CIM Cheat Sheet 2026

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

1. Which measure is most appropriate for evaluating a sub-portfolio that will be one of many components in a well-diversified fund? → Treynor ratio
2. How should portfolio management performance be reported to clients? → Provide accurate, complete, and timely performance reporting with appropriate benchmarks
3. Which type of bond is exempt from federal income tax on interest payments in the United States? → Municipal bonds
4. A donor gifts stock with a basis of $50,000 and fair market value of $30,000. The donee later sells it for $40,000. What is the donee's recognized gain or loss? → No gain or loss
5. Widening credit spreads on a corporate bond, with Treasury yields unchanged, most likely means: → The market sees higher default risk for the issuer
6. To defer a capital gain through a Qualified Opportunity Fund, the gain generally must be invested within: → 180 days of the sale
7. Which of the following is NOT one of the standard IPS constraints? → Benchmark outperformance target
8. Why is risk tolerance assessment important in investment planning? → To align investment strategy with client comfort level
9. A grandmother wants to pay her grandson's college tuition without using any annual exclusion or lifetime exemption. What must she do? → Pay the tuition directly to the educational institution
10. In a liability-relative (ALM) approach, the surplus is defined as: → Assets minus liabilities
11. Which factor is most critical in determining an investor’s asset allocation? → Risk tolerance
12. What is a well-known weakness of unconstrained mean-variance optimization? → It is highly sensitive to input estimates and can produce concentrated corner solutions
13. A private fund relying on the Section 3(c)(7) exclusion from the Investment Company Act must generally limit its investors to which group? → Qualified purchasers
14. Tactical asset allocation is best described as: → Short-term deliberate deviations from strategic weights to exploit perceived opportunities
15. Holding everything else constant, higher transaction costs for an asset class should lead to what kind of rebalancing corridor? → A wider corridor
16. Under the wash sale rule, a loss is disallowed if substantially identical securities are purchased within what window? → 30 days before or after the sale
17. Which type of risk cannot be eliminated through diversification? → Systematic risk
18. Before completing a principal transaction with an advisory client, Section 206(3) of the Advisers Act requires the adviser to do what? → Disclose in writing its capacity and obtain the client's consent
19. Under the SEC Marketing Rule (Rule 206(4)-1), an advertisement that presents gross performance must also do what? → Present net performance with equal prominence and for the same time period
20. An investment adviser registered with the SEC owes clients which duty under the Investment Advisers Act of 1940? → A fiduciary duty of care and loyalty
21. How should risk be assessed in investment analysis? → Evaluate risk tolerance, capacity, time horizon, and investment objectives systematically
22. In the context of hedge fund strategies, a global macro fund primarily makes investment decisions based on: → Macroeconomic trends, geopolitical events, and policy changes across countries
23. Which of the following is a primary risk specific to infrastructure investments? → Regulatory and political risk affecting long-term concession agreements
24. Which type of equity security gives holders a priority claim on assets and dividends over common shareholders, but typically lacks voting rights? → Preferred stock
25. Best execution requires an investment manager to: → Seek the most favorable overall terms reasonably available for client trades
26. A company's Return on Equity (ROE) can be decomposed using the DuPont framework into which three components? → Net profit margin, asset turnover, and equity multiplier
27. A portfolio concentrated in a single employer's stock primarily exposes the investor to: → Unsystematic (concentration) risk
28. A pension plan with long-duration liabilities that wants to reduce surplus volatility should most likely: → Increase long-duration bond holdings
29. A company reports EBIT of $600 and interest expense of $150. What is its interest coverage ratio? → 4.0
30. What does a negative alpha indicate in a portfolio? → Underperformance after risk adjustment