IACCP (QE) QUESTIONS WITH ACCURATE ANSWERS
Which activity is NOT mandated for investment advisers that store required
records electronically?
A. Providing the SEC with prompt access, retrieval, and reproduction.
B. Maintaining copies of all electronically stored records using WORM format.
C. Arranging and indexing records to provide easy access and retrieval.
D. Developing procedures to preserve and maintain records. Accurate
Answer - B. Maintaining copies of all electronically stored records using
WORM format.
The Investment Advisers Act of 1940 defines the scope of the anti-fraud
provisions as extending to:
A. SEC-registered advisers and foreign advisers with a place of business in the
U.S., whether registered or exempt.
B. SEC-registered advisers and foreign advisers doing business in the U.S.,
whether registered or exempt.
C. SEC-registered investment advisers.
D. All investment advisers, whether registered or exempt. Accurate
Answer - D. All investment advisers, whether registered or exempt.
Which THREE persons or firms may be excluded from having to register
under the Investment Advisers Act of 1940? (Choose three.)
A. Accountants whose advisory services pertain solely to incidental financial
planning.
B. Persons or firms whose advice and reports are related solely to U.S.
government securities.
C. Publishers of generally circulated, bona fide newspapers or financial
journals.
D. Domestic banks and bank holding companies. Accurate Answer - B.
Persons or firms whose advice and reports are related solely to U.S.
government securities.
C. Publishers of generally circulated, bona fide newspapers or financial
journals.
,D. Domestic banks and bank holding companies.
The fiduciary duty imposed on advisers under the Investment Advisers Act of
1940 can BEST be described as:
A. providing equal disclosure to all clients.
B. imposing an ERISA fiduciary standard.
C. putting the client's interests ahead of the adviser's.
D. acting in a custodial capacity. Accurate Answer - C. putting the
client's interests ahead of the adviser's.
Which TWO qualify as a "security" under the Investment Advisers Act of
1940? (Choose two.)
A. Commodity futures
B. Limited partnership interests
C. Fixed annuities
D. Variable annuities Accurate Answer - B. Limited partnership
interests
D. Variable annuities
In performing due diligence on a potential solicitor, the investment adviser
must ensure that the solicitor:
A. is not subject to any statutory disqualification.
B. is not acting as a solicitor for an unregistered adviser.
C. has passed the Series 65 exam.
D. is registered in appropriate states. Accurate Answer - A. is not
subject to any statutory disqualification.
An SEC-registered investment adviser is NOT required to disclose "material"
disciplinary information in its Form ADV Part 1 after:
A. 5 years
B. 10 years
C. 12 years
D. 15 years Accurate Answer - B. 10 years
, Which event would be deemed an assignment of an investment advisory
contract?
A. An adviser hires a new CEO to replace its current retiring CEO.
B. An adviser is purchased by an unaffiliated adviser.
C. Any public offering of an adviser's stock.
D. An adviser organized as a corporation changes its structure to a
partnership. Accurate Answer - B. An adviser is purchased by an
unaffiliated adviser
The Investment Advisers Act of 1940 requires that written investment
advisory agreements must address:
A. proxy voting.
B. assignment of the contract.
C. brokerage arrangements.
D. fees. Accurate Answer - B. assignment of the contract.
If an investment adviser becomes ineligible for SEC registration, which
document must be filed to terminate its registration?
A. Form DRP
B. Form ADV-W
C. Form ADV Part 2A
D. Form U5 Accurate Answer - B. Form ADV-W
During an examination of XYZ Investment Advisers, the SEC discovers that
two of Adviser's portfolio managers have been engaged in frontrunning client
accounts. Neither Compliance nor Senior Management had any knowledge of
the scheme. If Adviser can show to the SEC's satisfaction that it had developed
and enforced procedures reasonably designed to prevent frontrunning,
Adviser will be able to claim that, despite the violation, Adviser has met its
duty to:
A. assist the SEC.
B. maintain required books and records.
C. eliminate internal control deficiencies.
D. supervise. Accurate Answer - D. supervise.
Which activity is NOT mandated for investment advisers that store required
records electronically?
A. Providing the SEC with prompt access, retrieval, and reproduction.
B. Maintaining copies of all electronically stored records using WORM format.
C. Arranging and indexing records to provide easy access and retrieval.
D. Developing procedures to preserve and maintain records. Accurate
Answer - B. Maintaining copies of all electronically stored records using
WORM format.
The Investment Advisers Act of 1940 defines the scope of the anti-fraud
provisions as extending to:
A. SEC-registered advisers and foreign advisers with a place of business in the
U.S., whether registered or exempt.
B. SEC-registered advisers and foreign advisers doing business in the U.S.,
whether registered or exempt.
C. SEC-registered investment advisers.
D. All investment advisers, whether registered or exempt. Accurate
Answer - D. All investment advisers, whether registered or exempt.
Which THREE persons or firms may be excluded from having to register
under the Investment Advisers Act of 1940? (Choose three.)
A. Accountants whose advisory services pertain solely to incidental financial
planning.
B. Persons or firms whose advice and reports are related solely to U.S.
government securities.
C. Publishers of generally circulated, bona fide newspapers or financial
journals.
D. Domestic banks and bank holding companies. Accurate Answer - B.
Persons or firms whose advice and reports are related solely to U.S.
government securities.
C. Publishers of generally circulated, bona fide newspapers or financial
journals.
,D. Domestic banks and bank holding companies.
The fiduciary duty imposed on advisers under the Investment Advisers Act of
1940 can BEST be described as:
A. providing equal disclosure to all clients.
B. imposing an ERISA fiduciary standard.
C. putting the client's interests ahead of the adviser's.
D. acting in a custodial capacity. Accurate Answer - C. putting the
client's interests ahead of the adviser's.
Which TWO qualify as a "security" under the Investment Advisers Act of
1940? (Choose two.)
A. Commodity futures
B. Limited partnership interests
C. Fixed annuities
D. Variable annuities Accurate Answer - B. Limited partnership
interests
D. Variable annuities
In performing due diligence on a potential solicitor, the investment adviser
must ensure that the solicitor:
A. is not subject to any statutory disqualification.
B. is not acting as a solicitor for an unregistered adviser.
C. has passed the Series 65 exam.
D. is registered in appropriate states. Accurate Answer - A. is not
subject to any statutory disqualification.
An SEC-registered investment adviser is NOT required to disclose "material"
disciplinary information in its Form ADV Part 1 after:
A. 5 years
B. 10 years
C. 12 years
D. 15 years Accurate Answer - B. 10 years
, Which event would be deemed an assignment of an investment advisory
contract?
A. An adviser hires a new CEO to replace its current retiring CEO.
B. An adviser is purchased by an unaffiliated adviser.
C. Any public offering of an adviser's stock.
D. An adviser organized as a corporation changes its structure to a
partnership. Accurate Answer - B. An adviser is purchased by an
unaffiliated adviser
The Investment Advisers Act of 1940 requires that written investment
advisory agreements must address:
A. proxy voting.
B. assignment of the contract.
C. brokerage arrangements.
D. fees. Accurate Answer - B. assignment of the contract.
If an investment adviser becomes ineligible for SEC registration, which
document must be filed to terminate its registration?
A. Form DRP
B. Form ADV-W
C. Form ADV Part 2A
D. Form U5 Accurate Answer - B. Form ADV-W
During an examination of XYZ Investment Advisers, the SEC discovers that
two of Adviser's portfolio managers have been engaged in frontrunning client
accounts. Neither Compliance nor Senior Management had any knowledge of
the scheme. If Adviser can show to the SEC's satisfaction that it had developed
and enforced procedures reasonably designed to prevent frontrunning,
Adviser will be able to claim that, despite the violation, Adviser has met its
duty to:
A. assist the SEC.
B. maintain required books and records.
C. eliminate internal control deficiencies.
D. supervise. Accurate Answer - D. supervise.
