CFA starter diagnostic
Choose your level, answer ten prompts, and turn observed mistakes into your next practice task. No pass prediction.
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Level I: ten diagnostic prompts
Answer, check the explanation, then open your topic recap. This is not a calibrated exam or pass prediction. Writing is self-reviewed, not graded.
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MCQ correct
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Observed topic recap · 0 to review
Review the topics with missed answers first. Unanswered topics are unknown, and written self-review is not a correctness score.
- Ethics
0 correct · 0 to review · 1 unanswered MCQs
- Time value of money
0 correct · 0 to review · 1 unanswered MCQs
- Economics
0 correct · 0 to review · 1 unanswered MCQs
- Financial statement analysis
0 correct · 0 to review · 1 unanswered MCQs
- Corporate issuers
0 correct · 0 to review · 1 unanswered MCQs
- Equity valuation
0 correct · 0 to review · 1 unanswered MCQs
- Fixed income
0 correct · 0 to review · 1 unanswered MCQs
- Derivatives
0 correct · 0 to review · 1 unanswered MCQs
- Alternative investments
0 correct · 0 to review · 1 unanswered MCQs
- Portfolio management
0 correct · 0 to review · 1 unanswered MCQs
- Question 1 of 10EthicsMultiple choice
An analyst receives confidential earnings information from a client director before publication. What should the analyst do?
Answer and explanations
Do not act or cause others to act on material nonpublic information. Escalate through the appropriate compliance process rather than treating client benefit as an exception.
- A: Client priority does not permit acting on material nonpublic information.
- B - correct: Preserve the restriction on acting on material nonpublic information.
- C: Passing the information to induce trading is also a problem.
- Question 2 of 10Time value of moneyMultiple choice
What is the value today of a certain 1,331 payment due in three years, discounted at 10% annually?
Answer and explanations
PV = 1,331 / 1.10^3 = 1,000. Match the annual discount rate to the three annual periods.
- A - correct: Discount 1,331 by 1.10 cubed to return to time zero.
- B: This discounts only one year instead of three.
- C: This compounds the future payment instead of discounting it.
- Question 3 of 10EconomicsMultiple choice
A currency depreciates and an imported input is invoiced at an unchanged foreign-currency price. All else equal, what happens to its domestic-currency cost?
Answer and explanations
Depreciation increases the domestic-currency amount needed for a fixed foreign-currency invoice, before any hedging or repricing response.
- A: A weaker domestic currency buys less of the invoicing currency.
- B: The invoice is fixed in foreign currency, not domestic currency.
- C - correct: More domestic currency is needed to pay the same foreign amount.
- Question 4 of 10Financial statement analysisMultiple choice
A company has current assets of 450 and current liabilities of 300. What is its current ratio?
Answer and explanations
The current ratio is 450 / 300 = 1.50 times. This ratio alone does not establish when assets will convert to cash.
- A: This divides liabilities by assets, reversing the ratio.
- B - correct: 450 divided by 300 equals 1.50.
- C: 150 is the currency difference, not the liquidity ratio.
- Question 5 of 10Corporate issuersMultiple choice
A project costs 100 now and pays 115 in one year. With a 10% required return, what is its NPV?
Answer and explanations
Discount the future payment once: NPV = -100 + 115 / 1.10 = 4.55, rounded to two decimals. The initial outlay is at time zero.
- A - correct: 115 / 1.10 - 100 is approximately 4.55.
- B: This subtracts cash flows without discounting the future receipt.
- C: This compounds the receipt instead of discounting it.
- Question 6 of 10Equity valuationMultiple choice
A stable company will pay a dividend of 4 next year. With a 10% equity return requirement and 2% perpetual growth, what is the Gordon value?
Answer and explanations
V0 = D1 / (r - g) = 4 / 0.08 = 50. The dividend is already next year's payment, so do not grow it again.
- A: Adding growth to the discount rate is not the Gordon denominator.
- B: This ignores perpetual dividend growth.
- C - correct: 4 / (0.10 - 0.02) equals 50.00.
- Question 7 of 10Fixed incomeMultiple choice
A bond has modified duration 4. If its yield rises by 25 basis points, what is the approximate price change, ignoring convexity?
Answer and explanations
Use ΔP/P ≈ -Dmod × Δy = -4 × 0.0025 = -1%. This linear estimate ignores convexity and assumes unchanged cash flows.
- A: The positive sign reverses the duration effect of a yield increase.
- B - correct: -4 × 0.0025 equals -0.01, or -1%.
- C: 25 basis points is 0.0025 as a decimal yield change.
- Question 8 of 10DerivativesMultiple choice
A long call expires with the stock at 62 and strike 55. What is its payoff before premium and costs?
Answer and explanations
The payoff is max(ST - K, 0) = 7. Profit would additionally subtract the premium and any relevant costs.
- A - correct: The call payoff is max(62 - 55, 0).
- B: A long option cannot have a negative exercise payoff.
- C: The strike still has to be paid upon exercise.
- Question 9 of 10Alternative investmentsMultiple choice
Which constraint most directly distinguishes a closed-end private investment fund from a daily-dealing public fund?
Answer and explanations
Limited exit opportunities and uncertain cash-flow timing create liquidity risk. They do not establish that private funds necessarily outperform or protect capital.
- A: Private investment does not guarantee preservation of capital.
- B: Closed-end private funds generally do not offer equivalent daily redemption.
- C - correct: Capital commitments and exit constraints create meaningful liquidity risk.
- Question 10 of 10Portfolio managementMultiple choice
A portfolio invests 25% in an asset expected to earn 12% and 75% in an asset expected to earn 4%. What is its expected return?
Answer and explanations
The weighted expected return is 6%. This is an expectation under the input assumptions, not a guaranteed realized result.
- A: This equally weights the two returns instead of using the stated portfolio.
- B - correct: 0.25 × 12% + 0.75 × 4% equals 6%.
- C: Adding asset returns ignores the allocation weights.
Keep this checklist handy
What to do, at a glance
01Read your result
- Missed MCQs identify observed review targets.
- Unanswered topics remain unknown.
- Written self-review does not count as correctness.
02Know the sample
- Ten prompts per level/pathway selection.
- Questions are distinct from the full practice pages.
- Level III: 5 shared labelled core MCQs + 5 pathway writing tasks.
03Take the next step
- Review a missed topic using the formula reference.
- Try the matching public practice sample.
- Create your account to continue practicing in the app.
Put one idea into practice.
Try it first. Check the reasoning. Pick your next task.
Quick answers
Can ten questions predict whether I will pass?
No. The sample is too small and has no calibrated relationship to exam outcomes. A correct answer or completed written self-review is not evidence of full syllabus mastery.
Can I sign up from this preview?
Yes. Sign up to create your account and practice in the app. Public exercises remain available without an account; answers from this preview are not transferred.
Sources
Selected 2026 teaching content. Official sources do not endorse or verify these examples.
- CFA Institute Level II format (new tab)
- CFA Institute Level III format and response guidance (new tab)
- CFA Institute specialized pathway structure and selection (new tab)
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