CFA Institute CFA-Level-I Exam Practice Test Instant Access

Question 1

The disclosures for retroactive compliance apply to composites formulated prior to ________.

AJanuary, 1989

BJanuary, 1992

CJanuary, 1991

DJanuary, 1993

EJanuary, 1990

Answer : D

Question 2

According to Standard IV (A.2), members should consider including the following information in research reports, except:

Athe methodology that drove the investment decisions.

Byield-to-maturity.

Cannual amount of income expected.

Ddegree of uncertainty associated with the cash flows.

Ebusiness, financial, political, sovereign and market risks.

Fnone of these answers.

Gdegree of marketability / liquidity.

Hexpected annual rate of return.That answer is correct!

Answer : A

Question 3

Andy Pilling is a bond trading specialist who recently started a special fund, the "Structured Bond Fund." The strategy behind this fund is quite complex, involving a mix of highly speculative, high-yield bonds and various tax-free municipal bonds for some stability. Andy has a strong view that the economy will remain vibrant and bullish over the next two years and hence, is not worried about the risky bonds. Assuming a falling rate scenario in this case allows the fund to project an expected return 130 basis points above the S&P 500 return. In his special report, Pilling does not disclose such assumptions nor does he reveal any details about the bond strategy. He does analyze the state of the economy and the future outlook in the report. Based on his reputation and his association with some big name academics, Pilling is able to obtain capital of close to 75 million dollars on this fund alone. Andy has:

Anot violated any standards in the AIMR Code of Ethics.

Bviolated Standard IV (B.6) - Prohibition Against Misrepresentation.

Cviolated Standard IV (A.2) - Research Reports - by not revealing the assumptions and details about the strategy.

Dviolated Standard IV (B.1) - Fiduciary Duties - by not disclosing the nature of the strategy.

Answer : C

Question 4

Standard V (A) deals with ________.

AProhibition against Use of Material Nonpublic Information

BDisclosure of Conflicts to Clients and Prospects

CProhibition against Misrepresentation

DDisclosure of Referral Fees

EPerformance Presentation

FPriority of Transactions

GPreservation of ConfidentialityThat answer is correct!

Answer : A

Question 5

Edward Witten works for Princeton Investments and has registered to take Level III exam next year. He had taken the Level III exam 3 years ago but was not successful. In his firm's promotional material, he has stated that he is a candidate in the CFA program and has successfully passed Level II . Edward has:

Aviolated Standard II (A) - Use of Professional Designation. He cannot claim to be in the CFA program without having completed Level III exam.

Bviolated Standard II (A) - Use of Professional Designation. He cannot claim to be in the CFA program since he failed the Level III exam.

Cnot violated any standards.

Dviolated Standard II (A) - Use of Professional Designation. He cannot claim to be CFA - Level II .

Answer : C

Question 6

According to the AIMR-PPS, terminated portfolios are included in the composite for how long after termination?

AComposites must include terminated portfolios after the last full performance measurement period the portfolios were under management.

BComposites should include the terminated portfolio only until the date of termination.

CComposites should include the terminated portfolio for the last full performance measurement period under which the portfolios were managed.

DComposites should include the terminated portfolio for the full ten years required by the Standards for performance reporting.

Answer : C

Question 7

Standard I deals with ________.

AUse of Professional Designation

BDuty to Employer

CObligation to Inform Employer of Code and Standards

DProfessional Misconduct

EPlagiarism

FFundamental Responsibilities

GDisclosure of Conflicts to Employer

HNone of these answers

Answer : F

CFA Institute CFA-Level-I CFA Level I Chartered Financial Analyst Exam Practice Test