CFA Level 1 Free Practice Test

1. The early 21st century saw a few significant stresses on the stock market. The markets dipped deeper and more quickly than many were expecting might happen.

Which of the following statistical metrics most accurately describes this event?

2. Keisha is looking to avoid purchasing power risk as much as possible. She should consider investing in which type of security?

3. You are provided with the following information on a non-callable, non-convertible preferred stock:

Face value: USD50
Annual dividend: USD2.50
Maturity: Perpetual
Embedded options: None
Required rate of return: 6.25%

The intrinsic value of this stock is closest to:

4. Management fees in private equity are ________ those in hedge funds in that _________.

5. A 10 Year semi-annual 8% coupon bond is selling at USD967. If the yields increase by 50 basis points the price is expected to fall to USD924 and if the yields decrease by 50 Basis points the price is expected to rise to $1010.

The effective duration is closest to: