C F A I N S T I T U T E · C H A R T E R E D F I N A N C I A L A N A LY S T
CFA Institute Mock Exam Part
2
Practice Question Bank
Comprehensive Review with 54 Questions, Answers & Rationales
Level 1 — Corporate Governance, ESG, Capital Budgeting, WACC, Derivatives
& Alternative Investments
Edition 1 · August 2026
,Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales — CFA Institute Mock Exam Part 2 2
CFA · Chartered Financial Analyst Page 1
, CFA INSTITUTE MOCK EXAM PART 2 GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
Read each stem, choose your answer, then check the rationale directly below it. The correct option is marked, and each
wrong option is explained so you understand why it's wrong — not just that it is. This guide contains 54 questions covering
the full scope of the CFA Institute Mock Exam Part 2 content with detailed rationales for every question.
Category: CFA Institute Mock Exam Part 2 — Level 1
1 Recent trends in corporate governance most likely include:
A focusing on the corporate governance system's responsibility to maximize shareholder value
B expanding the scope to consider the interests of employees, customers, and suppliers
C increasing the diversity of corporate governance systems tailored to specific jurisdictions
Why B is correct: Recent trends in corporate governance include expanding the scope beyond shareholders to consider
the interests of employees, customers, suppliers, and other stakeholders. This reflects a broader stakeholder perspective in
governance.
A — This is the traditional shareholder primacy view, not a recent trend.
C — Increasing diversity of governance systems is not a recent trend; globalization has led to more convergence.
2 Under the stakeholder theory, corporate governance is most consistent with a system of:
A internal controls and procedures by which individual companies are managed
B defined roles for management and the majority shareowner(s)
C checks and balances to minimize the conflicting interests among shareowners
Why A is correct: Under stakeholder theory, corporate governance is most consistent with a system of internal controls
and procedures by which individual companies are managed. Corporate governance is primarily aimed at managing the
conflicting interests between management and external shareholders, not amongst shareholders.
B — This focuses on majority shareowners, not stakeholder theory.
C — This focuses on conflicts among shareowners, not between management and shareholders.
CFA Institute Mock Exam Part
2
Practice Question Bank
Comprehensive Review with 54 Questions, Answers & Rationales
Level 1 — Corporate Governance, ESG, Capital Budgeting, WACC, Derivatives
& Alternative Investments
Edition 1 · August 2026
,Table of Contents
1. Instructions for Use 2
2. Practice Questions with Answers & Rationales — CFA Institute Mock Exam Part 2 2
CFA · Chartered Financial Analyst Page 1
, CFA INSTITUTE MOCK EXAM PART 2 GUIDE INSTRUCTIONS & PRACTICE QUESTIONS
How to Use This Guide
Read each stem, choose your answer, then check the rationale directly below it. The correct option is marked, and each
wrong option is explained so you understand why it's wrong — not just that it is. This guide contains 54 questions covering
the full scope of the CFA Institute Mock Exam Part 2 content with detailed rationales for every question.
Category: CFA Institute Mock Exam Part 2 — Level 1
1 Recent trends in corporate governance most likely include:
A focusing on the corporate governance system's responsibility to maximize shareholder value
B expanding the scope to consider the interests of employees, customers, and suppliers
C increasing the diversity of corporate governance systems tailored to specific jurisdictions
Why B is correct: Recent trends in corporate governance include expanding the scope beyond shareholders to consider
the interests of employees, customers, suppliers, and other stakeholders. This reflects a broader stakeholder perspective in
governance.
A — This is the traditional shareholder primacy view, not a recent trend.
C — Increasing diversity of governance systems is not a recent trend; globalization has led to more convergence.
2 Under the stakeholder theory, corporate governance is most consistent with a system of:
A internal controls and procedures by which individual companies are managed
B defined roles for management and the majority shareowner(s)
C checks and balances to minimize the conflicting interests among shareowners
Why A is correct: Under stakeholder theory, corporate governance is most consistent with a system of internal controls
and procedures by which individual companies are managed. Corporate governance is primarily aimed at managing the
conflicting interests between management and external shareholders, not amongst shareholders.
B — This focuses on majority shareowners, not stakeholder theory.
C — This focuses on conflicts among shareowners, not between management and shareholders.
