Prepare for the Investment Advisor exam with our free practice test modules. Each quiz covers key topics to help you pass on your first try.
Try these questions from our free Investment Advisor practice tests. The correct answer and an explanation follow each question.
Under the Investment Advisers Act of 1940, an investment adviser has a fiduciary duty to act in the best interest of whom?
Answer: B. The client
Investment advisers owe a fiduciary duty to their clients, requiring them to act in the client's best interest at all times.
Which of the following is considered an 'investment adviser' under the Investment Advisers Act of 1940?
Answer: B. A firm that manages client portfolios for a fee
A firm that manages client portfolios for compensation meets all three prongs of the adviser definition: advice, about securities, for compensation.
Under the Investment Advisers Act of 1940, which threshold generally requires an investment adviser to register with the SEC?
Answer: B. $100 million in assets under management
Investment advisers with $100 million or more in assets under management generally must register with the SEC rather than state regulators.
Under SEBI Investment Adviser Regulations, an investment adviser providing advice on securities must ensure the advice is based on which primary criterion?
Answer: B. The client's risk profile and investment objective
SEBI regulations mandate that investment advice must be grounded in the client's individual risk profile and stated investment objectives.