Investment Advisor Cheat Sheet 2026

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

1. The Social Security full retirement age (FRA) for individuals born in 1960 or later is: → 67 years old
2. The Efficient Market Hypothesis (EMH) in its strong form asserts that: → Stock prices reflect all public and private (insider) information
3. Under the Investment Advisers Act of 1940, an investment adviser has a fiduciary duty to act in the best interest of whom? → The client
4. A company has a price-to-book (P/B) ratio of 0.8. This most likely indicates the stock is trading: → Below its book value
5. At what age must holders of Traditional IRAs begin taking Required Minimum Distributions (RMDs)? → 73
6. Under the SEC's Regulation Best Interest (Reg BI), broker-dealers must act in whose best interest when making recommendations? → Their retail customers
7. An example of this is the idea that a family of four lives in poverty if their annual income is less than $20,000. → An absolute measure of poverty
8. A client with a high risk tolerance and a 30-year time horizon is generally most appropriate for a portfolio weighted toward: → Equities with a small fixed income allocation
9. According to the Dividend Discount Model (DDM), what is the primary driver of a stock's intrinsic value? → Present value of expected future dividends
10. Which retirement plan type allows self-employed individuals the highest contribution limits? → Solo 401(k)
11. A 50-day moving average crossing above a 200-day moving average is commonly known as a: → Golden cross
12. An investor invests in the underlying asset of __________ in order to receive a variable annuity. 1. Debt Instruments 2. Equity 3. Gold → Only 2 and 3
13. Under the Investment Advisers Act of 1940, which threshold generally requires an investment adviser to register with the SEC? → $100 million in assets under management
14. A stock's beta is 1.5. If the overall market rises by 10%, how much would this stock be expected to rise? → 15%
15. EBITDA is most useful as a valuation metric because it: → Approximates operating cash flow by excluding non-cash and financing items
16. An investment adviser recommending a client purchase disability income insurance is primarily addressing which risk? → The risk of loss of earned income due to illness or injury
17. The Sharpe ratio measures portfolio performance by: → Dividing excess return over the risk-free rate by portfolio standard deviation
18. Under the Dodd-Frank Act, family offices are excluded from the definition of investment adviser if they: → Advise only family members and have no public clients
19. When an investment adviser has a personal financial interest in a security they recommend to clients, they must: → Disclose the personal interest before making the recommendation
20. Which ethical principle requires an investment adviser to treat all clients fairly and not favor certain clients at the expense of others? → Fair dealing
21. Which SEC rule governs the custody of client assets by investment advisers? → Rule 206(4)-2
22. What does 'systematic risk' refer to in portfolio management? → Market-wide risk that cannot be diversified away
23. What does 'beta' measure in portfolio management? → The portfolio's sensitivity to market movements
24. The Gordon Growth Model (constant-growth DDM) values a stock as: → Next year's dividend divided by (required return minus the constant growth rate)
25. Which account type is most appropriate for assets with high expected growth to maximize long-term after-tax wealth? → Roth IRA or Roth 401(k)
26. Which type of life insurance provides a death benefit for a specified term and has no cash value component? → Term life insurance
27. Which investment among them is most susceptible to inflation? → Bank deposits
28. Correlation between two assets ranges from −1 to +1. A correlation of −1 between two holdings in a portfolio means: → The two assets move in exactly opposite directions
29. Which type of analysis focuses on evaluating a company's financial statements, management, and competitive position to determine intrinsic value? → Fundamental analysis
30. Which of the following is an example of unsystematic (company-specific) risk that can be reduced through diversification? → A product recall affecting a single company's stock