CFA Institute CFA Level I Chartered Financial Analyst - CFA-Level-I Exam Questions [2026]

QUESTION NO: 1
Which of the following characteristics is not representative of an industry that's in the maturity stage of its life cycle?

A. Instead of product differentiation, price is the primary competitive weapon. B. There are a lot of companies from other industries entering into this particular industry. C. Competition is intense among the rivals within the industry.

Correct Answer: B

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QUESTION NO: 2
Which of the following temporary differences ordinarily creates a future tax asset?

A. Amortization of computer equipment B. Accrued warranty costs C. Installment sales

Correct Answer: B

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QUESTION NO: 3
Bridget's Midget Widget

Gross margin:

A. Has decreased as a percentage of sales. B. Has stayed the same, with rising sales offset by decreasing cost of goods sold. C. Has increased as a percentage of sales.

Correct Answer: C

QUESTION NO: 4
According to IFRS, in a sale-and-leaseback transaction, unless the fair (market) value of the asset at the time of sale is less than its undepreciated cost:

A. a gain from the sale should be deferred and amortized, but a loss should be recognized immediately. B. any gain or loss from the sale should be deferred and amortized over the term of the lease. C. any gain or loss from the sale should be recognized immediately.

Correct Answer: C

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QUESTION NO: 5
Which of the following statements concerning diversification is incorrect?

A. Proper diversification can eliminate market risk. B. The primary factor affecting the diversification of a portfolio is each security's covariance with the other securities in the portfolio. C. Diversification can reduce portfolio risk only if the security return correlation is less than 1.0.

Correct Answer: A

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QUESTION NO: 6
A mutual fund with an offering price of $23.50 and a 6% front-end load has a net asset value of:

A. $22.09 B. $22.17 C $24 91 C. $24.91

Correct Answer: A

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QUESTION NO: 7
Where would an investor find a company's management discussion of results of operations, capital resources, and outlook based on known trends?

A. Management discussion & analysis in Annual Report. B. Auditor's Opinion in Annual Report. C. SEC 8-K.

Correct Answer: A

QUESTION NO: 8
A bell-shaped, symmetrical frequency distribution has a mean of 45. If 95% of the observations on the variable fall between 30 and 60, the standard deviation of the variable is:

A. 7.50 B. 15.0 C. 5.00

Correct Answer: A

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