Investment Advisor Study Guide 2026
Everything you need to pass the Investment Advisor exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 Investment Advisor Exam Format at a Glance
📚 Investment Advisor Topics to Study (21)
✍️ Sample Investment Advisor Questions & Answers
1. The United States' Gini coefficient has decreased over the previous few decades.
The Gini coefficient is a measure of income inequality, where a higher value indicates greater inequality. Over the past several decades, the Gini coefficient in the United States has generally been increasing. This trend indicates a widening gap between the rich and the poor, signifying growing income disparity.
2. Which ethical principle requires an investment adviser to treat all clients fairly and not favor certain clients at the expense of others?
The principle of fair dealing requires advisers to treat all clients equitably, including allocation of investment opportunities and pricing of services.
3. Interest rate risk primarily affects which type of investment?
Bond prices move inversely to interest rates — when rates rise, existing bond prices fall — making fixed-income investments most exposed to interest rate risk.
4. A bond with a face value of $1,000, a coupon rate of 6%, and a market price of $1,050 is said to be trading at:
When a bond's market price exceeds its face (par) value, it is trading at a premium.
5. The monopsonistic employer keeps adding staff until it reaches the marginal level.
A monopsonistic employer, being the sole buyer of labor, maximizes profit by hiring workers up to the point where the marginal revenue product of labor equals the marginal labor cost. The marginal revenue product represents the additional revenue generated by hiring one more worker. The marginal labor cost is the additional cost incurred to hire that worker, which includes any wage increases for existing staff.
6. Which one of the following asset allocations is market-dependent?
Tactical asset allocation is a dynamic strategy that involves making short-term adjustments to a portfolio's asset mix based on current market conditions and economic outlook. Unlike strategic asset allocation, which sets long-term target percentages, tactical allocation actively seeks to capitalize on perceived market inefficiencies or short-term opportunities, making it inherently market-dependent.