CAIA Exam Review 2025/2026 ACTUAL COMPLETE REAL
EXAM QUESTIONS AND VERIFIED ANSWERS (100%
CORRECT ANSWERS) 2025(GRADED A+) DETAILED
ANSWERS!!
Credit Rating Agency Guidance - ANSWER-Members employed
by credit rating firms should make sure that procedures
prevent undue influence by the firm issuing the securities.
Members who use credit ratings should be aware of this
potential conflict of interest and consider whether independent
analysis is warranted.
Mosaic Theory Guidance - ANSWER-There is no violation when
a perceptive analyst reaches an investment conclusion about a
corporate action or event through an analysis of public
information together with items of nonmaterial, nonpublic
information
Social Media Guidance - ANSWER-When gathering information
from internet or social media sources, members and candidates
need to be aware that not all of it is considered public
information. Members and candidates should confirm that any
material information they receive from these sources is also
,available from public sources, such as company press releases
or regulatory filings
Industry Expert Guidance - ANSWER-Members and candidates
may seek insight from individuals who have specialized
expertise in an industry. However, they may not act or cause
others to act on any material nonpublic information obtained
from these experts until that information has been publicly
disseminated.
11 (B) Market Manipulation - ANSWER-Members and
Candidates must not
engage in practices that distort prices or artificially inflate
trading volume with the intent to mislead market participants.
This Standard applies to transactions that deceive the market
by distorting the price-setting mechanism of financial
instruments or by securing a controlling position to manipulate
the price of a related derivative and/or the asset itself.
Spreading false rumors is also prohibited.
III (A) Loyalty, Prudence, and Care - ANSWER-Members and
Candidates have a duty of loyalty to their clients and must act
with reasonable care and exercise prudent judgment. Members
,and Candidates must act for the benefit of their clients and
place their clients' interests before their employer's or their
own interests.
III(B) Fair Dealing - ANSWER-Members and Candidates must
deal fairly and
objectively with all clients when providing investment
analysis, making
investment recommendations, taking investment action, or
engaging in other
professional
activities.
Fairly does not necessarily mean equally. In the normal course
of business, there will be differences in the time that emails,
faxes, et cetera are received by different clients. Different
service levels are okay, but they must not negatively affect or
disadvantage any clients.
III(C) Suitability - ANSWER-When Members and Candidates are
in an advisory relationship with a client, they must:
1. Make a reasonable inquiry into a client's or prospective
client's investment experience, risk and return objectives,
and financial constraints prior to making any investment
, recommendation or taking investment action and must
reassess and update this information regularly.
2. Determine that an investment is suitable to the client's
financial situation and consistent with the client's written
objectives, mandates, and constraints before making an
investment recommendation or taking investment action.
3. Judge the suitability of investments in the context of the
client's total portfolio.
When Members and Candidates are responsible for managing
a portfolio to a
specific mandate, strategy, or style, they must make
only investment
recommendations or take only investment actions that are
consistent with the
stated objectives and constraints of
the portfolio.
Unsolicited Trade Guidance - ANSWER-An investment manager
might receive a client request to purchase a security that the
manager knows is unsuitable, given the client's investment
policy statement. the manager should not make the trade until
he has discussed with the client the reasons (based on the IPS)
that the trade is unsuitable for the client's account.
EXAM QUESTIONS AND VERIFIED ANSWERS (100%
CORRECT ANSWERS) 2025(GRADED A+) DETAILED
ANSWERS!!
Credit Rating Agency Guidance - ANSWER-Members employed
by credit rating firms should make sure that procedures
prevent undue influence by the firm issuing the securities.
Members who use credit ratings should be aware of this
potential conflict of interest and consider whether independent
analysis is warranted.
Mosaic Theory Guidance - ANSWER-There is no violation when
a perceptive analyst reaches an investment conclusion about a
corporate action or event through an analysis of public
information together with items of nonmaterial, nonpublic
information
Social Media Guidance - ANSWER-When gathering information
from internet or social media sources, members and candidates
need to be aware that not all of it is considered public
information. Members and candidates should confirm that any
material information they receive from these sources is also
,available from public sources, such as company press releases
or regulatory filings
Industry Expert Guidance - ANSWER-Members and candidates
may seek insight from individuals who have specialized
expertise in an industry. However, they may not act or cause
others to act on any material nonpublic information obtained
from these experts until that information has been publicly
disseminated.
11 (B) Market Manipulation - ANSWER-Members and
Candidates must not
engage in practices that distort prices or artificially inflate
trading volume with the intent to mislead market participants.
This Standard applies to transactions that deceive the market
by distorting the price-setting mechanism of financial
instruments or by securing a controlling position to manipulate
the price of a related derivative and/or the asset itself.
Spreading false rumors is also prohibited.
III (A) Loyalty, Prudence, and Care - ANSWER-Members and
Candidates have a duty of loyalty to their clients and must act
with reasonable care and exercise prudent judgment. Members
,and Candidates must act for the benefit of their clients and
place their clients' interests before their employer's or their
own interests.
III(B) Fair Dealing - ANSWER-Members and Candidates must
deal fairly and
objectively with all clients when providing investment
analysis, making
investment recommendations, taking investment action, or
engaging in other
professional
activities.
Fairly does not necessarily mean equally. In the normal course
of business, there will be differences in the time that emails,
faxes, et cetera are received by different clients. Different
service levels are okay, but they must not negatively affect or
disadvantage any clients.
III(C) Suitability - ANSWER-When Members and Candidates are
in an advisory relationship with a client, they must:
1. Make a reasonable inquiry into a client's or prospective
client's investment experience, risk and return objectives,
and financial constraints prior to making any investment
, recommendation or taking investment action and must
reassess and update this information regularly.
2. Determine that an investment is suitable to the client's
financial situation and consistent with the client's written
objectives, mandates, and constraints before making an
investment recommendation or taking investment action.
3. Judge the suitability of investments in the context of the
client's total portfolio.
When Members and Candidates are responsible for managing
a portfolio to a
specific mandate, strategy, or style, they must make
only investment
recommendations or take only investment actions that are
consistent with the
stated objectives and constraints of
the portfolio.
Unsolicited Trade Guidance - ANSWER-An investment manager
might receive a client request to purchase a security that the
manager knows is unsuitable, given the client's investment
policy statement. the manager should not make the trade until
he has discussed with the client the reasons (based on the IPS)
that the trade is unsuitable for the client's account.
