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Test Prep CFA-Level-I Exam Questions
CFA® Level I Chartered Financial Analyst (Page 64 )

Updated On: 28-Feb-2026
Page 64 of 793
PDF with 3963 Questions

Under Standard IV (B.6), Prohibition against Misrepresentation, a member may discuss a "guaranteed" investment, as long as that investment is which of the following?

  1. domestic stocks
  2. foreign stocks
  3. medium-term notes
  4. long-term bonds
  5. none of these answers
  6. short-term Treasury securities

Answer(s): F

Explanation:

Standard IV (B.6) prohibits statements that an investment is "guaranteed", or that superior returns can be expected in the future based on the member repeating past success. It does not preclude truthful statements on investments with guaranteed returns, such as some insurance contracts, short-term Treasury securities and insured bank deposits.



According to the AIMR-PPS, performance must be calculated

  1. before or after the deduction of trading expenses, as long as that information is disclosed.
  2. before or after the deduction of trading expenses, without the need for disclosures because there will be no difference in the numbers.
  3. before the deduction of trading expenses.
  4. after the deduction of trading expenses.

Answer(s): D

Explanation:

Performance must be calculated after the deduction of trading expenses (e.g., broker commissions and SEC fees), if any. This is a requirement for calculation of returns.



What is the effective date for compliance with the AIMR-Performance Presentation Standards for discretionary fee-paying portfolios meeting the definition of a wrap-fee account?

  1. January 1, 1997
  2. July 1, 1994
  3. July 1, 1995
  4. January 1, 1995

Answer(s): C

Explanation:

From July 1, 1995, going forward, all of the firm's actual discretionary fee-paying portfolios meeting the definition of a wrap-fee account must be presented in composites that adhere to the Standards.



Connery, a smart professional, passed his Level II CFA exam 2 years ago. He could not take the Level III exam due to professional time commitments elsewhere. He is thinking of taking Level III a couple of years from now, once things settle down on his personal front. His resume, which he has sent to a few prestigious firms, states that he is a candidate in the CFA program and has successfully completed Level II exam. He makes no exaggerated claims about his abilities on his resume. Connery has:

  1. violated Standard II (A) - Use of Professional Designation. He cannot claim to be CFA - Level II.
  2. not violated any standards.
  3. violated Standard II (A) - Use of Professional Designation. He cannot claim to be in the CFA program since he is not registered to take Level III exam.
  4. violated Standard II (A) - Use of Professional Designation. He cannot claim to be in the CFA program without having completed the Level III exam.

Answer(s): C

Explanation:

Standard II (A) - Use of Professional Designation, states that a person must be registered to take the next higher level of the exam to be a "candidate" in the CFA program.



Standard IV (B.4) deals with ________.

  1. Disclosure of Conflicts to Clients and Prospects
  2. Prohibition against Misrepresentation
  3. None of these answers
  4. Disclosure of Referral Fees
  5. Priority of Transactions
  6. Prohibition against Use of Material Nonpublic Information
  7. Preservation of Confidentiality
  8. Performance Presentation

Answer(s): E

Explanation:

Standard IV (B.4) deals with the priority of transactions of clients and employers over transactions in investments in which the member is the beneficial owner.



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