Free CFA Level 3 Mock Exams

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For those who are one of the candidates of CFA Level 3, of course you will need many practice questions to pass the Exam. Now, you are able to try doing CFA Level 3 Mock Exams. For your information, CFA Level 3 Mock Exams is a 2 hour 12 minutes, 44 questions practice exam. This is a proper mock exam, rather than independent question-bank-type questions because it uses the item-set and vignette format which is the same as the actual CFA Level 3 exam session.

Free CFA Level 3 Mock Exams

Here are some questions of CFA Level 3 Mock Exams:

  1. Which of the principles is inconsistent with the Asset Manager Code of Professional Conduct?
    A. Principle 1.
    B. Principle 2.
    C. Principle 3.
  2. Which of the principles is inconsistent with the Asset Manager Code of Professional Conduct?
    A. The risk management process.
    B. Portfolio information.
    C. Business-continuity plan.
  3. Which of Nathan’s client service policies is consistent with the Asset Manager Code of Professional Conduct?
    A. Performance reports frequency.
    B. Complete, accurate disclosures, including complex calculations.
    C. Conflicts of interests’ disclosures.
  4. Are the firm’s disclosures regarding management fees consistent with the required and recommended standards of the Asset Manager Code?
    A. Yes.
    B. No, because the average or expected expenses or fees clients are likely to incur are not mentioned.
    C. No, because complicated language is used.
  5. The economic forecasting approaches Jaffer and Arnaud most likely use are:
    A. Checklist approach and LEI.
    B. Reduced-form models and checklist approach.
    C. Structural models and LEI.
  6. Which of the following biases does Wu exhibit?
    A. Status quo, confirmation, overconfidence.
    B. Prudence, availability, look-ahead.
    C. Survivorship, time period, availability.
  7. Regarding the effect of the “horizon structure” of inflation on various assets, which of Jaffer’s notes is least likely correct?
    A. Note I.
    B. Note II.
    C. Note III.
  8. If the Eurozone country’s central bank responds with a reaction function based on the Taylor. Rule and correctly calibrate the policy rate, which of the following will most likely occur?
    A. Short term rates will fall faster, but growth and inflation may decline less.
    B. Short term rates, growth and inflation will decline rapidly.
    C. Short term rates will fall rapidly but growth and inflation rates will remain steady.
  9. Which of the following behavioural biases is most likely demonstrated by Mrs. Wentworth?
    A. Conservatism bias.
    B. Confirmation bias.
    C. Availability bias.
  10. Which of the following behavioural biases is most likely demonstrated by Jack Black?
    A. Illusion of knowledge bias.
    B. Self-attribution bias.
    C. Hindsight bias.
  11. Which of the following bias (es) did Henry Tillman NOT demonstrate?
    A. Anchoring and adjustment bias.
    B. Status quo bias.
    C. Endowment bias.
  12. Which of the following is not a typical consequence of mental accounting bias?
    A. Allocating funds to different buckets.
    B. Neglecting to focus on total return and total risk.
    C. A higher risk profile in the portfolio due to pursuit of higher returns
  13. In Shah’s portfolio optimization proposals, which model inputs may be used with no Adjustment?
    A. Correlation of returns.
    B. Expected returns.
    C. Standard deviation of returns.
  14. Based on Exhibits 1 & 2, a significant reduction in the high-yield (HY) bonds in the after-tax Asset mix may be because of:
    A. Lower income returns of the HY bonds.
    B. Heavier tax burden imposed on HY bonds.
    C. Lower correlation between HY bonds and IG bonds.
  15. Based on Exhibits 1 & 2, a higher allocation to investment-grade (IG) bonds in the after-tax asset mix may be because of:
    A. Lower income returns of the IG bonds.
    B. Lower risk than HG bonds and lower correlation with equity.
    C. Higher correlation with HG bonds than equity.
  16. Given its funding objectives, which asset allocation is most appropriate for Minerva’s defined-benefit pension plan?
    A. Allocation 1.
    B. Allocation 2.
    C. Allocation 3.
  17. Regarding discretionary TAA, Shah is least likely correct with respect to:
    A. Comment 1.
    B. Comment 2.
    C. Comment 3.
  18. Regarding the immediate tactical asset allocation demand, the behavioural bias most likely exhibited by the client is:
    A. Loss aversion.
    B. Home bias.
    C. Representativeness bias.
  19. Following the discussion between Johnsons and Connors and Note 1, Connors is most likely to recommend to Mike to increase his exposure to:
    A. Risk-free assets.
    B. Risky assets.
    C. Lifetime insurance.
  20. Considering the discussion and Note 2, Connors is least likely to recommend which of the following investments to Sara?
    A. Equities.
    B. Bonds.
    C. Life insurance.
  21. Which of the following statements best answers Sara’s question about life insurance and her job?
    A. Life insurance and her job have a similar payoff.
    B. Life insurance is a perfect hedge for her human capital in the event of death.
    C. Her need for life insurance increases as she gets closer to retirement.
  22. An advanced life deferred annuity (ALDA) would provide the greatest supplemental level income relative to the cost because:
    A. It involves the permanent exchange of a lump sum for an insurance contract that promises to pay an income in a down market.
    B. payments begin later when life expectancy is shorter, and some policyholders will die without receiving payments.
    C. it provides many potential investment options for an individual to choose from in exchange for a lump sum of money today.
  23. Which of the following strategies should Connors recommend to Hendricks?
    A. 100% stocks, 0% bonds
    B. 70% stocks, 30% bonds
    C. 10% stocks, 90% bonds
  24. One month ago, Benton most likely sold:
    A. ARS 14,500,000 forward at an all-in forward rate of ARS/USD 8.7229
    B. ARS 15,000,000 forward at an all-in forward rate of ARS/USD 8.7334
    C. ARS 15,000,000 forward at an all-in forward rate of ARS/USD 8.7074
  25. To rebalance the hedge today, the firm would least likely need to:
    A. buy ARS 500,000 forward.
    B. engage in a mismatched FX swap.
    C. sell ARS500,000 forward.

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