CFA LEVEL I — MOCK EXAM NEWEST 2025-
2026 UPDATE 100 QUESTIONS & 100%
CORRECT ANSWERS GRADED A+ (BRAND
NEW!!)
Most Tested Areas: Ethics, Quantitative Methods, Financial
Reporting & Analysis, Economics, Corporate Issuers, Portfolio
Management
1. What is the primary purpose of the CFA Institute
Code of Ethics?
To promote integrity and professionalism in the investment
profession
It establishes ethical principles to guide CFA charterholders and
candidates in professional conduct.
2. Which time value of money concept states that
money available today is worth more than the same
amount in the future?
Present value principle
This reflects the opportunity to earn returns on money over time.
3. If a bond sells at a premium, its coupon rate is most
likely:
Higher than the market yield
, Investors pay more because the bond’s fixed payments exceed
prevailing rates.
4. Under IFRS, inventory is valued at:
Lower of cost or net realizable value
NRV represents expected selling price minus costs to complete
and sell.
5. Standard deviation measures:
Total risk of an investment
It captures dispersion of returns around the mean.
6. A company issuing new shares to finance expansion
is engaging in:
Equity financing
Funds are raised by selling ownership stakes.
7. GDP measures:
Total value of final goods and services produced within a
country
It excludes intermediate goods to avoid double counting.
8. The internal rate of return (IRR) is the discount rate
that makes NPV equal to:
Zero
At IRR, present value of inflows equals outflows.
9. Which financial statement shows a company’s
financial position at a point in time?
, Balance sheet
It lists assets, liabilities, and equity on a specific date.
10. Systematic risk is also known as:
Market risk
It cannot be diversified away because it affects the entire
market.
11. The Sharpe ratio measures:
Risk-adjusted return using total risk
It compares excess return to standard deviation.
12. A decrease in interest rates will most likely
cause bond prices to:
Increase
Bond prices move inversely to yields.
13. FIFO inventory method in inflationary periods
results in:
Higher reported profits
Older, cheaper costs are recognized first, lowering cost of goods
sold.
14. Elastic demand means quantity demanded is:
Highly responsive to price changes
Elasticity greater than one indicates strong responsiveness.
15. The primary objective of portfolio
diversification is to:
2026 UPDATE 100 QUESTIONS & 100%
CORRECT ANSWERS GRADED A+ (BRAND
NEW!!)
Most Tested Areas: Ethics, Quantitative Methods, Financial
Reporting & Analysis, Economics, Corporate Issuers, Portfolio
Management
1. What is the primary purpose of the CFA Institute
Code of Ethics?
To promote integrity and professionalism in the investment
profession
It establishes ethical principles to guide CFA charterholders and
candidates in professional conduct.
2. Which time value of money concept states that
money available today is worth more than the same
amount in the future?
Present value principle
This reflects the opportunity to earn returns on money over time.
3. If a bond sells at a premium, its coupon rate is most
likely:
Higher than the market yield
, Investors pay more because the bond’s fixed payments exceed
prevailing rates.
4. Under IFRS, inventory is valued at:
Lower of cost or net realizable value
NRV represents expected selling price minus costs to complete
and sell.
5. Standard deviation measures:
Total risk of an investment
It captures dispersion of returns around the mean.
6. A company issuing new shares to finance expansion
is engaging in:
Equity financing
Funds are raised by selling ownership stakes.
7. GDP measures:
Total value of final goods and services produced within a
country
It excludes intermediate goods to avoid double counting.
8. The internal rate of return (IRR) is the discount rate
that makes NPV equal to:
Zero
At IRR, present value of inflows equals outflows.
9. Which financial statement shows a company’s
financial position at a point in time?
, Balance sheet
It lists assets, liabilities, and equity on a specific date.
10. Systematic risk is also known as:
Market risk
It cannot be diversified away because it affects the entire
market.
11. The Sharpe ratio measures:
Risk-adjusted return using total risk
It compares excess return to standard deviation.
12. A decrease in interest rates will most likely
cause bond prices to:
Increase
Bond prices move inversely to yields.
13. FIFO inventory method in inflationary periods
results in:
Higher reported profits
Older, cheaper costs are recognized first, lowering cost of goods
sold.
14. Elastic demand means quantity demanded is:
Highly responsive to price changes
Elasticity greater than one indicates strong responsiveness.
15. The primary objective of portfolio
diversification is to:
