CEP Study Guide 2026
Everything you need to pass the CEP exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 CEP Exam Format at a Glance
📚 CEP Topics to Study (69)
✍️ Sample CEP Questions & Answers
1. A company's equity plan must receive shareholder approval for material amendments under which exchange listing requirement?
NYSE Rule 303A.08 and Nasdaq Rule 5635(c) require shareholder approval for material revisions to equity compensation plans.
2. A company's equity plan prohibits hedging of company stock by employees. Which instrument would most likely violate this prohibition?
A variable prepaid forward contract locks in a minimum sale price for employer shares and is typically classified as a hedging transaction prohibited by most equity plan anti-hedging policies.
3. When a company undergoes a stock split, anti-dilution provisions in equity plans typically require which adjustment?
Anti-dilution provisions preserve the economic value of outstanding awards by multiplying the share count by the split ratio and dividing the exercise price by the same ratio.
4. What is the clawback provision in the context of equity compensation?
Clawback provisions allow a company to recoup previously paid equity compensation from executives, typically triggered by financial restatements or violations of conduct policies.
5. During a post-merger equity audit, the auditor must verify that assumed options were repriced to maintain economic equivalence. Which formula governs the adjustment?
Treasury regulations require that assumed options adjust the share number by the exchange ratio and divide the exercise price by the exchange ratio to preserve the intrinsic value.
6. Which holding period requirement must be met for an ISO sale to receive full qualified (long-term capital gain) tax treatment?
ISO qualified disposition requires holding shares more than 2 years from the grant date AND more than 1 year from the exercise date.