IACCP Master QBank Exam Questions AND Correct Answers
"Bailey disclosure" refers to the concept of advising clients of
the effect of directing the adviser to use a particular broker(s).
Disclosure about the ramifications of brokerage direction
should include:
A. Potential conflicts of interest when a directed broker
referred the client to the adviser
B. Limits on the ability of the adviser to negotiate
commissions
C. Restrictions on placing directed trades with other client
trades
D. All of the above - ✔✔D. All of the above
55.
What is NOT true regarding the annual review under the
Investment Advisers Act of 1940 Compliance Programs Rule?
A. It is used to determine the adequacy of the firm's policies
and procedures.
B. It is used to determine the effectiveness of the firm's
policies and procedures.
C. Any document created to evidence the annual review must
be retained.
,D. It must be summarized in a written report. - ✔✔D. It must
be summarized in a written report.
A Chief Compliance Officer (CCO) at an investment company
would be required to provide a written report to the:
A. designated SEC regional office.
B. fund's board of directors.
C. fund's audit committee.
D. fund's CEO. - ✔✔B. fund's board of directors.
A Chief Compliance Officer (CCO) who has supervisory
responsibility has adopted procedures "reasonably designed"
to prevent and detect violations of the securities laws. A
system is in place for applying those procedures and the CCO
has reasonably discharged those supervisory responsibilities
in accordance with the procedures. The CCO 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?
A. - The CCO shall be suspended from future activity in a
supervisory capacity.
,B. - The CCO shall not be deemed to have failed to reasonably
supervise.
C. - The CCO shall be deemed to have failed to adequately
assess the risk exposure for the firm.
D. - The CCO will be deemed to have failed reasonably to
supervise. - ✔✔B. - The CCO shall not be deemed to have
failed to reasonably supervise.
A client directs an adviser to execute securities transactions
with ABC Broker. What are adviser's obligation(s) in trading
for this client?
A. To consider ABC Broker when conducting client's
transactions
B. To execute all of client's transactions with ABC Broker
C. To execute some of client's transactions with ABC Broker
regardless of best execution
D. To execute all of client's transactions with ABC Broker,
consistent with the adviser's duty to achieve best execution -
✔✔B. To execute all of client's transactions with ABC Broker
A high net worth individual includes an individual with:
, A. managed assets of at least $500,000 and a net worth of at
least $1,000,000.
B. a net worth of at least $1,000,000.
C. managed assets of at least $500,000.
D. managed assets of at least $750,000. - ✔✔D. managed
assets of at least $750,000.
A portfolio manager actively trades securities in her personal
account that are also held in client accounts that she
manages.
The Chief Compliance Officer is aware of this and should track
which TWO activities, according to best practices? (Choose
two.)
A. Failing to provide required disclosure in connection with
directed brokerage arrangements.
B. Taking investment opportunities from a client for the
manager's benefit.
C. Effecting agency cross transactions.
D. Frontrunning. - ✔✔B. Taking investment opportunities
from a client for the manager's benefit.
D. Frontrunning.
"Bailey disclosure" refers to the concept of advising clients of
the effect of directing the adviser to use a particular broker(s).
Disclosure about the ramifications of brokerage direction
should include:
A. Potential conflicts of interest when a directed broker
referred the client to the adviser
B. Limits on the ability of the adviser to negotiate
commissions
C. Restrictions on placing directed trades with other client
trades
D. All of the above - ✔✔D. All of the above
55.
What is NOT true regarding the annual review under the
Investment Advisers Act of 1940 Compliance Programs Rule?
A. It is used to determine the adequacy of the firm's policies
and procedures.
B. It is used to determine the effectiveness of the firm's
policies and procedures.
C. Any document created to evidence the annual review must
be retained.
,D. It must be summarized in a written report. - ✔✔D. It must
be summarized in a written report.
A Chief Compliance Officer (CCO) at an investment company
would be required to provide a written report to the:
A. designated SEC regional office.
B. fund's board of directors.
C. fund's audit committee.
D. fund's CEO. - ✔✔B. fund's board of directors.
A Chief Compliance Officer (CCO) who has supervisory
responsibility has adopted procedures "reasonably designed"
to prevent and detect violations of the securities laws. A
system is in place for applying those procedures and the CCO
has reasonably discharged those supervisory responsibilities
in accordance with the procedures. The CCO 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?
A. - The CCO shall be suspended from future activity in a
supervisory capacity.
,B. - The CCO shall not be deemed to have failed to reasonably
supervise.
C. - The CCO shall be deemed to have failed to adequately
assess the risk exposure for the firm.
D. - The CCO will be deemed to have failed reasonably to
supervise. - ✔✔B. - The CCO shall not be deemed to have
failed to reasonably supervise.
A client directs an adviser to execute securities transactions
with ABC Broker. What are adviser's obligation(s) in trading
for this client?
A. To consider ABC Broker when conducting client's
transactions
B. To execute all of client's transactions with ABC Broker
C. To execute some of client's transactions with ABC Broker
regardless of best execution
D. To execute all of client's transactions with ABC Broker,
consistent with the adviser's duty to achieve best execution -
✔✔B. To execute all of client's transactions with ABC Broker
A high net worth individual includes an individual with:
, A. managed assets of at least $500,000 and a net worth of at
least $1,000,000.
B. a net worth of at least $1,000,000.
C. managed assets of at least $500,000.
D. managed assets of at least $750,000. - ✔✔D. managed
assets of at least $750,000.
A portfolio manager actively trades securities in her personal
account that are also held in client accounts that she
manages.
The Chief Compliance Officer is aware of this and should track
which TWO activities, according to best practices? (Choose
two.)
A. Failing to provide required disclosure in connection with
directed brokerage arrangements.
B. Taking investment opportunities from a client for the
manager's benefit.
C. Effecting agency cross transactions.
D. Frontrunning. - ✔✔B. Taking investment opportunities
from a client for the manager's benefit.
D. Frontrunning.
