<p class="in-excerpt" style="text-align: center;"><span style="font-size: 24pt;"><strong>Free CFA Level 1 Practice Questions 2023</strong></span></p>
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<h2><b>What is the CFA Level 1 exam structure? </b></h2>
<p><b>Number of questions</b><span style="font-weight: 400;">: 180 multiple-choice questions</span></p>
<p><b>CFA exam format:</b><span style="font-weight: 400;"> </span></p>
<p><b>The first session (2 hours, 15 minutes):</b><span style="font-weight: 400;"> 90 multiple choice questions, covering the topics of ethics & professional standards, quantitative methods, economics, and financial reporting and analysis </span></p>
<p><span style="font-weight: 400;"><strong>Second session (2 hours, 15 minutes)</strong>: 90 multiple choice questions, covering the topics of corporate finance, equity, fixed income, derivatives, alternative investments and portfolio management</span></p>
<p><b>Time limit:</b><span style="font-weight: 400;"> 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.</span></p>
<h2><b>What is on the CFA Exam?</b></h2>
<ul>
<li><span style="font-weight: 400;">Ethical and Professional Standards</span></li>
<li><span style="font-weight: 400;">Quantitative Methods</span></li>
<li><span style="font-weight: 400;">Economics</span></li>
<li><span style="font-weight: 400;">Financial and Reporting Analysis</span></li>
<li><span style="font-weight: 400;">Corporate Finance</span></li>
<li><span style="font-weight: 400;">Equity Investments</span></li>
<li><span style="font-weight: 400;">Fixed Income</span></li>
<li><span style="font-weight: 400;">Derivative Investments</span></li>
<li><span style="font-weight: 400;">Alternative Investments</span></li>
<li><span style="font-weight: 400;">Portfolio Management </span></li>
</ul>
<h3><span style="font-size: 14pt;"><b>Ethics and Professional Standards</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Corporate Finance</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Economics</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Financial Reporting and Analysis</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Quantitative Methods</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Alternative Investments</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Derivatives</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Equity Investments</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h3><span style="font-size: 14pt;"><b>Fixed Income</b></span></h3>
<p><span style="font-weight: 400;">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%.</span></p>
<h3><span style="font-size: 14pt;"><b>Portfolio Management</b></span></h3>
<p><span style="font-weight: 400;">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.</span></p>
<h2><b>Tips and tricks</b></h2>
<ul>
<li><span style="font-weight: 400;">Do NOT ignore Ethics, thinking that it is one of those questions that don’t require much reading. Only discovered your mistake during the practice exam period (1-2 months before exam date) and scrambled to cover that topic. However, Ethics isn’t intuitive and you have to learn it sometimes.</span></li>
<li><span style="font-weight: 400;">Study from other test takers - Always good to check out the common patterns in past exams. </span></li>
<li><span style="font-weight: 400;">Master your calculator - whether it is BA II Plus or HP12C, ensure by the time exam time comes you’re comfortable, fast yet accurate with it. It’s worth checking out the BA II Plus and HP12C calculator tips to make sure you don’t miss anything out. Also, clear your work before you begin a new calculation for a question. </span></li>
<li><span style="font-weight: 400;">Practice - Given the multiple-choice nature of Level 1, the more questions you can try the better to maximize studying. It is best to permit at least 1 month before exams to focus on this, as you will always discover new parts that you need more work on. </span></li>
</ul>
<ul>
<li><span style="font-weight: 400;">Exam time management is key – Level 1 is about the breadth and you have to be ruthless in time management (1.5 minute max / multiple-choice question), before you fall into this slippery slope and not be able to recover ground. Give yourself to mull over questions, but once times up, select an answer and move on! There are no penalties for incorrect answers, therefore guessing is better than leaving it blank.</span></li>
<li><span style="font-weight: 400;">Take care of yourself - Take care of your well-being by gaining some balance between study, play, and sleep. </span></li>
</ul>
<h2><b>CFA Exam FAQs</b></h2>
<h3><span style="font-size: 14pt;"><b>What is CFA Level 1 Expected salary?</b></span></h3>
<p><span style="font-weight: 400;">The total exam fees for CFA Level 1 are US$1,150-$1,450, including training</span></p>
<p><span style="font-weight: 400;">A one-off enrolment fee of US$ 450, plus</span></p>
<p><span style="font-weight: 400;">Exam registration fee of US$700-1,000 depending on how early you register.</span></p>
<h3><span style="font-size: 14pt;"><b>How to Study for the CFA Level I Exam</b></span></h3>
<ul>
<li><b>Manage your time</b><span style="font-weight: 400;">: CFA exams need a serious time commitment. To aim for consecutive passes in a short time, at least 300 study hours over a 6 month period is recommended. This means a minimum of 11.5 hours of study over a 7 day week. </span></li>
<li><b>Create a customized CFA study plan: </b><span style="font-weight: 400;">Depending on work/life commitments (here’s a few CFA Fast Track study plans as reference for different profiles), create a study plan that works for you.</span></li>
<li><b>Reserve the last 4-8 weeks for practice exams & revision</b><span style="font-weight: 400;">: Ensure you have covered the study material beforehand to have a proper go at the practice papers. </span><b>5 months before</b><span style="font-weight: 400;"> - spent this whole month just skimming through everything to get a feel of the materials.</span></li>
<li><b>3-4 months before</b><span style="font-weight: 400;"> - Reread the materials in detail and tried out the End of Chapter questions, noting down parts that you cannot understand fully or frequently got wrong.</span></li>
<li><b>2 months before</b><span style="font-weight: 400;"> - for question practice and last-minute material studies on areas that you needed more work on. </span></li>
<li><b>Last month </b><span style="font-weight: 400;">- the week or two before exams to fully focus on nailing the rest of your practice exams and rereading materials on areas you have noted you are weak in. </span></li>
</ul>
<h3><span style="font-size: 14pt;"><b>Should I Take the CFA Exam?</b></span></h3>
<p><span style="font-weight: 400;">Yes, CFA Exam help:</span></p>
<ul>
<li><span style="font-weight: 400;">Enhances Your Finance Career Path </span></li>
<li><span style="font-weight: 400;">Equips You With Graduate Level Knowledge in Finance. </span></li>
<li><span style="font-weight: 400;">It’s Affordable and a Good Return on Investment. </span></li>
<li><span style="font-weight: 400;">It Helps You Get A Job. </span></li>
<li><span style="font-weight: 400;">CFA Commands Higher Salary and Compensation Package, On Aggregate. </span></li>
</ul>
<h3><span style="font-size: 14pt;"><b>Does CFA Level 1 expire?</b></span></h3>
<p><span style="font-weight: 400;">It doesn't have an expiry date.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
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