IACCP Actual Questions and Correct Answers
Q1
Assignment
Answer: Any direct or indirect transfer or hypothecation of an investment advisory
contract by the assignor
Q2
Who is not an Investment Advisor?
Answer: A Bank, Lawyer, accountant, engineer, teach whose performance of such
services is solely incidental to the practice of his profession, Broker-dealer
(commission only)published of any bona fide newspaper, magazine, business
publication, rating systems (Moodys, etc.)
Q3
What does it mean when someone has "Control"?
Answer: Power to exercise a controlling influence over the management or policies of
a compny
Q4
Investment supervisory services
Answer: Giving of continuous advice as to the investment of funds on the basis of the
individual needs of each client
Q5
National securities exchange
Answer: an exchange registered under section 6 of the Securities Exchange Act of
1934
Q6
Person
Answer: Natural person or company
,Q7
Not Securities
Answer: Commodity Futures, Fixed Annuities
Q8
Securities Act of 1933 Securities Exchange Act of 1934 Trust Indenture Act of 1939
Answer: Acts respectively, heretofore or hereafter amended
Q9
What is a Business Development Company?
Answer: A company must be registered in compliance with Section 54 of the
Investment Company Act of 1940 to qualify as a BDC. A major difference between a
BDC and a venture capital fund is that BDCs allow smaller, non-accredited investors to
invest in startup companies. A BDC is a type of closed-end fund that makes
investments in developing companies and firms that are financially distressed.
Q10
What is an underwriter?
Answer: Works closely with the issuing body to determine the offering price of the
securities, buys them from the issuer, and sells them to investors via the
underwriter's distribution network. Underwriters generally receive underwriting fees
from their issuing clients, but they also can earn profits when selling the underwritten
shares to investors.
Q11
What is a Foreign Private Advisor?
Answer: No US, fewer than 15 clients in US in private funds, aggregate assets under
management US clients in private funds of less than $25 million. Does not hold self out
in the US public as an Investment Adviser; nor acts as An Investment Adviser to any
investment company registered under the Investment Company Act of 1940
Q12
What is a Commodity Pool Operator (CPO)?
Answer: A CPO is an individual or organization which operates a commodity pool and
solicits funds for that commodity pool.
, Q13
What is a Commodity Pool?
Answer: An enterprise in which funds contributed by a number of persons are
combined for the purpose of trading futures contracts, options on futures, retail
off-exchange forex contracts or swaps, or to invest in another commodity pool.
Q14
What is a Commodity Trading Advisor (CTA)
Answer: A US financial regulatory term for an individual or organization who is
retained by a fund or individual client to provide advice and services related to trading
in futures contracts, commodity options and/or swaps. They are responsible for the
trading within managed futures accounts.
Q15
What is a Swap
Answer: A derivative contract through which two parties exchange financial
instruments. These instruments can be almost anything, but most swaps involve cash
flows based on a notional principal amount that both parties agree to. Usually, the
principal does not change hands. Each cash flow comprises one leg of the swap. One
cash flow is generally fixed, while the other is variable, that is, based on a a
benchmark interest rate, floating currency exchange rate or index price. The most
common kind of swap is an interest rate swap. Swaps do not trade on exchanges, and
retail investors do not generally engage in swaps. Rather, swaps are over-the-counter
contracts between businesses or financial institutions.
Q16
What is a Swap Dealer?
Answer: An individual who acts as the counterparty in a swap agreement for a fee
called a spread. Swap dealers are the market makers for the swap market. The spread
represents the difference between the wholesale price for trades and the retail price.
Because swap arrangements aren't actively traded, swap dealers allow brokers to
standardize swap contracts to some extent.
Q17
What is Swap Execution Facility?
Answer: A platform for financial swap trading that provides pre-trade information (i.e.
bid and offer prices) and a mechanism for executing swap transactions among eligible
participants.
Q1
Assignment
Answer: Any direct or indirect transfer or hypothecation of an investment advisory
contract by the assignor
Q2
Who is not an Investment Advisor?
Answer: A Bank, Lawyer, accountant, engineer, teach whose performance of such
services is solely incidental to the practice of his profession, Broker-dealer
(commission only)published of any bona fide newspaper, magazine, business
publication, rating systems (Moodys, etc.)
Q3
What does it mean when someone has "Control"?
Answer: Power to exercise a controlling influence over the management or policies of
a compny
Q4
Investment supervisory services
Answer: Giving of continuous advice as to the investment of funds on the basis of the
individual needs of each client
Q5
National securities exchange
Answer: an exchange registered under section 6 of the Securities Exchange Act of
1934
Q6
Person
Answer: Natural person or company
,Q7
Not Securities
Answer: Commodity Futures, Fixed Annuities
Q8
Securities Act of 1933 Securities Exchange Act of 1934 Trust Indenture Act of 1939
Answer: Acts respectively, heretofore or hereafter amended
Q9
What is a Business Development Company?
Answer: A company must be registered in compliance with Section 54 of the
Investment Company Act of 1940 to qualify as a BDC. A major difference between a
BDC and a venture capital fund is that BDCs allow smaller, non-accredited investors to
invest in startup companies. A BDC is a type of closed-end fund that makes
investments in developing companies and firms that are financially distressed.
Q10
What is an underwriter?
Answer: Works closely with the issuing body to determine the offering price of the
securities, buys them from the issuer, and sells them to investors via the
underwriter's distribution network. Underwriters generally receive underwriting fees
from their issuing clients, but they also can earn profits when selling the underwritten
shares to investors.
Q11
What is a Foreign Private Advisor?
Answer: No US, fewer than 15 clients in US in private funds, aggregate assets under
management US clients in private funds of less than $25 million. Does not hold self out
in the US public as an Investment Adviser; nor acts as An Investment Adviser to any
investment company registered under the Investment Company Act of 1940
Q12
What is a Commodity Pool Operator (CPO)?
Answer: A CPO is an individual or organization which operates a commodity pool and
solicits funds for that commodity pool.
, Q13
What is a Commodity Pool?
Answer: An enterprise in which funds contributed by a number of persons are
combined for the purpose of trading futures contracts, options on futures, retail
off-exchange forex contracts or swaps, or to invest in another commodity pool.
Q14
What is a Commodity Trading Advisor (CTA)
Answer: A US financial regulatory term for an individual or organization who is
retained by a fund or individual client to provide advice and services related to trading
in futures contracts, commodity options and/or swaps. They are responsible for the
trading within managed futures accounts.
Q15
What is a Swap
Answer: A derivative contract through which two parties exchange financial
instruments. These instruments can be almost anything, but most swaps involve cash
flows based on a notional principal amount that both parties agree to. Usually, the
principal does not change hands. Each cash flow comprises one leg of the swap. One
cash flow is generally fixed, while the other is variable, that is, based on a a
benchmark interest rate, floating currency exchange rate or index price. The most
common kind of swap is an interest rate swap. Swaps do not trade on exchanges, and
retail investors do not generally engage in swaps. Rather, swaps are over-the-counter
contracts between businesses or financial institutions.
Q16
What is a Swap Dealer?
Answer: An individual who acts as the counterparty in a swap agreement for a fee
called a spread. Swap dealers are the market makers for the swap market. The spread
represents the difference between the wholesale price for trades and the retail price.
Because swap arrangements aren't actively traded, swap dealers allow brokers to
standardize swap contracts to some extent.
Q17
What is Swap Execution Facility?
Answer: A platform for financial swap trading that provides pre-trade information (i.e.
bid and offer prices) and a mechanism for executing swap transactions among eligible
participants.
