CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
All of the following statements generally describe passively managed
investment funds, EXCEPT:
A. Funds that use a passive strategy manage to market benchmark
B. Passive investment managers believe in market efficiency
C. Passive funds generally offer significantly more revenue sharing than
other investment options
D. Passive funds generally have lower investment costs than actively
managed funds - ANSWERS-C
Louis is a plan advisor who is preparing for his initial meeting with the
Investment Committee of a new client. While reviewing previous
meeting minutes, he notices that the Committee wants to expand its core
fund line-up. In the upcoming meeting, Louis may discuss all the
following issues regarding a prudent investment selection process,
EXCEPT:
A) It is a best practice to document the process used for selecting the
new investments.
B) A plan is required to offer passively managed funds as part of an
expanded core line-up.
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1
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
C) It is prudent to review the investment policy statement before making
changes to the investment line-up.
D) Expanding the core line-up is a fiduciary responsibility, but it does
not need to be performed by a 3(21) or 3(38) advisor. - ANSWERS-B
All the following are prudent practices for creating an investment policy
statement (IPS), EXCEPT:
A. A plan advisor may assist the plan fiduciaries in drafting an IPS
B. An IPS should outline a prudent process for the monitoring of
investments
C. An IPS should avoid the specificity that can be a "roadmap for a
lawsuit"
D. An IPS must include a listing of all investments offered by the plan -
ANSWERS-D
All the following are characteristics of asset allocation funds, EXCEPT:
A. Target date funds automatically shift their asset allocation as a
participant advances toward retirement
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2
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
B. Lifestyle funds do not accommodate a participant's change in risk
tolerance
C. Target date funds may not always be consistent with the participant's
risk profile
D. Target date funds and target risk funds both have glide paths -
ANSWERS-D
All the following are concepts that advisors should explain to Plan
Sponsors about their duty to diversity plan investments and minimize the
risk of large losses, EXCEPT:
A. How asset classes work
B. What constitutes a prudent asset allocation strategy
C. Plans must include alternative investments
D. Meeting different risk and retirement goals of participants -
ANSWERS-C
All of the following are attributes of an effective Retirement Plan
Committee, EXCEPT:
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3
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
A. Members must commit to serve for a three year period
B. Number of members are an odd number to facilitate voting process
C. Members use a Fiduciary checklist when performing their duties
D. Meetings are held at least annually - ANSWERS-A
All of the following are actions of an effective Retirement Plan
committee, EXCEPT:
A. Establishing a retirement plan committee charter
B. Using a template investment policy statement for investment
oversight
C. Creating a list of committee resonsibilities
D. Holding regularly scheduled meetings - ANSWERS-B
All of the following statements are best practices for fiduciary training,
EXCEPT:
A. Developing a Fiduciary checklist for Retirement Plan committee
members
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PAGE
4
ANSWERS 2026 - 2027
All of the following statements generally describe passively managed
investment funds, EXCEPT:
A. Funds that use a passive strategy manage to market benchmark
B. Passive investment managers believe in market efficiency
C. Passive funds generally offer significantly more revenue sharing than
other investment options
D. Passive funds generally have lower investment costs than actively
managed funds - ANSWERS-C
Louis is a plan advisor who is preparing for his initial meeting with the
Investment Committee of a new client. While reviewing previous
meeting minutes, he notices that the Committee wants to expand its core
fund line-up. In the upcoming meeting, Louis may discuss all the
following issues regarding a prudent investment selection process,
EXCEPT:
A) It is a best practice to document the process used for selecting the
new investments.
B) A plan is required to offer passively managed funds as part of an
expanded core line-up.
END OF
PAGE
1
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
C) It is prudent to review the investment policy statement before making
changes to the investment line-up.
D) Expanding the core line-up is a fiduciary responsibility, but it does
not need to be performed by a 3(21) or 3(38) advisor. - ANSWERS-B
All the following are prudent practices for creating an investment policy
statement (IPS), EXCEPT:
A. A plan advisor may assist the plan fiduciaries in drafting an IPS
B. An IPS should outline a prudent process for the monitoring of
investments
C. An IPS should avoid the specificity that can be a "roadmap for a
lawsuit"
D. An IPS must include a listing of all investments offered by the plan -
ANSWERS-D
All the following are characteristics of asset allocation funds, EXCEPT:
A. Target date funds automatically shift their asset allocation as a
participant advances toward retirement
END OF
PAGE
2
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
B. Lifestyle funds do not accommodate a participant's change in risk
tolerance
C. Target date funds may not always be consistent with the participant's
risk profile
D. Target date funds and target risk funds both have glide paths -
ANSWERS-D
All the following are concepts that advisors should explain to Plan
Sponsors about their duty to diversity plan investments and minimize the
risk of large losses, EXCEPT:
A. How asset classes work
B. What constitutes a prudent asset allocation strategy
C. Plans must include alternative investments
D. Meeting different risk and retirement goals of participants -
ANSWERS-C
All of the following are attributes of an effective Retirement Plan
Committee, EXCEPT:
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PAGE
3
, CPFA QUESTIONS AND LATEST
ANSWERS 2026 - 2027
A. Members must commit to serve for a three year period
B. Number of members are an odd number to facilitate voting process
C. Members use a Fiduciary checklist when performing their duties
D. Meetings are held at least annually - ANSWERS-A
All of the following are actions of an effective Retirement Plan
committee, EXCEPT:
A. Establishing a retirement plan committee charter
B. Using a template investment policy statement for investment
oversight
C. Creating a list of committee resonsibilities
D. Holding regularly scheduled meetings - ANSWERS-B
All of the following statements are best practices for fiduciary training,
EXCEPT:
A. Developing a Fiduciary checklist for Retirement Plan committee
members
END OF
PAGE
4
