CFA Level 1 Mock Exam PDF

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CFA Level 1 Practice Questions With Answers PDF Free Download

CFA level 1

(1). George, a CFA candidate, works in the City. At a firm luncheon he meets Raoul, one of his colleagues from his previous work and a CFA charterholder. Raoul asks George whether he heard that Cloud Airlines are about to declare its insolvency next week.According to the Code and Standards, George:

  • a. must wait till the next week before he uses the information.
  • b. must not use the information as he has no reasonable basis to use it.
  • c. is permitted to use the information but only for the benefit of his clients and not his own.

(2). JJ & Brothers is a family business run by brothers holding the CFA designation. Erik, one of the brothers working on a high managerial position, tells Samantha Fey, the employee of JJ & Brothers and a CFA candidate, to carry out one of some major transactions “the old way”.

If Samantha does as she is told, she will disregard the current change in law that has just been introduced.

When she said that to Erik, he replied that she will most certainly “find the way”, and besides it’s been just a couple of days since the new regulation is in force and not everybody knows it should apply.

She decides to consult Johannes, the senior brother, about the matter.

Johannes tells Samantha, to her greatest disappointment, that “Erik is the one to decide about all this”. What should Samantha do in this situation?

  • a. Samantha should dissociate from the activity and even consider handing in her resignation in order to comply with Standard I (A).
  • b. Samantha should carry out the transaction the way her employer wants her to, but she should keep it secret so as not to violate Standard I (A).
  • c. Samantha should act the way her employer wants her to because if she does not she will violate Standard IV (A) by not being loyal to her supervisor.

(3). An investor wants to deposit $435 000 in a bank account. The bank pays a stated annual rate of 15 percent. What is the effective annual rate using continuous compounding?

  • a. 15.00 percent
  • b. 16.08 percent
  • c. 16.18 percent

Assume that a stock’s price at the end of the next two periods is as shown below:
Period 0 1 2
Stock prices
100 120 144
83.33 100

The probability that the stock’s prices will go down in a given period is 50%. What is the probability that the stock’s price at the end of the second period will be the same as today (period 0)?

a. 25%
b. 50%
c. 75%

The nominal GDP is equal to $55,240,000 and the real GDP is equal to $52,040,000. The GDP deflator is closest to:

a. 94
b. 100
c. 106

Which of the following statements regarding market structures is the least accurate?

a. Under imperfect competition, total revenue is a linear function of quantity.
b. Under imperfect competition, the marginal revenue line is below the price line.
c. Under imperfect competition, the marginal revenue line is below the average revenue line.

The price of the stock is $45. The European call option with the exercise price $42 and a time to expiration 1 year is priced $6. The annual risk-free rate is equal to 5 percent. Based on put-call parity, the price of the European put option with the exercise price $42 and the time to expiration 1 year is closest to:

a. $1.0

b. $3.0

c. $5.1

A dealer quotes a forward rate agreement (FRA) based on 90-day LIBOR at 3.8%. An investor goes long for the contract and the dealer goes short. The notional principal of the contract is $2 million. At expiration the 90-day LIBOR is 4.3%. The investor is most likely to:

a. pay the dealer $1,237.
b. receive from the dealer $1,237.
c. receive from the dealer $2,473.

Language English
No. of Pages12
PDF Size2 MB

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CFA Level 1 Mock Exam Practice Questions With Answers PDF Free Download

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