Cisco®
CompTIA
Checkpoint
ISC
EC-Council
EXIN
Fortinet
ITIL®
Juniper
Microsoft
VMware
Avaya
SAP
Google
Salesforce
Amazon
Palo Alto Networks
ISC2
Splunk®
ServiceNow®
All Vendors
  2. Home
  3. Exams
  4. Test Prep
  5. CFA-Level-I

CFA-Level-I: CFA® Level I Chartered Financial Analyst
Free Practice Exam Questions (page: 76)
Updated On: 2-Jan-2026

Page 76 of 496
PDF with 3963 Questions

Donald McKay, CFA, is analyzing a client's fixed income portfolio. As of the end of the last quarter, the portfolio had a market value of $7,545,000 and a portfolio duration of 6.24. McKay is predicting that the yield for ali of the securities in the portfolio will decline by 25 basis points next quarter. Which of the following statements regarding the portfolio's performance next quarter is most accurate?

  1. For the expected change in portfolio yield next quarter, the market value of the portfolio will change by approximately 6.24%.
  2. If the yield curve has a 50 basis point downward parallel shift next quarter, the portfolio will increase in value by approximately $235,404.
  3. The portfolio's ending value after the expected decline in yields will be approximately $7,427,298.

Answer(s): B



Kathy Hurst, CFA, is valuing a 4-year zero coupon security. She is provided the following information:
--------------------------------
6.0%
--------------------------------
7.3%
?
8.9%
-------------------------------
The 4-year spot rate is 7.5%.
Calculate the one-year forward rate two years from now ().

  1. 7.3%.
  2. 7.8%.
  3. 8.0%.

Answer(s): B



ABC Corporation has just issued $200 million of 6.5% $1,000 par value bonds at face value. Which of the following requirements in the indenture for these bonds would most likely be considered a negative covenant? ABC must:

  1. maintain its manufacturing equipment in good condition.
  2. make timely semiannual payments of interest and principal when due.
  3. have paid all bond coupon payments due before it can pay cash dividends.

Answer(s): C



Ron Travis, CFA, manages a portfolio of long-term and short-term bonds. The portfolio is equally weighted between 1-year, 2-year, 10-year, and 20-year maturities and currently has a portfolio duration equal to 7.0. Travis is concerned that 1- and 2-year interest rates are going to increase by 100 basis points while 10- and 20-

year rates decrease by 100 basis points. If his prediction is correct, Travis' measure of duration will be ineffective at predicting interest rate risk since portfolio duration is only accurate when the:

  1. yield curve does not shift.
  2. shift in the yield curve is parallel.
  3. yield curve steepens.

Answer(s): B



Which of the following best describes an option that gives the owner the right to sell 100 shares of stock only on the expiration date three months from now at a strike price of $35, when the current stock price is $25? This option is an:

  1. out-of-the-money American put option.
  2. in-the-money European put option.
  3. out-of-the-raoney European put option.

Answer(s): B



Roland Cad owns a portfolio of large capitalization stocks. He has a positive long term outlook for the stock market, but Carl is worried about the possible effects of recent changes in monetary policy. Carl would like to protect his portfolio from any sudden declines in the stock market, without selling his holdings. The most likely way for Carl to achieve his objective of limiting the downside risk of his portfolio is to:

  1. sell put options on the S&P 500.
  2. sell an S&P 500 futures contract.
  3. buy an S&P 500 forward contract.

Answer(s): B



Julia Chen, a portfolio manager for U.S.-based Dane Investments, has just established a short position in Swiss franc currency futures as part of a currency overlay strategy. The position consists of 100,000 contracts with an initial margin of $4,000, a maintenance margin of $2,500, and a contract price of 0.9120 USD/CHF. If the futures price on the subsequent two days is 0.9300, and 0.8928, respectively, what will be her margin account balance at the end of the second day?

  1. $4,000
  2. $6,200
  3. $7,720

Answer(s): B



Sue Wie, CFA, is the chief financial officer for Garth Company. The company will need to borrow S75 million in the near future to fund a plant expansion. Wie expects interest rates will rise and decides to hedge against this risk using a 3 * 6 LIBOR based forward rate agreement (FRA). The underlying rate for this FRA is:

  1. 60-day LIBOR.
  2. 90-day LIBOR.
  3. 180-day LIBOR.

Answer(s): B



Viewing page 76 of 496
Viewing questions 601 - 608 out of 3963 questions



Post your Comments and Discuss Test Prep CFA-Level-I exam prep with other Community members:

CFA-Level-I Exam Discussions & Posts