IACCP Practice Exam Questions With Answers | Latest Update

IACCP Practice Exam Questions With Answers | Latest Update Doug is a trader for an investment advisory firm. Doug shares a residence with his wife,son, daughter and retired mother. Doug and his wife do not have any investmentaccounts. Which TWO family members will have to give Doug quarterly transaction reports tosubmit? - ANSWER -Doug's mother because she holds only open-end funds, high qualityshort-term corporate debt, blue chip stocks and U.S. governmentpaper in her brokerage account. AND Doug's son who has an employee-directed 401(k) plan whoseinvestment options include only open-end funds, high quality short-term corporate debt, blue chip stocks and U.S. government paper. Which TWO factors are considered mandatory provisions to be included in advisorycontracts, if an adviser, as a matter of best practice, chooses to enter into written advisorycontracts with its clients? (Choose two.) - ANSWER -Disclosure of changes in the general partners of the partnership. AND "No Assignment" clause without client consent. An investment adviser manages performance-based and asset-based fee accounts.Trade allocation of IPO shares could result in which TWO potential conflicts of interest? - ANSWER -Higher fees AND Preferential treatment of certain clients According to the SEC Investment Adviser Codes of Ethics Rule, all are requirements foraccess persons - ANSWER -Periodically report their securities holdings to the Chief ComplianceOfficer or other designated person. Obtain the investment adviser's approval before investing in certaintypes of securities. Report personal securities transactions on a quarterly basis. How can an investment adviser address material conflicts of interest as they relate toproxy voting? - ANSWER -Delegate responsibility for voting proxies to a proxy voting service. If an investment adviser has proxy voting authority, which record is NOT required to bemaintained? - ANSWER -Evidence of annual offer of proxy policies and procedures. Which TWO examples fall within the definition of an "advertisement"? (Choose two.) - ANSWER -A notice, circular, letter or other written communication addressed tomore than one person. Any endorsement or testimonial for which an investment adviserprovides compensation. When trading for a client's account, Investment Adviser accidentally instructed the brokerto buy 1000 shares of Y at $1.00 per share when Adviser actually wanted to buy 1000shares of X at $1.00 per share. Adviser realizes its mistake the next day, when Y is tradingfor $0.95 per share and X is trading for $1.05 per share. Adviser must sell Y and buy forthe client: - ANSWER -$1,000 worth of X A Chief Compliance Officer (CCO) who has supervisory responsibility has adoptedprocedures "reasonably designed" to prevent and detect violations of the securities laws.A system is in place for applying those procedures and the CCO has reasonablydischarged those supervisory responsibilities in accordance with the procedures. TheCCO was not aware that a supervised person was not complying with the procedures. If the SEC were to conduct an investigation, what would be the MOST likely outcome? - ANSWER -The CCO shall not be deemed to have failed to reasonably supervise. An investment adviser claims in its disclosure brochure that: "The information in thisbrochure has been approved by the SEC." Which provision under the Investment Advisers Act of 1940 is violated by this claim? - ANSWER -The Anti-fraud Rule An adviser manages portfolios that include both unaffiliated mutual funds and equities.The adviser creates a composite, which includes mutual fund performance that theadviser knows was calculated on a gross-of-fee basis. What must the adviser do? - ANSWER -Ensure compliance with Investment Advisers Act of 1940 requirements. Under the Investment Company Act Rule 17j-1 regarding personal investment activities ofinvestment company personnel, which statement is TRUE regarding the code of ethics ofan adviser to a mutual fund? - ANSWER -The mutual fund's board of directors must approve the adviser's code. Which THREE activities should TYPICALLY require a review and possible changes to afirm's written policies and procedures according to the SEC? (Choose three.) - ANSWER -Rulemaking and regulatory changes. Compliance issues within the firm.