IACCP MASTER TEST PAPER 2026
QUESTIONS WITH ANSWERS GRADED A+
⩥ An investment adviser stopped advertising its small cap composite
performance in 2004. It must maintain all worksheets used to calculate
that performance through year end:
A. 2006
B. 2009
C. 2014
D. 2015. Answer: B. 2009
⩥ When aggregating proprietary trades with client trades, an investment
adviser must:
A. Refrain from allocating orders on a basis different from that specified
in the allocation statement.
B. Obtain the compliance officer's approval within three business days
after the day the order was allocated.
C. Prepare, before entering into an aggregated order, a written allocation
statement.
D. Disclose any additional compensation as a result of the aggregation..
Answer: C. Prepare, before entering into an aggregated order, a written
allocation statement.
,⩥ An investment adviser allocates trades by creating an alphabetical list
of all clients who will participate in a given trade. On one trade, the
adviser will allocate trades to clients whose names begin with A,
followed by those whose names begin with B, followed by those whose
names begin with C, etc. until all clients own the security or the security
is no longer available. On the next trade, the adviser reverses this
process, starting with clients whose names begin with Z, followed by
clients whose names begin with Y, etc. A client whose last name begins
with M learns of this procedure and complains to the adviser that he is
not being treated fairly.
Which statement is correct?
A. The client is being treated fairly because objective criteria are being
applied consistently.
B. The client is not being treated fairly because advisers must use a pro-
rata allocation method.
C. The client is not being treated fairly beca. Answer: C. The client is
not being treated fairly because he will never be among the first to trade.
⩥ Under the SEC Investment Adviser Codes of Ethics Rule, what is an
adviser required to do?
A. Impose fines or penalties for violations of the code.
B. Require annual recertification from each supervised person that they
have re-read the code.
C. Implement a training program on the principles and procedures
contained in the code.
,D. Require each supervised person to acknowledge in writing receipt of
the code.. Answer: D. Require each supervised person to acknowledge in
writing receipt of the code.
⩥ Which THREE activities are required of advisers under the
Investment Advisers Act of 1940 Compliance Programs Rule? (Choose
three.)
A. Adopt and implement written policies and procedures.
B. Designate a Chief Compliance Officer.
C. Review the policies and procedures on an annual basis.
D. Review past SEC deficiency letters.. Answer: A. Adopt and
implement written policies and procedures.
B. Designate a Chief Compliance Officer.
C. Review the policies and procedures on an annual basis.
⩥ Which situation would trigger a violation of the SEC Pay-to-Play
Rule?
A. A covered associate makes a $500 campaign contribution to an
elected official, who has influence in selecting advisers for a government
plan which the individual is also soliciting as an advisory client.
B. A covered associate makes a campaign contribution of $50 to the
Comptroller for the State of New York.
C. An investment advisory firm pays another registered investment
adviser to solicit government clients on its behalf.
, D. An investment adviser directs its counsel to make a campaign
contribution of $200 to a government elected official responsible for
selecting investment advisers.. Answer: A. A covered associate makes a
$500 campaign contribution to an elected official, who has influence in
selecting advisers for a government plan which the individual is also
soliciting as an advisory client.
⩥ Adviser manages securities and non-securities investments for four
very wealthy clients. Each client's portfolio is as follows:
Client 1 - $25 million in securities, $5 million in cash, and $20 million
in art
Client 2 - $25 million in securities, $5 million in cash, and $25 million
in art
Client 3 - $25 million in securities, $5 million in cash, and $30 million
in art
Client 4 - $25 million in securities, $5 million in cash, and $35 million
in art
How many of these clients can be included in the calculation of
Adviser's Regulatory Assets Under Management (RAUM)?
A. 1
B. 2
C. 3
D. 4. Answer: C. 3
QUESTIONS WITH ANSWERS GRADED A+
⩥ An investment adviser stopped advertising its small cap composite
performance in 2004. It must maintain all worksheets used to calculate
that performance through year end:
A. 2006
B. 2009
C. 2014
D. 2015. Answer: B. 2009
⩥ When aggregating proprietary trades with client trades, an investment
adviser must:
A. Refrain from allocating orders on a basis different from that specified
in the allocation statement.
B. Obtain the compliance officer's approval within three business days
after the day the order was allocated.
C. Prepare, before entering into an aggregated order, a written allocation
statement.
D. Disclose any additional compensation as a result of the aggregation..
Answer: C. Prepare, before entering into an aggregated order, a written
allocation statement.
,⩥ An investment adviser allocates trades by creating an alphabetical list
of all clients who will participate in a given trade. On one trade, the
adviser will allocate trades to clients whose names begin with A,
followed by those whose names begin with B, followed by those whose
names begin with C, etc. until all clients own the security or the security
is no longer available. On the next trade, the adviser reverses this
process, starting with clients whose names begin with Z, followed by
clients whose names begin with Y, etc. A client whose last name begins
with M learns of this procedure and complains to the adviser that he is
not being treated fairly.
Which statement is correct?
A. The client is being treated fairly because objective criteria are being
applied consistently.
B. The client is not being treated fairly because advisers must use a pro-
rata allocation method.
C. The client is not being treated fairly beca. Answer: C. The client is
not being treated fairly because he will never be among the first to trade.
⩥ Under the SEC Investment Adviser Codes of Ethics Rule, what is an
adviser required to do?
A. Impose fines or penalties for violations of the code.
B. Require annual recertification from each supervised person that they
have re-read the code.
C. Implement a training program on the principles and procedures
contained in the code.
,D. Require each supervised person to acknowledge in writing receipt of
the code.. Answer: D. Require each supervised person to acknowledge in
writing receipt of the code.
⩥ Which THREE activities are required of advisers under the
Investment Advisers Act of 1940 Compliance Programs Rule? (Choose
three.)
A. Adopt and implement written policies and procedures.
B. Designate a Chief Compliance Officer.
C. Review the policies and procedures on an annual basis.
D. Review past SEC deficiency letters.. Answer: A. Adopt and
implement written policies and procedures.
B. Designate a Chief Compliance Officer.
C. Review the policies and procedures on an annual basis.
⩥ Which situation would trigger a violation of the SEC Pay-to-Play
Rule?
A. A covered associate makes a $500 campaign contribution to an
elected official, who has influence in selecting advisers for a government
plan which the individual is also soliciting as an advisory client.
B. A covered associate makes a campaign contribution of $50 to the
Comptroller for the State of New York.
C. An investment advisory firm pays another registered investment
adviser to solicit government clients on its behalf.
, D. An investment adviser directs its counsel to make a campaign
contribution of $200 to a government elected official responsible for
selecting investment advisers.. Answer: A. A covered associate makes a
$500 campaign contribution to an elected official, who has influence in
selecting advisers for a government plan which the individual is also
soliciting as an advisory client.
⩥ Adviser manages securities and non-securities investments for four
very wealthy clients. Each client's portfolio is as follows:
Client 1 - $25 million in securities, $5 million in cash, and $20 million
in art
Client 2 - $25 million in securities, $5 million in cash, and $25 million
in art
Client 3 - $25 million in securities, $5 million in cash, and $30 million
in art
Client 4 - $25 million in securities, $5 million in cash, and $35 million
in art
How many of these clients can be included in the calculation of
Adviser's Regulatory Assets Under Management (RAUM)?
A. 1
B. 2
C. 3
D. 4. Answer: C. 3
