AIP Cheat Sheet 2026

The 30 highest-yield AIP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which of the following best describes 'capital flows' in an international context? → Movement of money for investment, trade, or business operations across borders
2. Which statement about electronic documentation in Accredited Investment Professional Certification practice is MOST accurate? → Electronic documentation must meet the same standards as paper records
3. How long should AIP professionals typically retain official documentation? → According to applicable regulatory requirements and organizational policies
4. Which IRS provision allows investors who are 50 or older to contribute additional 'catch-up' amounts to qualified retirement accounts? → The catch-up contribution provision under Section 414(v)
5. What is the main goal of portfolio management? → To maximize returns based on risk tolerance
6. Tax-loss harvesting involves: → Selling losing investments to offset realized capital gains and reduce tax liability
7. Which of the following best defines 'venture capital' as an alternative investment? → Equity financing for early-stage companies with high growth potential
8. Which of the following best describes a hedge fund's use of leverage? → Leverage allows hedge funds to borrow capital to amplify potential returns
9. Which of the following is a key feature of a collateralized loan obligation (CLO)? → It pools corporate loans and issues tranches with varying risk/return profiles
10. An investor purchases a Treasury Inflation-Protected Security (TIPS). As inflation rises, what happens to the principal value of the TIPS? → The principal adjusts upward with inflation, increasing interest payments
11. Under the Employee Retirement Income Security Act (ERISA), plan fiduciaries are held to what standard when making investment decisions for a pension plan? → The prudent expert standard — acting as a knowledgeable fiduciary would
12. What is liquidity in financial instruments? → Ease of converting to cash without affecting value
13. What is the purpose of risk profiling? → To assess risk tolerance and preferences
14. Which risk measure captures the potential loss in a portfolio's worst-case scenarios beyond the VaR threshold, making it a more complete measure of tail risk? → Expected Shortfall (CVaR)
15. A donor-advised fund (DAF) allows an investor to: → Receive immediate charitable deductions while retaining advisory control over grant timing
16. Which statement about real estate investment trusts (REITs) is correct? → REITs must distribute at least 90% of taxable income to shareholders
17. A portfolio manager shifts allocations away from long-term targets based on short-term market forecasts. This is best described as: → Tactical asset allocation
18. Stress testing a portfolio involves which of the following analytical approaches? → Applying extreme but plausible hypothetical scenarios to assess potential losses
19. Which type of account allows US investors to make after-tax contributions and enjoy tax-free qualified withdrawals in retirement? → Roth IRA
20. The Black-Litterman model improves on traditional mean-variance optimization primarily by: → Combining market equilibrium returns with investor views to reduce estimation error
21. When a AIP professional faces pressure to compromise professional standards, the BEST response is to: → Document the pressure and uphold professional standards
22. Which statement BEST describes the relationship between Accredited Investment Professional Certification certification and industry evolution? → Requirements evolve periodically to reflect advances in knowledge and practice
23. What is the MOST important reason for Accredited Investment Professional Certification professionals to maintain continuing education? → To stay current with evolving standards, practices, and regulations
24. What is the PRIMARY purpose of obtaining AIP certification in Accredited Investment Professional Certification? → To demonstrate verified competency and adherence to professional standards
25. An investor's policy statement specifies a maximum portfolio drawdown of 15%. Which portfolio construction tool directly addresses this constraint? → Value at Risk (VaR) and drawdown-constrained optimization
26. The Consumer Price Index (CPI) primarily measures: → Changes in prices paid by urban consumers for a basket of goods and services
27. A Grantor Retained Annuity Trust (GRAT) is an estate planning strategy designed to: → Transfer asset appreciation above the IRS hurdle rate to heirs gift-tax free
28. What does the term 'alpha' measure in the context of alternative investments? → Excess return generated by a manager above a benchmark on a risk-adjusted basis
29. Which of the following is an example of a lagging economic indicator? → Average duration of unemployment
30. Effective communication between Accredited Investment Professional Certification professionals and stakeholders requires which essential element? → Adapting communication style to the audience while maintaining accuracy