CFA Level I Exam Questions And Correct
Answers (Verified Answers) Plus
Rationales 2025/2026 Q&A | Instant
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1. According to the CFA Institute Code of Ethics, members must
primarily act for the benefit of:
A. Their employer
B. Their clients
C. The investment industry
D. The CFA Institute
Answer: B. Their clients
The Code of Ethics requires members to place the integrity of the
profession and the interests of clients above their own interests.
2. Which of the following best describes material nonpublic
information?
A. Information already reflected in market prices
B. Information that would affect a security’s price if disclosed
C. Any information known only by analysts
D. Information available in annual reports
Answer: B. Information that would affect a security’s price if
disclosed
Material information is information a reasonable investor would
consider important in making investment decisions.
3. Under the CFA Standards, misrepresentation includes:
A. Using third-party research with attribution
B. Guaranteeing investment performance
,C. Disclosing investment risks
D. Quoting historical returns accurately
Answer: B. Guaranteeing investment performance
Guaranteeing performance misleads clients and violates Standard
I(C) Misrepresentation.
4. Which of the following is most likely a violation of Standard III(B)
Fair Dealing?
A. Simultaneous trade execution for clients
B. Selectively providing research to large clients first
C. Providing research reports to all clients
D. Publishing recommendations publicly
Answer: B. Selectively providing research to large clients first
All clients must receive fair and equitable treatment regarding
investment recommendations.
5. Independence and objectivity can be compromised by:
A. Receiving modest gifts
B. Accepting lavish entertainment from issuers
C. Publishing independent research
D. Declining gifts
Answer: B. Accepting lavish entertainment from issuers
Large gifts can influence analyst judgment and violate Standard I(B).
Quantitative Methods
6. The future value of $1,000 invested for 3 years at 5% annually is
closest to:
A. $1,050
B. $1,102
, C. $1,158
D. $1,215
Answer: C. $1,158
FV = 1000 × (1.05³) = 1157.63 ≈ 1,158.
7. The present value of $1,000 received in 5 years at 6% is closest to:
A. $558
B. $747
C. $792
D. $839
Answer: B. $747
PV = 1000 / (1.06⁵) ≈ 747.
8. Which measure describes the spread of data around the mean?
A. Skewness
B. Variance
C. Kurtosis
D. Median
Answer: B. Variance
Variance measures dispersion of observations around the mean.
9. A distribution with a long right tail is:
A. Negatively skewed
B. Normally distributed
C. Positively skewed
D. Symmetric
Answer: C. Positively skewed
Positive skew means extreme values lie to the right.
Answers (Verified Answers) Plus
Rationales 2025/2026 Q&A | Instant
Download Pdf
1. According to the CFA Institute Code of Ethics, members must
primarily act for the benefit of:
A. Their employer
B. Their clients
C. The investment industry
D. The CFA Institute
Answer: B. Their clients
The Code of Ethics requires members to place the integrity of the
profession and the interests of clients above their own interests.
2. Which of the following best describes material nonpublic
information?
A. Information already reflected in market prices
B. Information that would affect a security’s price if disclosed
C. Any information known only by analysts
D. Information available in annual reports
Answer: B. Information that would affect a security’s price if
disclosed
Material information is information a reasonable investor would
consider important in making investment decisions.
3. Under the CFA Standards, misrepresentation includes:
A. Using third-party research with attribution
B. Guaranteeing investment performance
,C. Disclosing investment risks
D. Quoting historical returns accurately
Answer: B. Guaranteeing investment performance
Guaranteeing performance misleads clients and violates Standard
I(C) Misrepresentation.
4. Which of the following is most likely a violation of Standard III(B)
Fair Dealing?
A. Simultaneous trade execution for clients
B. Selectively providing research to large clients first
C. Providing research reports to all clients
D. Publishing recommendations publicly
Answer: B. Selectively providing research to large clients first
All clients must receive fair and equitable treatment regarding
investment recommendations.
5. Independence and objectivity can be compromised by:
A. Receiving modest gifts
B. Accepting lavish entertainment from issuers
C. Publishing independent research
D. Declining gifts
Answer: B. Accepting lavish entertainment from issuers
Large gifts can influence analyst judgment and violate Standard I(B).
Quantitative Methods
6. The future value of $1,000 invested for 3 years at 5% annually is
closest to:
A. $1,050
B. $1,102
, C. $1,158
D. $1,215
Answer: C. $1,158
FV = 1000 × (1.05³) = 1157.63 ≈ 1,158.
7. The present value of $1,000 received in 5 years at 6% is closest to:
A. $558
B. $747
C. $792
D. $839
Answer: B. $747
PV = 1000 / (1.06⁵) ≈ 747.
8. Which measure describes the spread of data around the mean?
A. Skewness
B. Variance
C. Kurtosis
D. Median
Answer: B. Variance
Variance measures dispersion of observations around the mean.
9. A distribution with a long right tail is:
A. Negatively skewed
B. Normally distributed
C. Positively skewed
D. Symmetric
Answer: C. Positively skewed
Positive skew means extreme values lie to the right.
