hide Answer
Option A : covered person.
Access or covered persons have knowledge of pending or actual investment recommendations or action. The firm’s definition of access (covered) person should be broad enough to cover all people with that knowledge.
CFA Level 1 Sample Question No: 276:
Neeson Pacino is the senior vice president in the corporate finance arm of Hindenberry Brokerage. Neeson was recently approached by Curare Creators, a pesticide manufacturer. Curare would like to offer new equity to raise capital and has provided Neeson with its current balance sheet and details about the pending projects. Neeson carefully goes over the numbers with a couple of project manager sat Curare and also two of his analysts at Hindenberry. He concludes from these discussions that the numbers presented by Curare are overly optimistic. The revised numbers would seriously lower the offering price. Not relishing this prospect, Neeson decides to go ahead with the numbers as drawn up by Curare and directs the department to prepare the IPO with the offering price. Neeson has
Option A: violated Standard IV (A.1) – Reasonable Basis & representations.
Option B: violated Standard IV (B.3) – Fair Dealing.
Option C: violated Standard IV (B.1) – Fiduciary Duties.
Option D: violated Standard II (B) – Duty to the Employer.
Show/Hide Answer
Option C :
By knowingly misrepresenting the situation, Neeson has allowed the possibility that investors would end up paying more than the fair price in the seasoned equity offering. He has thus violated Standard IV (A.1) – Reasonable Basis & Representations.
Free CFA Level 1 Quiz Question NO: 277:
Information is if its disclosure would be likely to have an impact on the price of a security or if reasonable investors would
want to know the information before making an investment decision.
Option A: inside information.
Option B: none of these answers.
Option C: breached.
Option D: breached.
Option E: material.
Option F: tipable.
Show/Hide Answer
Option A : inside information.
According to Standard V (A), information is “material” if it would Significantly alter the total mix of information currently available regarding a security.
Free CFA Level 1 Quiz Question NO: 278:
Amartya is currently managing the investment fund for a charitable institution and has his fiduciary duties bound by the UMIFA (Uniform Management of Institutional Funds) rules. His colleague, Bhagwati, is a trustee of a personal trust fund
set up by the late R. D. Tata, a famous industrialist. Which of the following is/are true about the situation?
I. Amartya’s behavior as a trustee is governed by the “Prudent Man Rule.”
II. Bhagwati is held to a standard of ordinary business care.
III. In general, Amartya is held to a lower standard of professional conduct than Bhagwati.
Option A: III only.
Option B: I and II only.
Option C: I, II and III.
Option D: I only.
Show/Hide Answer
Option A : III only.
In the US, the investment actions of personal trust fiduciaries is governed by the “Prudent Man Rule,” which requires an exercise of care and judgment which people of “prudence, character and intelligence” would use in the management of their personal investment affairs. On the other hand, trustees of charitable funds, when governed by UMIFA, are held to the standard of ordinary business care. This standard is comparable to that which applies to someone of the rank of a director in a business corporation and is not as strict as the Prudent Man Rule. Therefore, Amartya, as a UMIFA fiduciary, is held to a lower standard than Bhagwati. Standard IV (B.1) – Fiduciary Duties – and the Topical Study “Fiduciary Duty.”
Free CFA Practice Question No: 279:
Regarding beneficiaries and remaindermen, current life-income beneficiaries prefer to receive ________ ; remaindermen would rather have _________.
Option A: a minimal current income; a high rate of current income.
Option B: small incremental principal repayments; predictable current income.
Option C: none of these answers.
Option D: growth and stability of principal; a high rate of current income.
Show/Hide Answer
Option C : none of these answers.
None of these choices is the correct answer. Current life-income beneficiaries prefer to receive high rate of current income, while remaindermen would rather have growth and stability of principal.
CFA Mock Exam Free Question No: 280:
Under Standard III (E) – Responsibilities of Supervisors – which of the following are NOT responsible for maintaining appropriate supervision when they are in a supervisory role?
Option A: AIMR members.
Option B: CFA charterholders.
Option C: None of these answers.
Option D: Level | CFA candidates.
Option E: CFA candidates.
Show/Hide Answer
Option C : None of these answers.
Standard III (E) states the responsibility of AIMR members, CFA charterholders and candidates for the CFA designation to take steps to prevent persons acting under their supervision from violating the law or the Code and Standards.
