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300Hours: CFA Level 1 Mock ExamThis Chartered Financial Analyst (CFA®) Mock Exam has 90 questions, courtesy of IFT.
To best simulate the exam day experience, candidates are advised to allocate an average of 1.5
minutes per question for a total of 135 minutes (2 hours 15 minutes) for this session of the exam.
Once completed, please submit your answers at https://3h.rs/CFAL1Mock to get your score,
performance benchmark and answer explanations.
, 300Hours.com
1. Ethical and Professional Standards
Sumita Khatri wrote a research report and followed the necessary due diligence steps before
sharing the report with her client. It turned out that there was a mistake in the report. This was
pointed out by her client. Khatri apologized and re-submitted the corrected report.
Did Khatri violate any CFA Institute Standards?
A. No.
B. Yes, relating to performance presentation.
C. Yes, relating to misconduct.
2. Ethical and Professional Standards
Aryana Reid, CFA, is a private wealth manager. She writes a popular blog called “Aryana’s
Investments” that has several thousand subscribers. The objective of the blog is to attract new
clients; every post is also sent as an e-mail to its subscribers. The blog posts are usually a detailed
analysis about her investment recommendations and actions.
Recently, Reid issued a sell recommendation for Jubilant Inc. However, a few days after publishing
her initial recommendation, she decides to change the recommendation from sell to buy based on
some new information.
In order to comply with the CFA Institute Standards, which of the following is the most appropriate
method for disseminating the change in investment recommendation?
A. Publish the post and send it as a mail to the blog subscribers.
B. Publish the post, send a mail to blog subscribers and email her clients simultaneously.
C. Email her clients first.
3. Ethical and Professional Standards
Kent Miller is an investment adviser at UBN Investments, who is registered to take Level I of the
CFA Exam. He meets with Carrie Hartford, a new client of the firm, who has just moved her account
from Northern Investment Bank. She tells Miller that she has read about derivatives and would like
to invest in them. Miller explains the upside potential and downside risks of some strategies with
derivatives and recommends protective put for her portfolio.
To be consistent with the CFA Institute Standards, Miller should:
A. determine Hartford’s needs, objectives, and tolerance for risk before making a
recommendation.
Submit your answers at https://3h.rs/CFAL1Mock to get your score,
performance benchmark and answer explanations
2
, 300Hours.com
B. explain to Hartford in detail about the characteristics of his firm and the investment
vehicles it offers, including the nature of the industry.
C. explain to Hartford his recent candidacy in the CFA Program, and its importance within the
investment community.
4. Ethical and Professional Standards
Justin Zoghlin, CFA, was hired as a wealth manager to manage the $2 billion estate of a family in
Oklahoma a year ago. He was given the flexibility to choose his working hours. When Zoghlin took
the job, he served as the President of his religious community that conducted social welfare
programs on a regular basis. In addition, he managed the investments for his large extended
family. He did not get paid for his religious community activity or the family investments. Seeing
the impressive returns he generated, his friends persuaded him to manage their investments, as
well.
Now, a year later, he has stopped serving the religious community. He manages investments for
non-family members, but charges 10% of the portfolio value as his fee. Zoghlin has not informed
his employer of any of these activities.
With regard to which of the business activities, has Zoghlin least likely violated the CFA Institute
Standards of Professional Conduct?
A. Serving the religious community.
B. Managing non-family investments.
C. Managing family investments.
5. Ethical and Professional Standards
Rani Kaporwala, CFA, an analyst at Smart Securities, has just finished writing a newsletter to the
firm’s clients about a new investment strategy involving derivatives. Due to the complex nature of
the strategy designed to manage risk and the different trading patterns involved in various
economic scenarios, Kaporwala decides to include only the top three liquid securities, with
relatively lower volatility in the market to explain the strategy. She consequently withholds
information regarding the portfolio construction and valuation scheme.
Has Kaporwala violated any CFA Institute Standards?
A. No.
B. Yes, relating to communications with clients and prospective clients.
C. Yes, relating to fair dealing.
Submit your answers at https://3h.rs/CFAL1Mock to get your score,
performance benchmark and answer explanations
3
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