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CFA® Program Level I · 2027

Prepare for the CFA® Program Level I exam

Worked solutions, calculator keystrokes and error diagnosis in the 2027 three-option format.

Designed by a CFA® charterholder

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Fixed Income

The finance ministry of the Republic of Ombrana sells its new 10-year bonds through a single-price (uniform-price) auction that accepts both competitive and non-competitive bids. Which statement about this auction is least likely accurate?

  • All winning competitive bidders receive the same yield, which is the highest yield the ministry accepts.
  • Non-competitive bidders are filled at the yield determined by the accepted competitive bids.
  • Each winning competitive bidder receives its own bid yield, so winners pay different prices.

Worked solution

The ministry ranks competitive bids from the lowest yield upward and accepts bids until the issue is filled; the last accepted yield is the stop-out yield. In a single-price auction all winners, competitive and non-competitive, receive that yield. A rule in which each winner receives its own bid yield applies to a multiple-price auction, not to this one.

Sample question (fictitious) with worked solution
Questions in the original English — as in the exam

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  • Worked solutions with BA II Plus keystrokes
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  • Four full practice exams (2 × 90 questions)
  • Explanations on request in 15 languages (AI translation)
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The Level I exam at a glance

  • 180 questions with three answer options
  • Two sessions of 90 questions, 2 h 15 min each
  • All questions carry equal weight; no deduction for wrong answers
  • Permitted calculators: TI BA II Plus (incl. Professional) and HP 12C (incl. Platinum)

Topic coverage

Weight ranges as published by CFA Institute for the 2027 curriculum. Source

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Questions in the original English — as in the exam

1.

Mariela Etcheverry-Tan builds a probability tree for next year's dividend of Pukeko Ferries. In the first stage, fuel prices are either high (probability 0.40) or low (probability 0.60). If fuel prices are high, the board raises the dividend with probability 0.25. In her tree, what is the probability that fuel prices are high and the board raises the dividend?

2.

An analyst compares Solvberg Assurance, an IFRS 9 reporter, with Prairie Hollow Insurance, a US GAAP reporter. Each insurer holds a 3% stake in a listed company that is not held for trading, and Solvberg has not elected to measure its stake at fair value through other comprehensive income. Prairie Hollow classifies its corporate bond portfolio as held-to-maturity. Which statement about where the insurers report these items' gains and losses is least likely correct?

3.

Ioana Vrânceanu, a rates analyst at Bucegi Bank, is pricing a new three-year plain-vanilla interest rate swap with annual settlement. Annual-compounding spot rates are 3.15% for one year, 3.70% for two years and 4.05% for three years. The fixed swap rate is closest to:

4.

An analyst covering Lukwago Sugar Estates, a listed sugar producer financed with bank loans and common shares, summarizes what each stakeholder group mainly seeks from the company. Which summary is least likely accurate?

5.

Which of the following comparisons of business structures is accurate?

6.

Teuila Fa'amausili uses annual data to regress the percentage change in regional sales of residential solar panels (Y) on the percentage change in retail electricity tariffs (X). The sample covariance between X and Y is 18.5, the sample variance of X is 12.5, the mean of X is 4.2% and the mean of Y is 9.6%. If electricity tariffs rise by 7.5% next year, what is the regression's forecast of the change in solar panel sales?

7.

Aino Paasikivi holds her entire equity allocation in shares of Brennick Savings Bank. She argues that she should expect a higher return on these shares than a well-diversified investor who holds the same shares, because she bears more risk. Under capital market theory, the expected return on the Brennick shares is most likely:

8.

Maristella Skincare has always sold its products to wholesalers, which resell them to pharmacies. It now plans to sell directly to consumers through its own online store, at the same retail prices that pharmacies charge. Which effect on Maristella's margins should an analyst expect from this change in its business model?

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Who is behind it

Designed by Robert Hang, CFA. The learning design, topic map and quality standards were developed by a CFA® charterholder. Questions and explanations are generated with AI and checked by independent AI reviewers against these standards.

Robert Hang is the founder of Valmont Partners and author of a published M&A handbook.

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