CFA Level 1 Certification Exam Questions with AI Explanations

QUESTION: 101

Which of the following rules apply for calculations under the Performance Presentation Standards?

Accrual accounting must be used for fixed-income securities.
All of these answers.
Total return, including realized and unrealized gains and losses, must be used.
Time-weighted rate of return must be used.

Answer(s): B

Explanation:

All of these answers are general rules applying to calculation of returns under the PPS.

QUESTION: 102

According to the AIMR-PPS when presenting the performance record of composites containing portfolios that use leverage, which of the following statements are true?

If the use of leverage is discretionary, the performance presented must include the effects of the leverage.
If the use of leverage is discretionary, performance on a restated, all-cash basis must be provided.
All of these statements are true.
If the use of leverage is nondiscretionary, performance must be presented on an all-cash basis.

Answer(s): C

Explanation:

For composites containing portfolios that use leverage, all of the statements are true. This is a requirement for presentation of results.

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QUESTION: 103

Which of the following AIMR standards states that a member shall not knowingly participate, or assist, in any violation of applicable laws, regulations, or the Code and Standards?

III
VI
V
I

Answer(s): D

Explanation:

Standard I: Fundamental Responsibilities states: "Members shall: A. Maintain knowledge of and comply with all applicable laws, rules and regulations of any government, governmental agency, regulatory organization, licensing agency, or professional association governing the members' professional activities, and B. Not knowingly participate or assist in any violation of such laws, rules, or regulations."

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QUESTION: 104

Which of the following is/are true about the definition of "total firm assets" where PPS are concerned?

Total assets include non-discretionary as well as discretionary assets.
II. Unless the firm actually manages the assets underlying investment strategies, they are not included in the definition of total assets.
III. Assets assigned to subadvisors which are not directly under the firm's management should not be included as part of "total assets."
I, II and III
I and III only
II and III only
I and II only

Answer(s): A

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QUESTION: 105

Which of the following can be found in Standard I?

Members shall maintain knowledge of and comply with all applicable laws.
Members shall not undertake any independent practice in competition with employer without written consent.
Members shall maintain appropriate records to support the reasonableness of recommendations.
Members shall not participate in plagiarism.
Members shall make reasonable efforts to achieve public dissemination of material nonpublic information disclosed in breach of a duty.

Answer(s): A

Explanation:

Standard I states that members shall: "A. Maintain knowledge of and comply with all applicable laws of any governing agency or professional association governing the member's professional activities, and B. Not knowingly participate or assist in any violation of laws, rules or regulations."

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Financial Institute CFA Level I Chartered Analyst® CFA Level 1 Exam Questions in PDF

Free Financial CFA Level 1 Dumps Questions (page: 21)

QUESTION: 101

Explanation:

QUESTION: 102

Explanation:

QUESTION: 103

Explanation:

QUESTION: 104

QUESTION: 105

Explanation: