CFA Level 1 Exam Questions & Answers 2026 (1–10)

Question 1

Under the CFA Institute Code of Ethics, members are required to act with which quality toward clients, employers, and the public?

TheoryPractice · Accepted Answer

Integrity, competence, and diligence. The Code of Ethics requires members to act with integrity, competence, diligence, and respect, placing the integrity of the profession and the interests of clients above their own personal interests.

Question 2

An analyst learns that a new securities regulation in her country is less strict than the relevant CFA Institute Standard. Which must she follow?

TheoryPractice · Accepted Answer

The CFA Institute Standard, because it is stricter. Standard I(A) requires members to comply with the more strict of applicable law or the Code and Standards. When the Standard is stricter than local law, the member must adhere to the Standard.

Question 3

Which act most clearly violates Standard I(D) Misconduct?

TheoryPractice · Accepted Answer

Being convicted of a crime involving fraud and dishonesty. Standard I(D) prohibits conduct involving dishonesty, fraud, or deceit, or any act that reflects adversely on professional reputation, integrity, or competence. A fraud conviction is a direct violation.

Question 4

A portfolio manager overhears, in an airport, two executives of a public company discussing an unannounced, material merger. The information is material and nonpublic. Under Standard II(A), the manager should:

TheoryPractice · Accepted Answer

Not trade on or cause others to trade on the information. Standard II(A) prohibits acting or causing others to act on material nonpublic information, regardless of how it was obtained. Accidental possession does not permit trading.

Question 5

Entering and quickly cancelling large orders to create a false impression of demand and move a stock's price is best described as a violation of:

TheoryPractice · Accepted Answer

Standard II(B) Market Manipulation. Standard II(B) prohibits practices that distort prices or artificially inflate trading volume to mislead market participants, including transaction-based manipulation such as spoofing.

Question 6

Standard III(A) requires that when a member has discretionary authority over a client account, the member must place:

TheoryPractice · Accepted Answer

The client's interests before their own. Standard III(A) Loyalty, Prudence, and Care requires members to act for the benefit of clients and place clients' interests before their employer's or their own interests.

Question 7

To comply with Standard III(B) Fair Dealing when disseminating a new investment recommendation, a firm should:

TheoryPractice · Accepted Answer

Communicate to all clients simultaneously to the extent practicable. Standard III(B) requires that members deal fairly and objectively with all clients when disseminating recommendations, communicating to all eligible clients on an equitable basis.

Question 8

Before making a recommendation to a client with an investment policy statement, Standard III(C) Suitability requires a member to ensure the investment is consistent with the client's:

TheoryPractice · Accepted Answer

Objectives, constraints, and overall portfolio context. Standard III(C) requires that recommendations fit the client's financial situation, constraints, risk tolerance, and objectives, and suit the basket as part of the total portfolio.

Question 9

Standard III(D) Performance Presentation requires that communications about investment performance be:

TheoryPractice · Accepted Answer

Fair, accurate, and complete. Standard III(D) requires members to make reasonable efforts to ensure performance information is fair, accurate, and complete, and not to misrepresent past results.

Question 10

Under Standard III(E) Preservation of Confidentiality, a member may disclose confidential client information when:

TheoryPractice · Accepted Answer

Disclosure is required by law or the client permits it. Standard III(E) requires keeping client information confidential unless it concerns illegal activities, disclosure is required by law, or the client permits disclosure.

CFA Level 1 Exam Questions & Answers 2026 (1–10)

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