CIMA Cheat Sheet 2026

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

1. A 'benchmark portfolio' specified in an IPS serves primarily to: → Provide a standard against which portfolio performance is evaluated
2. What is tax evasion? → Engaging in illegal practices to avoid taxes.
3. Which fee structure aligns the investment manager's incentives most closely with client outcomes? → Asset-based fee schedule with performance fee above a high-water mark
4. In the manager selection process, a 'style box' analysis primarily helps consultants evaluate: → Whether a manager's investment style aligns with the portfolio's objectives
5. What is the purpose of an Investment Policy Statement (IPS) in the consulting process? → To establish investment objectives and guidelines
6. A portfolio manager wants to reduce a portfolio's duration from 8 years to 5 years using Treasury futures. The manager should: → Sell Treasury futures contracts
7. A risk parity portfolio allocates capital such that: → Each asset class contributes equally to overall portfolio risk rather than capital
8. The M-squared (M²) performance measure adjusts a portfolio's return to: → Match the benchmark's level of total risk
9. Strategic asset allocation (SAA) is BEST described as: → A long-term target mix of asset classes aligned with the investor's IPS objectives
10. GDP measured by the expenditure approach equals the sum of: → C + I + G + (X – M)
11. A CIMA charterholder is asked to backtest a trading strategy using data that was used to develop the strategy. The primary ethical and analytical concern is: → Data snooping bias that inflates backtested performance
12. Kurtosis greater than 3 (leptokurtic distribution) in an asset's return distribution implies: → Fatter tails and higher probability of extreme returns than a normal distribution
13. When comparing manager performance, a CIMA professional should PRIMARILY use: → Risk-adjusted returns relative to an appropriate peer group and benchmark
14. A swap overlay is used to convert a fixed-rate bond portfolio to floating-rate exposure. The portfolio manager enters into a swap where they: → Pay fixed and receive floating, offsetting the fixed coupons from the bond portfolio
15. A portfolio's 'Sharpe ratio' measures: → Excess return per unit of total (standard deviation) risk
16. A 'currency board' arrangement, as used historically in Hong Kong and Argentina, requires the monetary authority to: → Hold foreign exchange reserves at least equal to the monetary base to defend a fixed peg
17. Which of the following best describes the concept of purchasing power parity (PPP)? → Exchange rates adjust so that identical goods cost the same across countries
18. In options-based portfolio protection, a protective put strategy is equivalent to: → A long call option combined with a risk-free bond (put-call parity)
19. What is the primary purpose of a 'finals presentation' in the manager selection process? → To allow shortlisted managers to present directly to the investment committee
20. When constructing an IPS for an institutional client, 'time horizon' considerations differ from individual clients primarily because: → Institutions may have perpetual or indefinitely long time horizons
21. A CIMA professional is evaluating a hedge fund with a 2-and-20 fee structure. What does '2-and-20' refer to? → 2% management fee and 20% performance fee
22. Which of the following best describes a fund of funds in the context of alternative investments? → A fund that invests in a portfolio of other hedge funds or private equity funds
23. When using Monte Carlo simulation for VaR, which of the following is a key advantage over historical simulation? → It can model complex instruments and generate scenarios not seen historically
24. Which performance attribution component isolates the manager's skill in selecting individual securities within each sector? → Selection effect
25. In a scenario where two assets are perfectly positively correlated (ρ = +1), the portfolio standard deviation equals: → The weighted average of the two assets' standard deviations
26. The Fisher Effect states that the nominal interest rate equals approximately: → Real interest rate plus expected inflation
27. An investor implementing a 'constant proportion portfolio insurance' (CPPI) strategy will: → Increase equity exposure when markets rise and reduce it when markets fall
28. A CIMA certificant is offered a consulting fee by a corporation to present their stock favorably to institutional clients. This arrangement must be: → Disclosed prominently to clients before any recommendation is made
29. The generation-skipping transfer (GST) tax is imposed on transfers to 'skip persons.' A skip person is generally defined as: → A person assigned to a generation two or more levels below the transferor
30. Under IRC Section 1031, a like-kind exchange of real property must be completed within what time frame from the sale of the relinquished property? → 45 days identification / 180 days completion