CFA LEVEL I EXAM STUDY GUIDE
2026/2027
ACCURATE QUESTIONS WITH
CORRECT DETAILED SOLUTIONS |
NEWEST VERSION
Description: This comprehensive revision set contains 200 multiple-choice questions
(MCQs) covering all major topics of the CFA Level I curriculum. Each question includes
four options (A–D), with the correct answer clearly marked with a ✅ and a detailed
solution explaining the reasoning. The correct answers are randomly distributed
across A, B, C, and D to simulate the real exam experience and avoid pattern bias.
Keywords: CFA Level I, 2026, 2027, MCQ, revision, ethics, quantitative methods,
economics, financial reporting, corporate finance, equity, fixed income, derivatives,
alternative investments, portfolio management, exam prep, study guide.
1. Ethical and Professional Standards
Q1. According to the CFA Institute Code of Ethics and Standards of Professional
Conduct, which of the following is most accurate regarding the duty to clients?
A. Members may place their own interests above those of clients if disclosed.
B. Members must act with loyalty, prudence, and care in a manner consistent with
their clients’ interests. ✅
C. Members are only required to act in the best interest of their employer.
D. Members may use client information for personal benefit if it is not material.
,Solution: Standard III(A) – Loyalty, Prudence, and Care requires members to act for the
benefit of clients and place client interests before their own. Disclosure does not permit
putting personal interests first.
Q2. A member receives a gift from a client that could reasonably be expected to
compromise independence. Under the CFA Institute Standards, the member should:
A. Accept the gift if it is less than $100.
B. Accept the gift only if disclosed to the employer.
C. Decline the gift or disclose it to the employer and obtain permission. ✅
D. Accept the gift and report it to the CFA Institute.
Solution: Standard I(B) – Independence and Objectivity requires members to avoid gifts
that may compromise independence. If a gift could compromise independence, it
should be declined or disclosed to the employer.
Q3. Which of the following is most consistent with the CFA Institute’s Global
Investment Performance Standards (GIPS)?
A. GIPS compliance is mandatory for all CFA members.
B. GIPS ensures that performance presentations are fair and comparable. ✅
C. GIPS only applies to equity portfolios.
D. GIPS requires the use of a single benchmark for all portfolios.
Solution: GIPS are voluntary ethical standards for performance reporting, designed to
ensure fair representation and comparability.
,Q4. A portfolio manager discovers that a colleague has violated the CFA Institute
Standards. The most appropriate action is to:
A. Ignore the violation to avoid conflict.
B. Report the violation to the CFA Institute immediately.
C. Report the violation to the supervisor or compliance department. ✅
D. Discuss the violation with other colleagues.
Solution: Standard I(A) – Knowledge of the Law requires reporting violations to the
appropriate authority within the firm.
Q5. Under Standard VI(B) – Priority of Transactions, a member must:
A. Execute client trades before personal trades. ✅
B. Execute personal trades before client trades.
C. Execute employer trades before client trades.
D. Treat all trades equally.
Solution: Client and employer transactions must take precedence over personal
transactions.
2. Quantitative Methods
Q6. A sample of 25 observations has a mean of 50 and a standard deviation of 10.
The standard error of the sample mean is:
A. 0.4
B. 2.0 ✅
C. 5.0
D. 10.0
, Solution: Standard error = σ / √n = 10 / √25 = = 2.0.
Q7. If the nominal interest rate is 6% and inflation is 2%, the real interest rate is
approximately:
A. 2%
B. 4% ✅
C. 6%
D. 8%
Solution: Real rate ≈ Nominal – Inflation = 6% – 2% = 4%.
Q8. A portfolio has an expected return of 12% and a standard deviation of 15%. The
coefficient of variation is:
A. 0.80
B. 1.25 ✅
C. 1.50
D. 1.80
Solution: CV = Standard deviation / Expected return = = 1.25.
Q9. Which of the following best describes a Type I error?
A. Rejecting a true null hypothesis. ✅
B. Failing to reject a false null hypothesis.
2026/2027
ACCURATE QUESTIONS WITH
CORRECT DETAILED SOLUTIONS |
NEWEST VERSION
Description: This comprehensive revision set contains 200 multiple-choice questions
(MCQs) covering all major topics of the CFA Level I curriculum. Each question includes
four options (A–D), with the correct answer clearly marked with a ✅ and a detailed
solution explaining the reasoning. The correct answers are randomly distributed
across A, B, C, and D to simulate the real exam experience and avoid pattern bias.
Keywords: CFA Level I, 2026, 2027, MCQ, revision, ethics, quantitative methods,
economics, financial reporting, corporate finance, equity, fixed income, derivatives,
alternative investments, portfolio management, exam prep, study guide.
1. Ethical and Professional Standards
Q1. According to the CFA Institute Code of Ethics and Standards of Professional
Conduct, which of the following is most accurate regarding the duty to clients?
A. Members may place their own interests above those of clients if disclosed.
B. Members must act with loyalty, prudence, and care in a manner consistent with
their clients’ interests. ✅
C. Members are only required to act in the best interest of their employer.
D. Members may use client information for personal benefit if it is not material.
,Solution: Standard III(A) – Loyalty, Prudence, and Care requires members to act for the
benefit of clients and place client interests before their own. Disclosure does not permit
putting personal interests first.
Q2. A member receives a gift from a client that could reasonably be expected to
compromise independence. Under the CFA Institute Standards, the member should:
A. Accept the gift if it is less than $100.
B. Accept the gift only if disclosed to the employer.
C. Decline the gift or disclose it to the employer and obtain permission. ✅
D. Accept the gift and report it to the CFA Institute.
Solution: Standard I(B) – Independence and Objectivity requires members to avoid gifts
that may compromise independence. If a gift could compromise independence, it
should be declined or disclosed to the employer.
Q3. Which of the following is most consistent with the CFA Institute’s Global
Investment Performance Standards (GIPS)?
A. GIPS compliance is mandatory for all CFA members.
B. GIPS ensures that performance presentations are fair and comparable. ✅
C. GIPS only applies to equity portfolios.
D. GIPS requires the use of a single benchmark for all portfolios.
Solution: GIPS are voluntary ethical standards for performance reporting, designed to
ensure fair representation and comparability.
,Q4. A portfolio manager discovers that a colleague has violated the CFA Institute
Standards. The most appropriate action is to:
A. Ignore the violation to avoid conflict.
B. Report the violation to the CFA Institute immediately.
C. Report the violation to the supervisor or compliance department. ✅
D. Discuss the violation with other colleagues.
Solution: Standard I(A) – Knowledge of the Law requires reporting violations to the
appropriate authority within the firm.
Q5. Under Standard VI(B) – Priority of Transactions, a member must:
A. Execute client trades before personal trades. ✅
B. Execute personal trades before client trades.
C. Execute employer trades before client trades.
D. Treat all trades equally.
Solution: Client and employer transactions must take precedence over personal
transactions.
2. Quantitative Methods
Q6. A sample of 25 observations has a mean of 50 and a standard deviation of 10.
The standard error of the sample mean is:
A. 0.4
B. 2.0 ✅
C. 5.0
D. 10.0
, Solution: Standard error = σ / √n = 10 / √25 = = 2.0.
Q7. If the nominal interest rate is 6% and inflation is 2%, the real interest rate is
approximately:
A. 2%
B. 4% ✅
C. 6%
D. 8%
Solution: Real rate ≈ Nominal – Inflation = 6% – 2% = 4%.
Q8. A portfolio has an expected return of 12% and a standard deviation of 15%. The
coefficient of variation is:
A. 0.80
B. 1.25 ✅
C. 1.50
D. 1.80
Solution: CV = Standard deviation / Expected return = = 1.25.
Q9. Which of the following best describes a Type I error?
A. Rejecting a true null hypothesis. ✅
B. Failing to reject a false null hypothesis.
