CFA Level 1 Calculation Workbook: 300 Calculations to Prepare for the CFA Level 1 Exam (2025 Edition)

Contents

Section 1: Quantitative Methods

Questions

Answer Key

Section 2: Economic Analysis

Questions

Answer Key

Section 3: Financial Statement Analysis

Questions

Answer Key

Section 4: Corporate Finance & Portfolio Management

Questions

Answer Key

Section 5: Equity & Fixed Income Investments

Questions

Answer Key

Section 6: Derivatives & Alternative Investments

Questions

Answer Key

Section 1

Quantitative Methods

Questions

1. Assume that Security A has a standard deviation of 4.1% and Security B has a standard deviation of 9.3%. If the covariance of the returns is 19.37, then the correlation coefficient between the two securities is:

A. 0.452.

B. 0.508.

C. 0.571.

2. William purchased an investment for $600. He kept the investment for 5 years before selling it. If the internal rate of return for the 5-year period was 9%, the final selling price is:

A. $923.17.

B. $925.20.

C. $927.44.

3. Alpha Corporation’s investment of $3.4 million produces the following cash flows:

Year 1: $2.1 million

Year 2: $2.2 million

Year 3: $1.6 million

If the discount rate is 7%, the investment’s net present value (NPV) is:

A. $1.67 million.

B. $1.79 million.

C. $1.92 million.

4. A security has a coefficient of variation of 1.27 and a standard deviation of 13%. The expected return of the security is:

A. 10.236%.

B. 10.546%.

C. 10.690%.

5. Jane has been investing $2,000 at the end of each year for the past 11 years. Assuming she has earned 8% compounded annually on her investments, she has accumulated:

A. $32,893.72.

B. $33,290.97.

C. $34,252.07.

6. Beta Investment Company quotes an annual interest rate of 6.00%. If that rate is equal to an effective annual rate of 6.17%, then the investment company is compounding interest:

A. daily.

B. monthly.

C. quarterly.

7. Sam purchased an investment for $30,000. He expects it will increase in value at a rate of 12% compounded annually for the next 4 years. If his expectations are correct, at the end of the fourth year his investment will be worth:

A. $41,465.72.

B. $44,299.24.

C. $47,205.58.

8. Delta Corporation manufactured 6.86 million units of product in 2016. Four years earlier, the company manufactured 7.33 million units. The compound annual growth rate of units manufactured from 2012 to 2016 is:

A. –1.64%.

B. –1.57%.

C. –1.44%.

9. Beth wants to accumulate $95,000 in 7.5 years to purchase a rental property. She expects to earn an annual rate of 9.5% compounded quarterly. To achieve her goal, the amount that she needs to invest today is:

A. $46,979.26.

B. $47,443.78.

C. $48,193.15.

10. Steven’s portfolio has a mean return of 15%, a standard deviation of 7%, and a beta of 2.0. If the risk-free rate of return is 4%, the portfolio’s Sharpe ratio is:

A. 0.06.

B. 1.57.

C. 1.85.

11. Gamma Corporation loans money at a quoted annual interest rate of 5.00%. If interest is compounded daily, the effective annual rate is:

A. 5.127%.

B. 5.465%.

C. 5.917%.

12. A leading trade publication reports that Epsilon stock has a short interest of 5,869,121 shares, with an average daily trading volume of 4,018,472. The average declining volume is 2,102,554. The short interest ratio for Epsilon stock is:

A. 1.46 days.

B. 1.91 days.

C. 2.79 days.

13. Rose sued her former employer and won a judgment that provides her $2,000 at the end of each 6-month period for the next 5 years. If the account that holds her settlement earns an average annual rate of 7% compounded semiannually, the employer was initially required to pay Rose:

A. $15,270.36.

B. $16,633.21.

C. $17,917.34.

14. The average annual return and the standard deviation for three investments is provided in the following table:

Based on the coefficient of variation, the riskiest investment is:

A. Security A.

B. Security B.

C. Security C.

15. Michael purchased an investment for $315,000, which earned a return of –2% in the most recent year. In the previous three years, the investment returns were 5%, –1%, and 6%, respectively. Assuming all income has been reinvested, the standard deviation of the rates of return for the investment over the last four years is:

A. 4.08%.

B. 8.33%.

C. 16.67%.

16. Evelyn expects to receive $150,000 from an irrevocable trust in 7 years. If the trust is earning an annual rate of 10% compounded quarterly, its current value is:

A. $75,131.67.

B. $77,376.11.

C. $80,361.42.

17. Brett, an analyst, has identified four stocks that meet his criteria for inclusion in his portfolio. Of those stocks, he will purchase only three this year. The number of different groups of three stocks that are possible is:

A. 3.

B. 4.

C. 5.

18. Katrina’s portfolio has a Sharpe ratio of 0.55, and a mean return of 4.6%. If the 30-day T-bill rate is 2.0%, the standard deviation of return on Katrina’s portfolio is:

A. 4.5%.

B. 4.6%.

C. 4.7%.

19. In a normal distribution, the percent of observations that lie between plus and minus one standard deviation from the mean, plus and minus two standard deviations from the mean, and plus and minus three standard deviations from the mean, respectively, is:

A. 50%, 68%, 95%.

B. 68%, 95%, 99%.

C. 75%, 95%, 99%.

20. Karl has been investing $2,000 at the end of each 6-month period to accumulate funds for his daughter’s college tuition. The funds are earning an annual rate of 6% compounded semiannually. When Karl’s daughter begins college in 7 years, the account will be worth:

A. $30,163.55.

B. $32,126.38.

C. $34,172.65.

21. Renee purchases a share of Zeta stock for $39.10 and receives a dividend of $1.05 one year later. If the share of stock is sold for $42.30 immediately following the dividend payment, the holding period return is:

A.