CFA® Level 3 Investment Practice Questions
The free CFA® Level 3 questions that deal with investment, with answers and explanations. The full bank and the timed practice test cover every topic the exam asks about.
Question #3
After an investment in a new startup, you notice rapid growth in revenue but also increasing cash burn. What should you investigate next?
Correct answer: C
Explanation
Investigating customer acquisition costs can indicate the sustainability of growth against the cash burn rate.
Question #7
A client wants to invest passively in a low-cost index fund. What should you explain about this investment strategy?
Correct answer: B
Explanation
While passive investing is cost-effective, it does expose investors to market risk, including potential declines.
Question #8
In a client meeting, you notice the client has little understanding of investment terms. What should your focus be?
Correct answer: B
Explanation
Simplifying terminology will help the client better understand their investments and your recommendations.
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