Test Prep CFA Level 1 Certification Practice Test Questions, Test Prep CFA Level 1 Exam Dumps
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For those who want to reach one of the highest distinctions in the investment management profession and obtain the CFA (Chartered Financial Analyst) designation, they need to follow the CFA program offered by the CFA Institute. By getting this charter, you will be able to prove that you have all the required skills to thrive in the competitive investing industry. It also gives you the real-world skills and expertise in investment analysis. To complete the program, you need to follow the three-part exam and start with the CFA Level 1 test.
CFA Level 1: Prerequisites
To enroll for the program and be able to deal with the first step, you need to meet the required qualifications. First of all, you should know that there are three options when a potential candidate can go for it. They are the following:
- Having a bachelor’s degree – You need to have a completed bachelor's program or some equivalent program from the university or college and hold a degree;
- Being a final-year student – If you are a final-year student of a bachelor’s program on the day of applying for the CFA Level 1 test, you can become a candidate as well. However, your program should be completed before you apply for the CFA Level 2 exam;
- Having professional work experience – In this case, you need to have specialized education, knowledge, or advanced skills to enroll for the program. Besides that, you require to have a combination of higher education and 4,000 hours of work experience. Please note that the candidates need to have at least 3 sequential years of education before registering for the CFA Level 1 test. As for the professional skills, they should include business communications, time management, problem solving and critical thinking, adaptability, analytical thinking, teamwork and leadership, as well as professional judgement.
If you meet one of the requirements, you need to prepare that the program is available in the English language only and you should have a valid international travel passport. Also, it is important to complete a Professional Conduct Statement form and check if this program is not restricted in your country.
CFA Level 1: Structure & Format
CFA Level 1 is a computer-based test that contains 180 questions in total. They are of a multiple-choice type and will be divided into two sections with 135 minutes each. The parts will cover various topics of the program, so you need to be ready for them. Thus, the first portion comes with the topics of financial reporting & analysis, economics, ethics & professional standards, as well as quantitative methods. The second section includes the details of alternative investments & portfolio management, fixed income, corporate finance, derivatives, and equity. To pass the exam, you need to score at least 43% of the questions correctly.
CFA Level 1: Main Sections
All in all, there are 10 topics covered in the whole CFA program, and each test covers a certain weight of them. As for the Level 1 exam, the curriculum is the following:
- Ethical & Professional Standards
This domain will cover about 15-20% of the whole test. To answer the questions correctly, you need to know about the role of professionalism and ethics in the investment industry as well as ethical behavior.
- Quantitative Methods
The questions from this section include the quantitative techniques and concepts that are used in investment decision making and financial analysis. Also, it covers the details of descriptive statistics, central tendency, dispersion, characteristics of return distributions, and probability theory. The weight of the part is about 8-12%.
- Economics
This area is all about the fundamental concepts of supply and demand for the firms and individual consumers. The candidates should also learn about various market structures that the organizations operate in, macroeconomic principles and concepts, aggregate output, income measurement, economic growth factors, as well as aggregate demand and supply analysis. The part covers 8-12% of the overall content.
- Financial Reporting & Analysis
The subject covers the financial reporting procedures as well as the standards, which govern financial reporting disclosures. It emphasizes on the basic financial statements and how the alternative accounting methods affect them and their analysis. In addition, the primary financial statements are also included in the topic. There will be about 13-17% of the questions in the exam from this area.
- Corporate Finance
About 8-12% of the whole exam content will cover the details of corporate governance, financing and investing decisions, stakeholder management analysis, social and environmental considerations in investing, as well as the usage of leverage and management of the working capital required to meet the short-term operational needs.
- Equity Investments
The information about security markets, equity investments, indexes, usage of the basic equity valuation models, and analysis of equity securities, industries, and companies will cover 10-12% of the test.
- Fixed Income
In this section, a potential candidate should know about the fixed income securities and their markets, risk factors, valuation drivers and measurements, and yield measures. The skills in calculating yields and securitizing assets as well as the knowledge of the basic principles of credit analysis, fundamentals of risks and bond returns, and values of fixed income securities will be also evaluated. The weight of this part is about 10-12%.
- Derivatives
Only 5-8% of the exam questions will be covered in this domain. It includes basic derivatives and derivative markets, valuation concepts for forward commitments and essential features, and arbitrage, which links the derivative pricing to the price of the underlying asset.
- Alternative Investments
This is another topic that covers only 5-8% of the exam content. You need to be ready that it will test your knowledge of private equity, infrastructure, real estate, hedge funds, and commodities. You should also know about the alternative investments for diversifications and their common characteristics.
- Wealth Planning & Portfolio Management
The last section has 5-8% as well and covers the fundamentals of risk and portfolio management, portfolio planning, construction of the portfolio, risk measurement, and capital asset pricing model. It is also required to know how to combine the needs of institutional and individual investors with the available investment solutions.
CFA Level 1: Career Bonuses
Passing the CFA Level 1 test will provide you with the opportunity to proceed with the CFA program and gain a lot of benefits. Thus, it can give you waivers from the licensing exams in 27 countries as well as the possibility to enter the Investment Analysis and Portfolio Management fields. This means that you can become an Investment Officer, an Auditor, or a Senior Trader and earn an average salary of about $180,000 per year.
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