CFA LEVEL I PRACTICE EXAM PAPER 1 |
COMPREHENSIVE MOCK EXAM WITH VERIFIED
ANSWERS & DETAILED EXPLANATIONS | 2026
EDITION
Course Name
Chartered Financial Analyst (CFA) Level I
Level
Professional Certification
Short Introduction
This original practice examination is designed to help candidates prepare
for the CFA Level I examination by assessing foundational knowledge
across Ethics, Quantitative Methods, Economics, Financial Statement
Analysis, Corporate Issuers, Equity Investments, Fixed Income,
Derivatives, Alternative Investments, and Portfolio Management. Each
question includes the correct answer and a detailed italicised explanation
to reinforce understanding and support exam preparation.
Instructions
Answer all 40 questions.
Read each question carefully before selecting the best answer.
Each multiple-choice question has one best answer.
Complete all short-answer, application, and higher-order thinking
questions.
Review the explanations after completing the examination.
Exam Structure
, 15 Multiple Choice Questions
10 Short Answer Questions
10 Application/Scenario Questions
5 Higher-Order Thinking Questions
Total Questions: 40
SECTION A – MULTIPLE CHOICE QUESTIONS
Question 1
An investment has an initial value of $5,000 and grows to $5,750 after
one year.
What is the annual rate of return?
A. 10%
B. 12%
C. 15%
D. 17%
Answer: C
Explanation: Rate of return = (5,750 − 5,000) ÷ 5,000 = 750 ÷ 5,000 =
0.15 = 15%.
Question 2
Under the CFA Institute Code of Ethics, members and candidates should
place:
A. Personal interests before client interests.
, B. Employer interests before market integrity.
C. Client interests above their own interests.
D. Personal gain above professional duties.
Answer: C
Explanation: The CFA Institute Code of Ethics requires members and
candidates to act with integrity and place clients' interests above their
own.
Question 3
Which financial statement reports a company's assets, liabilities, and
shareholders' equity at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Answer: C
Explanation: The balance sheet presents the financial position of a
company on a specific reporting date.
Question 4
A bond's price generally moves:
A. In the same direction as market interest rates.
COMPREHENSIVE MOCK EXAM WITH VERIFIED
ANSWERS & DETAILED EXPLANATIONS | 2026
EDITION
Course Name
Chartered Financial Analyst (CFA) Level I
Level
Professional Certification
Short Introduction
This original practice examination is designed to help candidates prepare
for the CFA Level I examination by assessing foundational knowledge
across Ethics, Quantitative Methods, Economics, Financial Statement
Analysis, Corporate Issuers, Equity Investments, Fixed Income,
Derivatives, Alternative Investments, and Portfolio Management. Each
question includes the correct answer and a detailed italicised explanation
to reinforce understanding and support exam preparation.
Instructions
Answer all 40 questions.
Read each question carefully before selecting the best answer.
Each multiple-choice question has one best answer.
Complete all short-answer, application, and higher-order thinking
questions.
Review the explanations after completing the examination.
Exam Structure
, 15 Multiple Choice Questions
10 Short Answer Questions
10 Application/Scenario Questions
5 Higher-Order Thinking Questions
Total Questions: 40
SECTION A – MULTIPLE CHOICE QUESTIONS
Question 1
An investment has an initial value of $5,000 and grows to $5,750 after
one year.
What is the annual rate of return?
A. 10%
B. 12%
C. 15%
D. 17%
Answer: C
Explanation: Rate of return = (5,750 − 5,000) ÷ 5,000 = 750 ÷ 5,000 =
0.15 = 15%.
Question 2
Under the CFA Institute Code of Ethics, members and candidates should
place:
A. Personal interests before client interests.
, B. Employer interests before market integrity.
C. Client interests above their own interests.
D. Personal gain above professional duties.
Answer: C
Explanation: The CFA Institute Code of Ethics requires members and
candidates to act with integrity and place clients' interests above their
own.
Question 3
Which financial statement reports a company's assets, liabilities, and
shareholders' equity at a specific point in time?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Retained Earnings
Answer: C
Explanation: The balance sheet presents the financial position of a
company on a specific reporting date.
Question 4
A bond's price generally moves:
A. In the same direction as market interest rates.
