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. Which of the following is typically disclosed in Form ADV Part 2A (the 'brochure') that is most relevant to investor relations?

    Answer: Fees and compensation, conflicts of interest, and disciplinary history

    Form ADV Part 2A is the narrative disclosure document that must describe fees, conflicts of interest, and disciplinary events in plain English.

  2. When calculating a fund's Distributions to Paid-In (DPI) ratio, which of the following is used as the numerator?

    Answer: Cumulative cash distributions to LPs

    DPI equals cumulative cash distributions paid to LPs divided by total paid-in capital, measuring actual realized returns.

  3. An investor relations professional is reviewing a fund subscription agreement. The 'representations and warranties' section primarily protects the fund by:

    Answer: Confirming the investor is an accredited investor and meets other suitability criteria

    Investor representations and warranties confirm eligibility (accredited/qualified status), legal capacity, and compliance with applicable laws before admitting the investor.

  4. A fund manager prepares an Annual General Meeting (AGM) presentation. Which topic is most commonly addressed that is specifically required by best-practice LP governance standards?

    Answer: Portfolio performance, valuation methodology, and any material conflicts of interest

    AGM best practices require covering portfolio performance updates, valuation methods, and disclosure of material conflicts per ILPA and industry norms.

  5. A GP is subject to a 'clawback' provision. In which scenario would this provision most likely be triggered?

    Answer: When early profitable exits caused the GP to receive excess carry versus what it would have earned on the fund as a whole

    A clawback requires the GP to return previously distributed carried interest if early realizations resulted in carry payments exceeding what the GP was ultimately entitled to overall.

  6. Under Regulation D Rule 506(b), a private fund may sell securities to up to how many non-accredited but sophisticated investors?

    Answer: 35

    Rule 506(b) allows up to 35 non-accredited sophisticated investors, though most funds avoid this to simplify disclosure requirements.

  7. A fund's investor update reports a Public Market Equivalent (PME) of 1.25. How should this be interpreted?

    Answer: The fund outperformed a comparable public market index by generating 25% more value per dollar invested

    A PME above 1.0 means the private fund delivered more value per invested dollar than if the same capital had been deployed in the chosen public index.