Free CFA Level 1 Practice Questions 2022
Number of questions: 180 multiple-choice questions
CFA exam format:
The first session (2 hours, 15 minutes): 90 multiple choice questions, covering the topics of ethics & professional standards, quantitative methods, economics, and financial reporting and analysis
Second session (2 hours, 15 minutes): 90 multiple choice questions, covering the topics of corporate finance, equity, fixed income, derivatives, alternative investments and portfolio management
Time limit: split between two 135-minute sessions (session times are approximate). There is an optional break between sessions. Candidates must take both sessions to receive an exam result.
This is one of the most important parts of CFA to the promotion of universal professional ethics. The subject covers the code of ethics, professional standards, and Global Investment Professional Standards (GIPS) as a larger part of the ethics aspect as applicable to the financial industry.
This subject is rather limited in its scope with 7% weightage and covers areas related to capital budgeting, NPV IRR, cost of capital, measures of leverage, basics of dividends, and share buybacks along with working capital management and corporate governance of listed companies. Some of the issues addressed consist of agency problems in the context of the agency-principal relationship.
This subject covers the fundamentals of micro as well as macroeconomics with its primary concentrate on the latter. This section has 10% weightage which makes it essential enough to be pursued with diligence.
The section has nearly 20% weightage, making it an important enough knowledge area for anyone pursuing CFA. This part tests the knowledge of financial ratios and financial statements commonly employed for the target of financial analysis. Along with, one should be well-conversant in the concepts of revenue recognition, accounts receivables, and inventory analysis along with taxes and long-term assets. It should be kept in mind when preparing for this exam that local accounting practices do not hold much relevance as CFA is more of a global exam and concentrates on US GAAP and IFRS practices.
This part is focused on quantitative analysis and mathematically-oriented approaches to address complex financial problems that make this knowledge area of such great value. Some sections in this part consist of performance measurement, time value of money, statistics and probability basics, sampling, and hypothesis testing along with correlation and linear regression analysis in excel. A study of these concepts brings highly useful tools and techniques for the knowledge areas of fixed income, equities, and portfolio management. A suitable understanding and grasp of quantitative techniques would be helpful in mastering a good proportion of CFA’s body of knowledge.
This subject contains forms of investment not covered under other knowledge areas of CFA. This consists of real estate funds, venture capital, hedge funds, and commodities. In addition, a special focus on commodities so it helps participants have an in-depth awareness of concepts related to trading in commodities. There could be 7 or 8 conceptually oriented questions, some of them related to commodities. Though this part is short on weightage in CFA Level I, with proper effort, these sections could be mastered with comparative ease.
Derivatives are complex financial instruments, and this part deals with them particularly, containing the basic futures, forwards, options, swaps, and hedging techniques usually employed. More complex mathematical ways are usually employed for studying these exotic financial instruments. On Level I, most of the material is still introductory, and the weightage of this section is only 5%, with only about 12 questions in the exam from this section.
This section first deals with equity markets and covers various tools and techniques available for the valuation of companies - DCF, PE Ratio, PBV, PCF… This subject has about 10% weightage with about 25 questions. Most of the questions related to the valuation and analysis of companies.
This part covers fixed income markets and instruments and their pricing techniques. Important concepts, containing yield measures, duration, and convexity, are discussed. This section sequentially deals with the bond analysis and valuation before taking up the bond’s features before finally moving on to 10 risks related to debt investments. The exam weightage is 10%.
This part solves basic principles of portfolio management and introduces some key concepts containing the Theory of Modern Portfolio and Capital Asset Pricing Model. Section weightage is only 7% - 17 questions in the exam. But this part gains increasing significance in Level II and Level III of CFA as the focus shifts to the application of available knowledge for efficient portfolio management.
The total exam fees for CFA Level 1 are US$1,150-$1,450, including training
A one-off enrolment fee of US$ 450, plus
Exam registration fee of US$700-1,000 depending on how early you register.
Yes, CFA Exam help:
It doesn't have an expiry date.
It said that you have cleared your level 1 exam and are one step closer to achieving your CFA charter. It's not a level-based degree as well.