Practice Test Geeks(CFM) Certified Fund Manager Practice Test
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Investor Relations & Reporting Flashcards

7 cards from real CFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Investor Relations & Reporting flashcards as text

  1. Under SEC Rule 206(4)-7, registered investment advisers must review their compliance policies and procedures at minimum how often?

    Answer: Annually

    SEC Rule 206(4)-7 requires RIAs to review their written compliance policies and procedures at least annually.

  2. A fund manager sends investors a tear sheet showing a 3-year annualized return of 18.2%. Which GIPS standard provision is most directly relevant?

    Answer: Composites must include all fee-paying discretionary accounts

    GIPS requires that composites include all actual fee-paying discretionary portfolios managed to a similar strategy.

  3. Which document typically governs the frequency and format of capital account statements sent to limited partners in a private fund?

    Answer: The Limited Partnership Agreement (LPA)

    The LPA is the governing contract between the GP and LPs that specifies reporting obligations, timing, and format.

  4. An investor requests side-letter provisions granting most-favored-nation (MFN) status. What does this primarily entitle the investor to?

    Answer: Access to any more favorable terms granted to other investors

    MFN clauses entitle an investor to elect any more favorable terms granted to other LPs in their side letters.

  5. A hedge fund's capital account statement shows a beginning NAV of $10M, contributions of $2M, withdrawals of $1M, and an ending NAV of $12.5M. What is the fund's investment gain for the period?

    Answer: $1.5M

    Investment gain = Ending NAV − Beginning NAV − Contributions + Withdrawals = $12.5M − $10M − $2M + $1M = $1.5M.

  6. Which of the following is the primary purpose of a fund's audited financial statements prepared under U.S. GAAP?

    Answer: To provide an independent verification of the fund's financial position and performance

    Audited financial statements provide independent third-party verification of the fund's assets, liabilities, and results of operations.

  7. When a private equity fund reports an unrealized investment using the 'market approach,' which valuation methodology is most commonly applied?

    Answer: Comparable company / comparable transaction multiples

    The market approach typically uses EBITDA or revenue multiples derived from comparable public companies or recent private transactions.