Updated: June 08, 2021

CFA Exam: Level 2 / FREE ITEM SETS

## FREE Sample Level 2 CFA® Exam Questions

To better prepare for the level 2 CFA exam:

### EQUITY Question

IQ Partners is a small advisory boutique located in Paris, France, and founded in 1999 by Sam Tsui and Giselle Pout, both CFA charterholders. Before they started IQ Partners, Tsui and Pout, worked as consultants for one of the largest national investment banks. Thanks to this experience, they possess wide knowledge about various economic and investment concepts. They are also fond of strong ethical attitude. The key activities of IQ Partners include company valuations, mainly for M&A purposes, and weekend financial markets and valuation theories classes. Sam Tsui and Giselle Pout are well-known community organizers and speak in many conferences and seminars devoted to equity valuation and lead training sessions both for students and professionals...

### DERIVATIVES Question

Andrew Star, level II CFA candidate, is preparing for the upcoming CFA exam he has enrolled in. He is currently reviewing derivatives. To check how much he already knows, he decides to have a go at some problems that he thinks likely to appear in the exam. He is pretty sure that in the exam there will be some questions related to calculating prices of forwards on: indices, stocks paying dividends, FRAs, or fixed income securities. Star chooses a couple of numerical problems related to different forward contracts he found in a financial magazine. He gathers the following pieces of information: The value of WIG Index equals 51,982. The continuously compounded dividend yield amounts to 2.4%. The continuously compounded risk-free interest rate is 5.5%...

### Alternative Investments Question

Amanda and Sue are both level II CFA candidates. They decided to study together in order to be better prepared for the exam. After each reading, they both prepare a true/false test. Recently, they have covered the material on private equity valuation. They have divided their test into six sessions, each including two statements: one prepared by Amanda and one prepared by Sue. Below, there are twelve statements made by the candidates: Session 1, Statement 1: A greater use of debt by PE companies results in a transfer of risk to the debt buyer and an increase in the company’s efficiency. Session 1, Statement 2: PE companies characterized by a high leverage level benefit from an increased interest tax shield. Session 2, Statement 3...

### CORPORATE FINANCE Question

Agnes Fisher is a junior consultant at Finance Advisory Group (FAG). She graduated from Capital Investments and Corporate Financing Strategies Department at a prestigious university. Agnes passed the first level of the CFA examination last year and now she is preparing to sit for her level II exam. FAG works for several big companies, both public and private. One of its clients is MedicPlus, one of the fastest growing companies providing medical services and distributing drugs. MedicPlus seeks advice regarding two problems. First of all, the expansion of the company forces it to change their corporate governance in order to better regulate fiduciary responsibilities of its managers. The second matter is connected to the planned distribution of...

### PORTFOLIO MANAGEMENT Question

Megan Templer, CFA, is an employee with an asset management company. At the end of this month, she is to present a management plan for Chicago Safe Growth Fund 1 (CSGF 1) in front of the company’s investment committee. Some of the characteristics of CSGF 1 are as follows: The fund is to provide a constant growth of net worth; The variance of its assets’ returns should not be significant; The majority of the fund’s portfolio is made up by large companies from well-developed industries. Templer decides to use the arbitrage pricing theory in order to quantify risk and estimate rates of return. At the investment committee meeting, she begins with outlining her investment strategy and describing the APT. She presents the following assumptions of the theory...