CFA Level 1 Mock Exam 11 : 2025 Mock
Exam A Session 1: Questions And
Answers With Verified Solutions 100%
Correct!!!
Peter Levinson, CFA, declared personal bankruptcy due to unpaid medical bills.
After losing his receipt for a business dinner, he uses his wife's receipt for a
smaller amount from the same restaurant to submit his expense claim. Has
Levinson most likely violated the Standards?
A. No
B. Yes, by declaring personal bankruptcy
C. Yes, by using his wife's receipt for his expense claim - ANSWER✔✔C. Yes, by
using his wife's receipt for his expense claim
Correct because according to the Standard I(D), misconduct, Members and
Candidates must not engage in any professional conduct involving dishonesty,
fraud, or deceit or commit any act that reflects adversely on their professional
reputation, integrity, or competence. And using his wife's receipt for expense claim
is a dishonest professional conduct.
Ethics Application
explain how the practices, policies, and conduct do or do not violate the CFA
Institute Code of Ethics and Standards of Professional Conduct
A member has been asked by her supervisor to write a research report on a
company. The member's firm owns options to buy the company's stock. The
member's firm does not possess material nonpublic information on the company.
According to the Standards, the member should:
,A. outsource the report to an approved third-party research provider.
B. place the stock on a restricted list and provide only factual information about the
company.
C. disclose in the research report the amount and the expiration date of the options
held by her firm in the covered company. - ANSWER✔✔C. disclose in the
research report the amount and the expiration date of the options held by her firm
in the covered company.
because according to the recommended procedures for compliance with Standard
VI (A), Disclosure of Conflicts, if a member, a candidate, or a member's or
candidate's firm has outstanding agent options to buy stock as part of the
compensation package for corporate financing activities, the amount and expiration
date of these options should be disclosed as a footnote to any research report
published by the member's or candidate's firm. Therefore, if the member's firm
owns options to buy the company's stock as part of the compensation for offering
corporate finance solutions, the member should disclose in the research report the
amount and the expiration date of the options held by her firm in the covered
company.
Guidance for Standards I-VII
recommend practices and procedures designed to prevent violations of the Code of
Ethics and Standards of Professional Conduct
Simon Jensen, CFA, a portfolio manager, participates in an IPO of PT Tech.
Jensen prorates the oversubscribed issue on an odd-lot basis to suitable clients.
After the successful IPO, his colleague Todd Durkny, a CFA candidate, initiates
coverage of PT Tech and sends her "buy" recommendation to all clients by email.
She then calls her premium fee-paying clients to discuss PT Tech in-depth. Whose
actions are consistent with the Standards?
,A. Durkny's only
B. Jensen's only
C. Both Durkny's and Jensen's - ANSWER✔✔A. Durkny's only
Correct because according to Standard III (B), Fair Dealing, members and
candidates may provide more personal, specialized, or in-depth service to clients
who are willing to pay for premium services through higher management fees or
higher levels of brokerage.
According to the recommended procedures for compliance with the Standard
relating to performance presentation, members should:
A. exclude terminated accounts from performance history.
B. consider the knowledge of the audience to whom a performance presentation is
addressed.
C. use a representative account when presenting the performance of the weighted
composite of similar portfolios. - ANSWER✔✔B. consider the knowledge of the
audience to whom a performance presentation is addressed.
because according to Standard III (D), Performance Presentation, members can
meet obligation of the Standard by considering the knowledge and sophistication
of the audience to whom a performance presentation is addressed.
, Gurdeep Singh, CFA, is an analyst with a hedge fund and works closely with his
supervisor, Joan Tanner, who earned her CFA designation 20 years ago. Singh
becomes aware that Tanner uses her CFA designation even though she no longer
pays her membership dues. Tanner uses the designation during several meetings
that she and Singh have with the firm's clients and emphasizes that all her team
members, including herself, are CFA charterholders. Has Singh violated the
Standards?
A. No
B. Yes, the Standard relating to knowledge of the law
C. Yes, the Standard relating to reference to CFA Institute, the CFA designation,
and the CFA program - ANSWER✔✔B. Yes, the Standard relating to knowledge
of the law
because according to Standard I(A), Knowledge of the Law, members and
Candidates must not knowingly participate or assist in and must dissociate from
any violation of such laws, rules, or regulations. In this case, by staying silent in a
client meeting in which he knows false information is being given to a potential
investor that could cause harm to that investor, Singh would be seen as assisting
Tanner in providing that false information, even though Singh is not actively
engaging in the misconduct himself Singh should report her conduct to the fund's
compliance department for it to address and should dissociate himself from the
activity. By not dissociating himself from Tanner and their meetings with clients,
Singh has violated the Standard.
John McCay, CFA, is an analyst who has prepared a report on the cable industry
based on research from a variety of sources and analysts. He compiles these
findings to form his own opinion and distributes the report to clients without
acknowledging his sources. McCay has violated the Standards by:
Exam A Session 1: Questions And
Answers With Verified Solutions 100%
Correct!!!
Peter Levinson, CFA, declared personal bankruptcy due to unpaid medical bills.
After losing his receipt for a business dinner, he uses his wife's receipt for a
smaller amount from the same restaurant to submit his expense claim. Has
Levinson most likely violated the Standards?
A. No
B. Yes, by declaring personal bankruptcy
C. Yes, by using his wife's receipt for his expense claim - ANSWER✔✔C. Yes, by
using his wife's receipt for his expense claim
Correct because according to the Standard I(D), misconduct, Members and
Candidates must not engage in any professional conduct involving dishonesty,
fraud, or deceit or commit any act that reflects adversely on their professional
reputation, integrity, or competence. And using his wife's receipt for expense claim
is a dishonest professional conduct.
Ethics Application
explain how the practices, policies, and conduct do or do not violate the CFA
Institute Code of Ethics and Standards of Professional Conduct
A member has been asked by her supervisor to write a research report on a
company. The member's firm owns options to buy the company's stock. The
member's firm does not possess material nonpublic information on the company.
According to the Standards, the member should:
,A. outsource the report to an approved third-party research provider.
B. place the stock on a restricted list and provide only factual information about the
company.
C. disclose in the research report the amount and the expiration date of the options
held by her firm in the covered company. - ANSWER✔✔C. disclose in the
research report the amount and the expiration date of the options held by her firm
in the covered company.
because according to the recommended procedures for compliance with Standard
VI (A), Disclosure of Conflicts, if a member, a candidate, or a member's or
candidate's firm has outstanding agent options to buy stock as part of the
compensation package for corporate financing activities, the amount and expiration
date of these options should be disclosed as a footnote to any research report
published by the member's or candidate's firm. Therefore, if the member's firm
owns options to buy the company's stock as part of the compensation for offering
corporate finance solutions, the member should disclose in the research report the
amount and the expiration date of the options held by her firm in the covered
company.
Guidance for Standards I-VII
recommend practices and procedures designed to prevent violations of the Code of
Ethics and Standards of Professional Conduct
Simon Jensen, CFA, a portfolio manager, participates in an IPO of PT Tech.
Jensen prorates the oversubscribed issue on an odd-lot basis to suitable clients.
After the successful IPO, his colleague Todd Durkny, a CFA candidate, initiates
coverage of PT Tech and sends her "buy" recommendation to all clients by email.
She then calls her premium fee-paying clients to discuss PT Tech in-depth. Whose
actions are consistent with the Standards?
,A. Durkny's only
B. Jensen's only
C. Both Durkny's and Jensen's - ANSWER✔✔A. Durkny's only
Correct because according to Standard III (B), Fair Dealing, members and
candidates may provide more personal, specialized, or in-depth service to clients
who are willing to pay for premium services through higher management fees or
higher levels of brokerage.
According to the recommended procedures for compliance with the Standard
relating to performance presentation, members should:
A. exclude terminated accounts from performance history.
B. consider the knowledge of the audience to whom a performance presentation is
addressed.
C. use a representative account when presenting the performance of the weighted
composite of similar portfolios. - ANSWER✔✔B. consider the knowledge of the
audience to whom a performance presentation is addressed.
because according to Standard III (D), Performance Presentation, members can
meet obligation of the Standard by considering the knowledge and sophistication
of the audience to whom a performance presentation is addressed.
, Gurdeep Singh, CFA, is an analyst with a hedge fund and works closely with his
supervisor, Joan Tanner, who earned her CFA designation 20 years ago. Singh
becomes aware that Tanner uses her CFA designation even though she no longer
pays her membership dues. Tanner uses the designation during several meetings
that she and Singh have with the firm's clients and emphasizes that all her team
members, including herself, are CFA charterholders. Has Singh violated the
Standards?
A. No
B. Yes, the Standard relating to knowledge of the law
C. Yes, the Standard relating to reference to CFA Institute, the CFA designation,
and the CFA program - ANSWER✔✔B. Yes, the Standard relating to knowledge
of the law
because according to Standard I(A), Knowledge of the Law, members and
Candidates must not knowingly participate or assist in and must dissociate from
any violation of such laws, rules, or regulations. In this case, by staying silent in a
client meeting in which he knows false information is being given to a potential
investor that could cause harm to that investor, Singh would be seen as assisting
Tanner in providing that false information, even though Singh is not actively
engaging in the misconduct himself Singh should report her conduct to the fund's
compliance department for it to address and should dissociate himself from the
activity. By not dissociating himself from Tanner and their meetings with clients,
Singh has violated the Standard.
John McCay, CFA, is an analyst who has prepared a report on the cable industry
based on research from a variety of sources and analysts. He compiles these
findings to form his own opinion and distributes the report to clients without
acknowledging his sources. McCay has violated the Standards by:
