TheoryFree CFA Level 1 Practice Test
Take a free CFA Level 1 practice test for 2026 with questions, answers, explanations, PDF download and timed mock exam links.
CFA Level 1 Questions
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Q1Under the CFA Institute Code of Ethics, members are required to act with which quality toward clients, employers, and the public?
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✓ Correct answer: Integrity, competence, and diligence
The Code of Ethics requires members to act with integrity, competence, diligence, and respect, placing the integrity of the profession and the interests of clients above their own personal interests.
Q2An analyst learns that a new securities regulation in her country is less strict than the relevant CFA Institute Standard. Which must she follow?
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✓ Correct answer: The CFA Institute Standard, because it is stricter
Standard I(A) requires members to comply with the more strict of applicable law or the Code and Standards. When the Standard is stricter than local law, the member must adhere to the Standard.
Q3Which act most clearly violates Standard I(D) Misconduct?
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✓ Correct answer: Being convicted of a crime involving fraud and dishonesty
Standard I(D) prohibits conduct involving dishonesty, fraud, or deceit, or any act that reflects adversely on professional reputation, integrity, or competence. A fraud conviction is a direct violation.
Q4A portfolio manager overhears, in an airport, two executives of a public company discussing an unannounced, material merger. The information is material and nonpublic. Under Standard II(A), the manager should:
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✓ Correct answer: Not trade on or cause others to trade on the information
Standard II(A) prohibits acting or causing others to act on material nonpublic information, regardless of how it was obtained. Accidental possession does not permit trading.
Q5Entering and quickly cancelling large orders to create a false impression of demand and move a stock's price is best described as a violation of:
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✓ Correct answer: Standard II(B) Market Manipulation
Standard II(B) prohibits practices that distort prices or artificially inflate trading volume to mislead market participants, including transaction-based manipulation such as spoofing.
Q6Standard III(A) requires that when a member has discretionary authority over a client account, the member must place:
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✓ Correct answer: The client's interests before their own
Standard III(A) Loyalty, Prudence, and Care requires members to act for the benefit of clients and place clients' interests before their employer's or their own interests.
Q7To comply with Standard III(B) Fair Dealing when disseminating a new investment recommendation, a firm should:
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✓ Correct answer: Communicate to all clients simultaneously to the extent practicable
Standard III(B) requires that members deal fairly and objectively with all clients when disseminating recommendations, communicating to all eligible clients on an equitable basis.
Q8Before making a recommendation to a client with an investment policy statement, Standard III(C) Suitability requires a member to ensure the investment is consistent with the client's:
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✓ Correct answer: Objectives, constraints, and overall portfolio context
Standard III(C) requires that recommendations fit the client's financial situation, constraints, risk tolerance, and objectives, and suit the basket as part of the total portfolio.
Q9Standard III(D) Performance Presentation requires that communications about investment performance be:
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✓ Correct answer: Fair, accurate, and complete
Standard III(D) requires members to make reasonable efforts to ensure performance information is fair, accurate, and complete, and not to misrepresent past results.
Q10Under Standard III(E) Preservation of Confidentiality, a member may disclose confidential client information when:
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✓ Correct answer: Disclosure is required by law or the client permits it
Standard III(E) requires keeping client information confidential unless it concerns illegal activities, disclosure is required by law, or the client permits disclosure.
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