CFA LEVEL 1 EXAM TEST BANK PREPARATION
CFA (CHARTERED FINANCIAL ANALYST) LEVEL 1 EXAM TEST
BANK PREPARATION FOR 2025/2026 WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |BRAND NEW VERSION!!
If Mexico is running a large current account deficit with Canada, which of the
following will most likely occur?
A Canada will reduce its imports from Mexico
B The Mexican peso will depreciate relative to the Canadian dollar
C There will be an increase in Canadian exports to Mexico
B
If a company is liquidated, proceeds from asset sales are distributed to common
shareholders:
A before unsecured debt investor and preferred shareholder, claims are paid
B after secured debt investor and preferred shareholder, claims are paid
C after preferred shareholder claims are paid but before unsecured debt investor
claims are paid
B
Which of the following is not a sovereign bond issue?
A State of New York municipal bond
B US Treasury note
C German bund
A
Which of the following bonds contains an embedded option that provides the
issuer certain rights?
A Putable bond
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, CFA LEVEL 1 EXAM TEST BANK PREPARATION
B Callable bond
C Convertible bond
B
At which stage in the trading process is cash exchanged for securities between
parties in a given security trade?
A Settlement
B Confirmation
C Clearing
A
A consumer pays off a car loan held by a bank with which he has no other
business. Which of the following is the most appropriate document management
practice for the bank to follow?
A Return all documents to the consumer
B Shred all documents related to the transaction
C Determine which documents to retain and which to dispose of
C
Diversification will not help reduce a portfolio's:
A systematic risk
B specific risk
C overall risk
A
Compared with passive investment management, active investment management
will involve:
A tracking a benchmark
B market timing
C lower transaction costs
B
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, CFA LEVEL 1 EXAM TEST BANK PREPARATION
Which of the following is not a factor to consider in a document classification
system?
A Direction in which documents flow
B Ensuring that all documents are standardized
C Source of the document
B
A fund manager's alpha is that part of the fund's return that can be attributed to:
(a) the market
(b) skill
(c) luck
B
Which of the following is considered an institutional investor?
(a) Accredited investor
(b) Sovereign wealth fund
(c) Separately managed account
B
A limitation of the value at risk (VaR) approach to measuring risk is that it fails to
specify:
(a) the probability that a loss could occur
(b) a time frame for potential losses
(c) the maximum loss that could occur
C
The possibility that a portfolio manager will lose money because the bond
valuation model he uses is flawed is an example of:
A operational risk
B investment risk
C compliance risk
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, CFA LEVEL 1 EXAM TEST BANK PREPARATION
A
A fund manager does not compare his portfolio with the benchmark in terms of:
A performance
B composition
C fees
C
Phil Jones, CFA, has just finished researching Alpha One Inc. and is about to issue
an unfavorable report on the company. His manager does not want him to state
any adverse opinions about Alpha One, as it could adversely affect their firm's
relations with the company, which is an important investment banking client.
Which of the following actions by the manager most likely violates Standard I (B):
Independence and Objectivity?
A Putting Alpha One on a restricted list
B Asking Jones to issue a favorable report
C Asking Jones to only state facts about the company
B
Which of the following is least likely a violation of Standard I (D): Misconduct?
A Engaging in frequent fights on the trading floor
B Offering higher-quality services to certain clients
C Getting intoxicated during office hours
B
Martha Stevens, CFA, is an investment manager who uses her friend, Robert
James, exclusively for her clients' brokerage transactions. James provides better
services than other brokers in return for a slightly higher price, which Stevens
believes is justified. Which of the following statements is most accurate?
A Stevens is in violation of Standard III (A): Loyalty, Prudence and Care.
B Stevens is in violation of Standard III (B): Fair Dealing.
C Stevens has not violated any standard.
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CFA (CHARTERED FINANCIAL ANALYST) LEVEL 1 EXAM TEST
BANK PREPARATION FOR 2025/2026 WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |BRAND NEW VERSION!!
If Mexico is running a large current account deficit with Canada, which of the
following will most likely occur?
A Canada will reduce its imports from Mexico
B The Mexican peso will depreciate relative to the Canadian dollar
C There will be an increase in Canadian exports to Mexico
B
If a company is liquidated, proceeds from asset sales are distributed to common
shareholders:
A before unsecured debt investor and preferred shareholder, claims are paid
B after secured debt investor and preferred shareholder, claims are paid
C after preferred shareholder claims are paid but before unsecured debt investor
claims are paid
B
Which of the following is not a sovereign bond issue?
A State of New York municipal bond
B US Treasury note
C German bund
A
Which of the following bonds contains an embedded option that provides the
issuer certain rights?
A Putable bond
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, CFA LEVEL 1 EXAM TEST BANK PREPARATION
B Callable bond
C Convertible bond
B
At which stage in the trading process is cash exchanged for securities between
parties in a given security trade?
A Settlement
B Confirmation
C Clearing
A
A consumer pays off a car loan held by a bank with which he has no other
business. Which of the following is the most appropriate document management
practice for the bank to follow?
A Return all documents to the consumer
B Shred all documents related to the transaction
C Determine which documents to retain and which to dispose of
C
Diversification will not help reduce a portfolio's:
A systematic risk
B specific risk
C overall risk
A
Compared with passive investment management, active investment management
will involve:
A tracking a benchmark
B market timing
C lower transaction costs
B
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, CFA LEVEL 1 EXAM TEST BANK PREPARATION
Which of the following is not a factor to consider in a document classification
system?
A Direction in which documents flow
B Ensuring that all documents are standardized
C Source of the document
B
A fund manager's alpha is that part of the fund's return that can be attributed to:
(a) the market
(b) skill
(c) luck
B
Which of the following is considered an institutional investor?
(a) Accredited investor
(b) Sovereign wealth fund
(c) Separately managed account
B
A limitation of the value at risk (VaR) approach to measuring risk is that it fails to
specify:
(a) the probability that a loss could occur
(b) a time frame for potential losses
(c) the maximum loss that could occur
C
The possibility that a portfolio manager will lose money because the bond
valuation model he uses is flawed is an example of:
A operational risk
B investment risk
C compliance risk
3|Page
, CFA LEVEL 1 EXAM TEST BANK PREPARATION
A
A fund manager does not compare his portfolio with the benchmark in terms of:
A performance
B composition
C fees
C
Phil Jones, CFA, has just finished researching Alpha One Inc. and is about to issue
an unfavorable report on the company. His manager does not want him to state
any adverse opinions about Alpha One, as it could adversely affect their firm's
relations with the company, which is an important investment banking client.
Which of the following actions by the manager most likely violates Standard I (B):
Independence and Objectivity?
A Putting Alpha One on a restricted list
B Asking Jones to issue a favorable report
C Asking Jones to only state facts about the company
B
Which of the following is least likely a violation of Standard I (D): Misconduct?
A Engaging in frequent fights on the trading floor
B Offering higher-quality services to certain clients
C Getting intoxicated during office hours
B
Martha Stevens, CFA, is an investment manager who uses her friend, Robert
James, exclusively for her clients' brokerage transactions. James provides better
services than other brokers in return for a slightly higher price, which Stevens
believes is justified. Which of the following statements is most accurate?
A Stevens is in violation of Standard III (A): Loyalty, Prudence and Care.
B Stevens is in violation of Standard III (B): Fair Dealing.
C Stevens has not violated any standard.
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