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CFA ®
Free Resources

Use the Study Materials that Work for You

The Princeton Review’s Level I CFA® self-paced course features over 50 hours of professional and concise lecture videos. Each video lecture is custom-matched with reinforcing study notes. We have curated a selection of video clips and study notes below to see what it’s like to study with The Princeton Review. All three levels of the CFA® exam are very challenging and competitive, so it’s imperative Charter Candidates find the best study methods and material for their individual needs.
video still shot with play button for CFA
How to calculate depreciation expenses and remaining book value using the Texas Instrument BA2+ calculator
  • Basic, advanced and most commonly used calculations

  • Depreciation calculation: straight-line depreciation method versus double declining balance method

  • Tip: It’s great practice to always clear your sheet before starting a new calculation

video still shot with play button for CFA
The time value of money: practice question-different interpretation of interest rates
  • Breaking down how to read and interpret CFA practice questions.

  • Deep dive into a long form practice question

  • Time value of money: Different interpretation of interest rates

video still shot with play button for CFA
Understanding income statement: diluted EPS due to stock options
  • Diluted earnings per share (EPS) due to stock options

  • Formulas and steps to calculate diluted EPS

  • Examples of dilutive stock options

12 Easy questions from Level I CFA® Curriculum

Click below to see if you can
figure out these 12 easy questions

Start Quiz

1.  Amanda Blue, CFA®, is explaining to a group of students the difference between ethical conduct and legal requirements. Which of the following statements would Blue most likely make to the students:

A. There is no difference between ethical conduct and legal requirements

B. Ethical conduct sets a higher standard of behavior than laws and regulations

C. All legal actions are ethical

Next

2.  Fill in the gap. ___________ possesses specialized skills and knowledge, a pledge to serve others in society, and a common code of standards and ethics.

A. An occupation.

B. A vocation.

C. A profession.

Back

Next

3.  Since inception, a fund has realized returns of 4%, 8%, 6%, 9%, and -2%. The arithmetic return of the fund over the five-year period is closest to:

A. 5.00%

B. 4.92%

C. -5.10%

Back

Next

4.   Which of the following statements is most likely correct?

A. The first decile exceeds the first quartile

B. The 50th percentile is equal to the median

C. The first quartile is no different than the 75th percentile

Back

Next

5.  How many 3 letter words you can make with 8 letters?

A. 56

B. 336

C. 20

Back

Next

6.  Event B can only happen if Event A happens first, therefore, the two events are most likely:

A. Dependent

B. Mutually Exclusive

C. Independent

Back

Next

7.  An analyst randomly chooses 150 companies and collects each company’s sales data for 2017. This data is best characterized as:

A. Longitudinal data

B. Time-series data

C. Cross-sectional data

Back

Next

8.  When the price of coffee increased by 10%, the demand for tea increased by 5%. Which of the following best describes the relationship between coffee and tea?

A. inferior goods

B. substitutes.

C. complements.

Back

Next

9.  Which of the following best describes a monopoly market?

A. Standardized products and very low barriers to entry.

B. Many sellers in the market with low barriers to entry.

C. Considerable pricing power and very high barriers to entry.

Back

Next

10.  Which of the following is least likely a function of a central bank? A central bank -

A. is the banker to the government and other banks

B. is the lender of last resort

C. conducts fiscal policy

Back

Next

11.  Which of the following is the equation of a balance sheet?

A. Assets – Liabilities = Owners’ Equity

B. Assets + Revenues = Owners’ Equity

C. Liabilities + Assets = Owners’ Equity

Back

Next

12.  If you invested $5,000 in a fund at 5% annual rate, how many years will it take to double your money?

A. 12.4 years

B. 14.2 years

C. 18.2 years

Back

Submit

 

You got   out of 12 correct.

Great job! You have enough fundamental knowledge to start prepping for the CFA®.

Check out our promotionally free-of-charge
Mock Exam and 50 trickiest questions.

Check Mock Exam and Quiz

Also for a limited time, our CFA® Program course will feature our Money-Back Assurance – pass the Level I CFA® exam or your money back.*

Learn More >

You are on your way, but practice makes perfect!

Check out our promotionally free-of-charge
Mock Exam and 50 trickiest questions.

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Solutions

Question 1

Amanda Blue, CFA®, is explaining to a group of students the difference between ethical conduct and legal requirements. Which of the following statements would Blue most likely make to the students:

  • A. There is no difference between ethical conduct and legal requirements
  • B. Ethical conduct sets a higher standard of behavior than laws and regulations
  • C. All legal actions are ethical

Solution:
B is correct because new rules and regulations often result from recent instances of what is considered as unethical behavior. Ethical standards are beyond the requirement of laws and regulations.
A is incorrect because there are many differences between ethical and legal standards.
C is incorrect because some legal actions might be unethical. For example, recommending an investment in a relative’s firm without disclosure might be legal in some countries, but it is always unethical.
Study Session 1
Reading 1: Ethics and Trust in the Investment Profession

Question 2

Fill in the gap. ___________ possesses specialized skills and knowledge, a pledge to serve others in society, and a common code of standards and ethics.

  • A. An occupation.
  • B. A vocation.
  • C. A profession.

Solution:
C is correct. A profession has several characteristics that distinguish it from an occupation or vocation, such as specialized knowledge and skills, service to others, and a code of ethics shared by its members.
Study Session 1
Reading 1: Ethics and Trust in the Investment Profession

Question 3

Since inception, a fund has realized returns of 4%, 8%, 6%, 9%, and -2%. The arithmetic return of the fund over the five-year period is closest to:

  • A. 5.00%
  • B. 4.92%
  • C. -5.10%

Solution:
A is correct. The arithmetic return is calculated as the mean of the five returns, which is (4%+8%+6%+9%-2%)/5=5%.
B is incorrect because it is the geometric return, which is calculated by [(1+4%) *(1+8%) *(1+6%) *(1+9%) *(1-2%)] ^ (1/5)-1=4.92%.
C is incorrect because it is the solution to: [4%*8%*6%*9%*(-2%)] ^ (1/5) = -5.10%.
Study Session 2
Reading 7: Statistical Concepts and Market Returns

Question 4

Which of the following statements is most likely correct?

  • A. The first decile exceeds the first quartile
  • B. The 50th percentile is equal to the median
  • C. The first quartile is no different than the 75th percentile

Solution:
B is correct. The median is always at the middle of any data set and the 50th percentile is also the mid-point of a data set. Therefore, the median is the 50th percentile.
A is incorrect. The first decile (10th percentile) can not exceed the first quartile (25th percentile).
C is incorrect. The first quartile (25th percentile) is different than 3rd quartile (75th percentile).
Study Session 2
Reading 7: Statistical Concepts and Market Returns

Question 5

How many 3 letter words you can make with 8 letters?

  • A. 56
  • B. 336
  • C. 20

Solution:
B is correct because this is a permutation problem (order matters) So, nPr = 8! /(8-3)! = 336
A is incorrect because it is calculated as combination (order does not matter), so 8!/ [(8-3)! 3!] = 56
C is incorrect because it is calculated as (8-3)!/3! = 20
Study Session 2
Reading 8: Probability Concepts

Question 6

Event B can only happen if Event A happens first, therefore, the two events are most likely:

  • A. Dependent
  • B. Mutually Exclusive
  • C. Independent

Solution:
A is correct. Events are considered dependent if the occurrence of one event impacts the probability of the other event.
B is incorrect. Events that are Mutually Exclusive cannot occur at the same time and it is unclear if Events A and B can occur at the same time, therefore dependent is a better answer choice.
C is incorrect. Events are considered independent if the occurrence of one event does not impact the probability of the other event.
Study Session 2
Reading 8: Probability Concepts

Question 7

An analyst randomly chooses 150 companies and collects each company’s sales data for 2017. This data is best characterized as:

  • A. Longitudinal data
  • B. Time-series data
  • C. Cross-sectional data

Solution:
A is incorrect because longitudinal data tracks the same sample at different points in time, where the data here comes from one point in time.
B is incorrect because time-series data is collected at discrete and equally spaced time intervals, where the data here comes from one point in time.
C is correct because cross-sectional data comes from a single point in time with observations across different individuals or groups.
Study Session 3
Reading 10: Sampling and Estimation

Question 8

When the price of coffee increased by 10%, the demand for tea increased by 5%. Which of the following best describes the relationship between coffee and tea?

  • A. inferior goods
  • B. substitutes
  • C. complements

Solution:
B is correct. When the demand for tea increased, it was in response to the increased price of coffee. If we calculate the cross-price elasticity of demand for these goods, we would get a positive number, and therefore can conclude that the two goods, are in fact substitutes.
A is incorrect. Inferior goods relate to the income elasticity of demand rather than the cross-price elasticity.
C is incorrect. For coffee and tea to be complements, the increased price of coffee would lead to a decreased demand for tea. This is because the goods are thought to be consumed in conjunction.
Study Session 4
Reading 12: Topics in Demand and Supply

Question 9

Which of the following best describes a monopoly market?

  • A. Standardized products and very low barriers to entry.
  • B. Many sellers in the market with low barriers to entry.
  • C. Considerable pricing power and very high barriers to entry.

Solution:
C is correct. With a monopoly, typically one firm has considerable pricing power and the market has very high barriers to entry.
A is incorrect. It describes perfect competition.
B is incorrect. It is the case under monopolistic competition.C is incorrect. For coffee and tea to be complements, the increased price of coffee would lead to a decreased demand for tea. This is because the goods are thought to be consumed in conjunction.
Study Session 4
Reading 13: The Firm and Market Structures

Question 10

Which of the following is least likely a function of a central bank? A central bank -

  • A. is the banker to the government and other banks
  • B. is the lender of last resort
  • C. conducts fiscal policy

Solution:
C is correct. Central banks conduct monetary policy and controls the money supply in the economy. They do not conduct fiscal policy.
B is incorrect. Central banks act as the lender of the last resort whenever any financial institution is under distress.
A is incorrect. Central banks provide banking services to the government as well as other banks.
Study Session 5
Reading 16: Monetary and Fiscal Policy

Question 11

Which of the following is the equation of a balance sheet?

  • A. Assets – Liabilities = Owners’ Equity
  • B. Assets + Revenues = Owners’ Equity
  • C. Liabilities + Assets = Owners’ Equity

Solution:
A is correct because a firm’s assets should always be financed by liabilities and owners’ equity.

Question 12

If you invested $5,000 in a fund at 5% annual rate, how many years will it take to double your money?

  • A. 12.4 years
  • B. 14.2 years
  • C. 18.2 years

Solution:
B is correct. We can either use a formula or the financial calculator. Using a formula: 5,000 x (1.05)n = 10,000. Solving for n gives us 14.2 years.
Using financial calculator, Texas Instrument BA 2+: I/Y = 5, PV = -5000, PMT = 0, FV = 10,000 CPT N = 14.2

Habits that Prepare You for Level I CFA® Exam

Study Tips

  • Make sure you read ALL the Learning Objective Statements (LOS)
  • The CFA® is becoming a more conceptual test with more narrative questions than calculation questions
  • Know your calculator
  • Practice! Do not save practice questions for the day before
  • Trust your instincts

Important Notes and Tips on the Test

  • All questions are multiple choice with 3 answer options
  • Keep in mind you have an average of 1.5 minutes to answer each question
  • On the day of the exam: come early, calm and well-rested
  • Do not leave any questions blank – always guess as a last resort

Level I CFA Exam
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  • 3,150+ practice questions with detailed solutions
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  • 4 mock exams that resemble real Level I CFA exam, and more

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Study Tips

  • Make sure you read ALL the Learning Objective Statements (LOS)
  • The CFA® is becoming a more conceptual test with more narrative questions than calculation questions
  • Know your calculator
  • Practice! Do not save practice questions for the day before
  • Trust your instincts

Important Notes and Tips on the Test

  • All questions are multiple choice with 3 answer options
  • Keep in mind you have an average of 1.5 minutes to answer each question
  • The exam is divided into two parts: Morning (9am – 12noon) and Afternoon (2pm – 5pm). Each part is divided into sections starting with the Ethics section.
  • On the day of the exam: come early, calm and well-rested
  • Do not leave any questions blank – always guess as a last resort

Frequently Asked Questions

Q: What study habits help you pass the Level I CFA®?
A: For starters, practice makes perfect. We highly encourage all test takers to practice until they are comfortable with the exam material. Specifically, take mock exams to understand the conceptual-focused exam questions. When reviewing the material, pay attention to the Learning Outcome Statements (LOS). And lastly, trust yourself!
Q: How do I create a Level I CFA® study method?
A: We believe that study methods are personal to every student. We want students to try different study methods and chose what works best for them. There is no right answer; it is about tailoring the methods to your individual learning and studying styles.
Q: How much should I practice for the Level I CFA®?
A: We encourage students to practice until they feel comfortable with the content. With over 3,000+ practice questions and two full-length mock exams, we practice what we preach!
Q: How long should I prepare for CFA® Exams?
A: The CFA® Institute recommends 300 hours of studying per exam level.
Q: Use a trusted partner for CFA® Prep
A: We have an excellent track record of guiding students and test-takers through countless exams from elementary and middle school to professional exams such as the Charter Financial Analyst (CFA®) Exam. We will guide you through the exam with proven test-taking strategies, world-class study materials, guides, and videos. Sign up now and start studying today to become an expert!

Level I CFA Program Pass Assurance*

Your guide to passing Level I CFA exam.

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