The Level I exams include 240 total multiple choice questions, 120 on the morning session of the exam and 120 on the afternoon session. Each multiple choice question is free-standing (not dependent on other questions) and has three possible answers: A, B, and C. All questions are equally weighted and there is no penalty for guessing.
While you are taking the Level I multiple choice exam, remember:
Formatting Conventions Used for Level I Exams
- Carefully manage your time. Don’t spend too much time on any one question or topic area. On average, you should allocate 1.5 minutes to each multiple choice question, including time to record your answer on the answer sheet.
- Read the questions carefully. A careless “skimming” of the question may lead you to a completely different, and incorrect, answer.
- Read each item carefully and eliminate obviously incorrect answers. If you have to guess and you can eliminate one of the responses, your odds of answering the question correctly are much higher. There is no penalty for guessing.
- Mark your answers on the answer sheet as
you complete each question. Some candidates mark their answers in the
exam book and wait until the end of the exam to complete the answer
sheet. This is not an advisable strategy.
- Expect to encounter questions that you will not be able to answer correctly. There is a great deal of material to master and exam questions are challenging. Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. For a full description of how the MPS is established, see The CFA Program: Our Fifth Decade (PDF).
- Examination writers use a standard set of formatting conventions on the multiple choice questions. Many sample exams produced by third parties do not follow these conventions, so review the CFA Institute format presented below.
- Familiarize yourself with the instructions for filling out your answer sheet (PDF). Instructions are also available at the time of the exam.
Each item on the Level I multiple choice exam consists of a stem (question, statement, and/or table) and three choices, A, B, and C.
Two basic formats are used:
- Stems using sentence completion with three unique choices
- Stems phrased as questions with three unique choices
Example 1 (Stem using sentence completion)
An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that company’s
A. return on assets.
B. debt-to-equity ratio.
C. interest coverage ratio.
Example 2 (Stem phrased as question)
An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that company’s financial statements?
A. Return on assets.
B. Debt-to-equity ratio.
C. Interest coverage ratio.
The Level I CFA exam does not use except, true, or false in item stems and avoids the use of not in item stems whenever possible. When appropriate, stems will include one of the following qualifiers: most likely, least likely, best described, most appropriate, most accurate, least appropriate, or least accurate. Each stem supports only one item on the exam.
The Level I CFA exam does not use any of the following choices: all of the above, none of the above, A and B only, B and C only, cannot determine, cannot calculate, or not enough information to determine.
Choices consisting of words or sentences are typically ordered from shortest to longest; choices that are quantitative are ordered from the smallest number to largest number. The choices agree grammatically with the stem; language common to all choices is placed in the stem.