CFA Level 1 Practice Questions: What to Expect and How to Prepare (2026)
Exam Format and Structure
CFA Level 1 is a computer-based exam offered in testing windows throughout the year. The 180 questions are standalone — no item sets or case studies (those start at Level 2). Each question has three answer choices (A, B, C), and there’s no penalty for guessing. Every question is worth the same; there’s no partial credit.
Questions are distributed across topics according to the published weights. The exact number per topic varies by exam administration, but the approximate distribution looks like this:
| Topic | Weight | Approximate Questions | Question Style |
|---|---|---|---|
| Ethics | 15–20% | 27–36 | Scenario/judgment |
| Quantitative Methods | 6–9% | 11–16 | Calculation + concept |
| Economics | 6–9% | 11–16 | Concept + some calculation |
| Financial Reporting | 11–14% | 20–25 | Calculation + adjustment + analysis |
| Corporate Issuers | 6–9% | 11–16 | Concept + calculation |
| Equity Investments | 11–14% | 20–25 | Calculation + concept |
| Fixed Income | 11–14% | 20–25 | Heavily calculation |
| Derivatives | 5–8% | 9–14 | Calculation + concept |
| Alternative Investments | 5–8% | 9–14 | Mostly conceptual |
| Portfolio Management | 8–12% | 14–22 | Calculation + scenario |
Question Types by Topic
Ethics: Scenario-Based Judgment
Ethics questions present a situation — “An analyst discovers material non-public information during a company visit. She immediately…” — and ask you to identify the correct action under the Code and Standards. The answer is almost never the most extreme option. Practice reading scenarios carefully and mapping the situation to the specific Standard being tested. The most frequently tested Standards: Material Nonpublic Information (II.A), Loyalty/Prudence/Care (III.A), Suitability (III.C), and Misrepresentation (I.C).
Ethics can save (or sink) a borderline score — CFA Institute has stated that Ethics performance receives additional weight for candidates near the passing threshold.
Financial Reporting: Multi-Step Adjustments
FRA questions often require multiple steps: calculate a ratio, adjust for a different accounting method, then compare. Example: “Company A uses FIFO and Company B uses LIFO. After adjusting B to FIFO using the LIFO reserve, which company has the higher inventory turnover?” Practice converting between inventory methods, capitalizing vs. expensing, and adjusting for lease treatment. See the FRA page for the key IFRS vs. GAAP differences that are tested.
Fixed Income: Formula-Heavy Computation
Fixed Income has the most calculation-intensive questions. Typical asks: price a bond from spot rates, calculate YTM, compute modified duration, estimate price change using duration and convexity, derive a forward rate, or convert between yield periodicities. Speed comes from formula fluency — drill the formula sheet until the calculations are automatic.
Equity Investments: Valuation Models
Expect questions applying the Gordon Growth Model, multistage DDM, justified P/E, and EV/EBITDA. Also conceptual questions on market efficiency, anomalies, Porter’s Five Forces, and index construction. The valuation calculations are straightforward if you know the formulas; the conceptual questions test whether you understand the underlying logic.
Derivatives: Framework Application
Derivatives questions test whether you can apply the cost-of-carry framework (calculate a forward price), use put–call parity (find the missing component or identify arbitrage), and price options with the binomial model. Conceptual questions cover payoff profiles, embedded options, and the distinction between forward commitments and contingent claims.
Portfolio Management: CAPM and Behavioral Biases
Two distinct question types: quantitative (apply CAPM, calculate portfolio variance, compute Sharpe ratio) and qualitative (identify a behavioral bias from a scenario, classify IPS components). Both are testable and roughly equally weighted within the topic.
Practice Strategy: A Framework
Phase 1: Topic-by-Topic (Weeks 1–16)
As you study each topic, do the end-of-reading practice problems in the CFA Institute curriculum. These are directly aligned with the Learning Outcome Statements (LOS) and represent the closest approximation to actual exam questions. After each reading, review incorrect answers — understand why the right answer is right and why each wrong answer is wrong.
Phase 2: Question Banks (Weeks 13–17)
Supplement the curriculum problems with a third-party question bank. Aim for at least 1,500 additional questions. Filter by topic and focus on areas where you scored below 70% in Phase 1. The goal is to encounter every question type before exam day — no surprises.
Phase 3: Mock Exams (Weeks 16–18)
Take at least 3 full-length mock exams under timed conditions. The CFA Institute provides practice exams through the Learning Ecosystem — start there. After each mock, analyze your score by topic area. If you’re consistently below 60% in a topic, return to the curriculum and rework the fundamentals before taking another mock.
Time Management on Exam Day
90 questions in 135 minutes = 90 seconds per question. That’s tight. Here’s how to manage it:
First pass (0–100 minutes): Work through all 90 questions. Answer every question you can within 60–90 seconds. If a question requires more than 90 seconds, mark it and move on. Don’t get stuck on any single question — the opportunity cost is too high.
Second pass (100–130 minutes): Return to marked questions. With the pressure of the first pass behind you, you’ll often see the path to the answer more clearly. Use process of elimination aggressively — if you can eliminate one choice, you have a 50% chance of guessing correctly.
Final 5 minutes: Verify that every question has an answer selected. There’s no penalty for guessing, so never leave a question blank.
Common Mistakes to Avoid
Reading too much, practicing too little. Candidates who spend 80% of study time reading and 20% on practice consistently underperform those who split 50/50 or even 40/60 in favor of practice. After your initial read-through of each topic, shift to practice-heavy study.
Ignoring weak topics. It’s tempting to spend time on topics you enjoy and avoid the ones you struggle with. The exam doesn’t care about your preferences — it tests all topics. If you’re weak in FRA or Fixed Income (the two most-failed topics), that’s where your marginal study hour has the highest return.
Not simulating exam conditions. Taking a mock exam at home with breaks, snacks, and no time pressure doesn’t simulate the real experience. Take at least one mock under strict conditions: timed, no breaks during each session, approved calculator only, no notes.
Perfectionism on individual questions. Some questions are designed to be difficult — they’re there to separate top scorers from the rest. If a question is taking too long, pick your best guess and move on. Getting 3 easier questions right is better than getting 1 hard question right.
Key Takeaways
- 180 multiple-choice questions, two sessions of 90 questions each, 135 minutes per session. Three answer choices, no penalty for guessing.
- Aim for 2,000+ practice questions before exam day: curriculum problems, question banks, and mock exams.
- Do end-of-reading problems as you study each topic. Add question bank drilling in the final weeks. Take 3+ timed mocks.
- Ethics is scenario-based and can save a borderline score. FRA and Fixed Income are the most computation-heavy. Alternatives is the most conceptual.
- Target 70%+ across all topics for a comfortable margin above the MPS.
- Time management: 90 seconds per question. First pass for confident answers, second pass for marked questions, never leave blanks.
- Practice with your approved calculator until keystrokes are automatic — this is a free performance boost.
Frequently Asked Questions
How many practice questions should I do?
At minimum 1,500 — ideally 2,000+. This includes curriculum end-of-reading problems (roughly 500–600 total), third-party question bank questions (800–1,200), and mock exams (540 questions across 3 mocks). The top quartile of successful candidates typically report completing over 2,500 questions.
Where do I find practice questions?
Start with the CFA Institute Learning Ecosystem — it includes all curriculum practice questions and mock exams as part of your registration. Third-party providers like Kaplan Schweser, Mark Meldrum, UWorld, and PrepMe offer additional question banks. Focus on providers whose questions are written to CFA Institute style and difficulty — not generic finance quizzes.
What’s the passing score?
CFA Institute doesn’t disclose the exact minimum passing score (MPS). It varies by exam administration and is set by a panel of experienced CFA charterholders after each exam. Historical analysis suggests the MPS is typically in the range of 60–65%. Aim for 70%+ to give yourself a comfortable margin.
Should I guess if I don’t know the answer?
Always. There’s no penalty for wrong answers. Even a random guess has a 33% chance of being correct. If you can eliminate one answer choice, your odds improve to 50%. Never leave a question blank.
Which topics have the hardest questions?
FRA and Fixed Income consistently rank as the most challenging because they combine conceptual understanding with multi-step calculations. Ethics is tricky in a different way — the scenarios are nuanced and multiple answers can seem plausible. Alternative Investments and Economics are generally considered the most straightforward.