FREE CAIA Hedge Funds Questions and Answers

Question 1

Funds Administration is the name given to the set of services provided in support of the running of a fund.

Accepted Answer

TRUE

Answer

FALSE

Question 2

The fund manager outsources fund administration services to:

Accepted Answer

3rd party service providers

Answer

Government agencies

Answer

Other fund managers

Question 3

The Funds Administration Industry refers to the group of companies providing these support services.

Accepted Answer

TRUE

Answer

FALSE

Question 4

Which service does the Fund Manager not outsource to the Fund Administrator?

Accepted Answer

Portfolio management and investment decision making

Answer

Payment of the funds expenses

Answer

Reconciliation of daily and monthly broker statements

Question 5

The fund administrator can also provide shareholder services including the processing of subscriptions and redemptions to the fund

Accepted Answer

TRUE

Answer

FALSE

Question 6

Fund administration falls into which category?

Accepted Answer

Back Office

Answer

Front Office

Answer

Middle Office

Question 7

Hazard is defined as:

Accepted Answer

A condition with the potential to cause personal injury or death, property damage,or mission degradation

Answer

A condition with the potential to cause personal financial loss or property damage or mission degradation

Answer

A condition with the potential to cause personal injury or death or mission completion

Answer

A condition with the potential to cause property damage or mission degradation, or a revenue tax increase

Question 8

An expression of possible loss in terms of severity and probability is a definition of:

Accepted Answer

Risk

Answer

Hazard

Answer

Probability

Answer

Severity

Question 9

Definition of Risk is:

Accepted Answer

The likelihood that a hazard will result in a mishap or loss

Answer

The likelihood that a hazard will result in a disaster

Answer

The likelihood that a hazard will result in a favorable outcome

Answer

The likelihood that a hazard will result in a change in command

Question 10

The process of detecting hazards and assessing the associated risk is called:

Accepted Answer

Risk assessment

Answer

The right process

Answer

Risk Management Process

Answer

None of the above