IACCP Master QBank Exam 2026
Questions and Answers 100% PASS
The SMC Capital, Inc. No-Action Letter (September 5, 1995) states that trade
allocations may occur:
A. Only on a rotational basis
B. On a pro rata basis but other allocation methods can be used without violating
the Advisers Act
C. Only on a pro rata basis
D. Based on the trader's good faith discretion - Correct answer-B. On a pro rata
basis but other allocation methods can be used without violating the Advisers Act
Which of the following should NOT be a factor when evaluating best execution?
A. Price
B. Transaction costs
C. Availability of affiliated brokerage services
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,D. Service and execution capability - Correct answer-C. Availability of affiliated
brokerage services
Under the safe harbor provided by Section 28(e) of the Securities and Exchange
Act of 1934, a "mixed use" product/service, purchased with soft dollars, most
likely refers to which of the following:
A. A research newsletter used by analysts
B. A computer terminal used only to place client trades
C. Portfolio management software used to calculate client returns
D. A junket to Pebble Beach for golf - Correct answer-C. Portfolio management
software used to calculate client returns
An adviser's valuation procedures should, practically speaking, be prepared with
the LEAST attention to:
A. Large cap stocks
B. Illiquid investments
C. Foreign issues
D. Micro cap stocks - Correct answer-A. Large cap stocks
Agency cross transactions do NOT require:
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,A. Annual disclosure to advisory clients of the number of agency cross transactions
B. Annual disclosure of the total remuneration received by the adviser through
agency cross transactions
C. Consent from at least two advisory clients
D. Disclosures that written consent may be revoked at any time - Correct answer-
C. Consent from at least two advisory clients
"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 - Correct answer-D. All of the above
Which of the following statements is FALSE?
A. Trade errors must be resolved for the client's benefit.
B. Principal transactions require consent prior to settlement.
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, C. Commissions generated from ERISA plan transactions may never be used to
generate soft dollars.
D. An adviser's fiduciary duty includes allocating investment opportunities fairly
and equitably. - Correct answer-C. Commissions generated from ERISA plan
transactions may never be used to generate soft dollars.
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 - Correct answer-B. To execute all of
client's transactions with ABC Broker
Some of adviser's clients have directed that certain brokers be used to trade for
their accounts. When executing similar transactions for non-directed and directed
business, the adviser should:
A. Ensure its order of transactions is consistent with its disclosure
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Questions and Answers 100% PASS
The SMC Capital, Inc. No-Action Letter (September 5, 1995) states that trade
allocations may occur:
A. Only on a rotational basis
B. On a pro rata basis but other allocation methods can be used without violating
the Advisers Act
C. Only on a pro rata basis
D. Based on the trader's good faith discretion - Correct answer-B. On a pro rata
basis but other allocation methods can be used without violating the Advisers Act
Which of the following should NOT be a factor when evaluating best execution?
A. Price
B. Transaction costs
C. Availability of affiliated brokerage services
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,D. Service and execution capability - Correct answer-C. Availability of affiliated
brokerage services
Under the safe harbor provided by Section 28(e) of the Securities and Exchange
Act of 1934, a "mixed use" product/service, purchased with soft dollars, most
likely refers to which of the following:
A. A research newsletter used by analysts
B. A computer terminal used only to place client trades
C. Portfolio management software used to calculate client returns
D. A junket to Pebble Beach for golf - Correct answer-C. Portfolio management
software used to calculate client returns
An adviser's valuation procedures should, practically speaking, be prepared with
the LEAST attention to:
A. Large cap stocks
B. Illiquid investments
C. Foreign issues
D. Micro cap stocks - Correct answer-A. Large cap stocks
Agency cross transactions do NOT require:
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,A. Annual disclosure to advisory clients of the number of agency cross transactions
B. Annual disclosure of the total remuneration received by the adviser through
agency cross transactions
C. Consent from at least two advisory clients
D. Disclosures that written consent may be revoked at any time - Correct answer-
C. Consent from at least two advisory clients
"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 - Correct answer-D. All of the above
Which of the following statements is FALSE?
A. Trade errors must be resolved for the client's benefit.
B. Principal transactions require consent prior to settlement.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, C. Commissions generated from ERISA plan transactions may never be used to
generate soft dollars.
D. An adviser's fiduciary duty includes allocating investment opportunities fairly
and equitably. - Correct answer-C. Commissions generated from ERISA plan
transactions may never be used to generate soft dollars.
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 - Correct answer-B. To execute all of
client's transactions with ABC Broker
Some of adviser's clients have directed that certain brokers be used to trade for
their accounts. When executing similar transactions for non-directed and directed
business, the adviser should:
A. Ensure its order of transactions is consistent with its disclosure
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