CFA Level I Practice Exam – 100 Questions & Answers Plus Rationales
Latest 2026/27 Graded A Instant Pdf Download
Exam Structure
This practice exam covers all ten topics from the CFA Level I curriculum:
Topic Questions
Ethical and Professional Standards 12
Quantitative Methods 10
Economics 10
Financial Statement Analysis 10
Corporate Issuers 10
Equity Investments 12
Fixed Income 12
Derivatives 8
Alternative Investments 8
Portfolio Management 8
,Question 1 – Ethical and Professional Standards
Which of the following statements is most accurate? Ethics can be
described as:
A. A commitment to upholding the law
B. An individual's personal opinion about right and wrong
C. A set of moral principles that provide guidance for our behavior
Correct Answer: C – Ethics can be described as a set of moral principles
that provide guidance for our behavior; these may be moral principles
shared by a community or societal group.
Question 2 – Ethical and Professional Standards
According to the CFA Institute Code of Ethics, members must:
A. Prioritize personal interests over client interests
B. Place the integrity of the investment profession above personal gain
C. Guarantee investment returns
D. Avoid continuing education
Correct Answer: B – The CFA Institute Code of Ethics requires members
and candidates to place the integrity of the profession and clients'
interests above their own personal interests.
Question 3 – Ethical and Professional Standards
A portfolio manager receives an expensive gift from a brokerage firm
after directing trades to the firm. The manager should:
A. Accept without disclosure
B. Decline or disclose according to firm policy
C. Request additional gifts
D. Ignore compliance requirements
,Correct Answer: B – Gifts may impair objectivity. Disclosure and
compliance approval are required.
Question 4 – Ethical and Professional Standards
An analyst knowingly distributes research containing false earnings
projections. This most likely violates:
A. Independence and Objectivity
B. Misrepresentation
C. Suitability
D. Loyalty
Correct Answer: B – Knowingly providing false information constitutes
misrepresentation under CFA Standards.
Question 5 – Ethical and Professional Standards
Which of the following is a violation of the CFA Institute Standards of
Professional Conduct?
A. Using fair, diligent research in investment recommendations
B. Charging a fee based on assets under management
C. Misrepresenting performance history to clients
D. Providing clients with accurate risk disclosures
Correct Answer: C – Misrepresentation of investment performance is a
direct violation of ethical standards.
Question 6 – Ethical and Professional Standards
Harold Davies, CFA, manages a mutual fund. He allocates IPO shares to
his personal account instead of the fund because the fund has a large
cash position and can buy in the secondary market. This violates:
A. Standard III(A) (Loyalty, Prudence, and Care)
, B. Standard VI(B) (Priority of Transactions)
C. Both A and B
D. Neither A nor B
Correct Answer: C – This violates Standard III(A) because he is not
acting in the best interest of the fund (loyalty), and Standard VI(B)
requires that client transactions take priority over personal transactions.
Question 7 – Ethical and Professional Standards
A member who receives confidential client information must:
A. Share it with colleagues for advice
B. Use it for personal gain
C. Keep it confidential unless legally required to disclose
D. Use it for research purposes
Correct Answer: C – Confidential client information must remain
protected unless disclosure is legally mandated.
Question 8 – Ethical and Professional Standards
Which action best demonstrates diligence and reasonable basis?
A. Recommending a stock based on rumors
B. Conducting thorough research before making recommendations
C. Copying another analyst's report
D. Trading before analysis is complete
Correct Answer: B – Recommendations must be supported by adequate
research and analysis.
Question 9 – Ethical and Professional Standards
Material nonpublic information:
Latest 2026/27 Graded A Instant Pdf Download
Exam Structure
This practice exam covers all ten topics from the CFA Level I curriculum:
Topic Questions
Ethical and Professional Standards 12
Quantitative Methods 10
Economics 10
Financial Statement Analysis 10
Corporate Issuers 10
Equity Investments 12
Fixed Income 12
Derivatives 8
Alternative Investments 8
Portfolio Management 8
,Question 1 – Ethical and Professional Standards
Which of the following statements is most accurate? Ethics can be
described as:
A. A commitment to upholding the law
B. An individual's personal opinion about right and wrong
C. A set of moral principles that provide guidance for our behavior
Correct Answer: C – Ethics can be described as a set of moral principles
that provide guidance for our behavior; these may be moral principles
shared by a community or societal group.
Question 2 – Ethical and Professional Standards
According to the CFA Institute Code of Ethics, members must:
A. Prioritize personal interests over client interests
B. Place the integrity of the investment profession above personal gain
C. Guarantee investment returns
D. Avoid continuing education
Correct Answer: B – The CFA Institute Code of Ethics requires members
and candidates to place the integrity of the profession and clients'
interests above their own personal interests.
Question 3 – Ethical and Professional Standards
A portfolio manager receives an expensive gift from a brokerage firm
after directing trades to the firm. The manager should:
A. Accept without disclosure
B. Decline or disclose according to firm policy
C. Request additional gifts
D. Ignore compliance requirements
,Correct Answer: B – Gifts may impair objectivity. Disclosure and
compliance approval are required.
Question 4 – Ethical and Professional Standards
An analyst knowingly distributes research containing false earnings
projections. This most likely violates:
A. Independence and Objectivity
B. Misrepresentation
C. Suitability
D. Loyalty
Correct Answer: B – Knowingly providing false information constitutes
misrepresentation under CFA Standards.
Question 5 – Ethical and Professional Standards
Which of the following is a violation of the CFA Institute Standards of
Professional Conduct?
A. Using fair, diligent research in investment recommendations
B. Charging a fee based on assets under management
C. Misrepresenting performance history to clients
D. Providing clients with accurate risk disclosures
Correct Answer: C – Misrepresentation of investment performance is a
direct violation of ethical standards.
Question 6 – Ethical and Professional Standards
Harold Davies, CFA, manages a mutual fund. He allocates IPO shares to
his personal account instead of the fund because the fund has a large
cash position and can buy in the secondary market. This violates:
A. Standard III(A) (Loyalty, Prudence, and Care)
, B. Standard VI(B) (Priority of Transactions)
C. Both A and B
D. Neither A nor B
Correct Answer: C – This violates Standard III(A) because he is not
acting in the best interest of the fund (loyalty), and Standard VI(B)
requires that client transactions take priority over personal transactions.
Question 7 – Ethical and Professional Standards
A member who receives confidential client information must:
A. Share it with colleagues for advice
B. Use it for personal gain
C. Keep it confidential unless legally required to disclose
D. Use it for research purposes
Correct Answer: C – Confidential client information must remain
protected unless disclosure is legally mandated.
Question 8 – Ethical and Professional Standards
Which action best demonstrates diligence and reasonable basis?
A. Recommending a stock based on rumors
B. Conducting thorough research before making recommendations
C. Copying another analyst's report
D. Trading before analysis is complete
Correct Answer: B – Recommendations must be supported by adequate
research and analysis.
Question 9 – Ethical and Professional Standards
Material nonpublic information:
