AAMS Cheat Sheet 2026

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

1. What is a key factor in determining a portfolio’s risk? → The relationship between asset prices and returns
2. The 'step-up in cost basis' at death means that: → Inherited assets receive a new basis equal to fair market value at the date of death
3. What is a common measure of investment risk? → Standard deviation
4. Which of the following best describes 'tactical asset allocation' (TAA) compared to 'strategic asset allocation' (SAA)? → TAA makes short-term deviations from the long-term SAA target based on market views
5. A client with significant concentrated stock holdings has an implied constraint of: → Capital gains tax management and diversification risk
6. How does the AAMS body of knowledge relate to daily professional practice? → It provides the foundational framework that guides decision-making and standard practices
7. What is the importance of calculating investment performance? → To assess whether an investment strategy is effective
8. What distinguishes a 'growth at a reasonable price' (GARP) strategy from pure growth investing? → GARP combines growth criteria with valuation constraints to avoid overpaying
9. Which option strategy creates a 'collar' to protect against downside loss on a long stock position? → Buying a protective put and simultaneously selling a covered call
10. Which regulatory requirement is UNIVERSAL across all Accredited Asset Management Specialist practice settings? → Maintaining current certification and meeting continuing education requirements
11. A 'dynamic asset allocation' strategy that systematically reduces equity exposure as markets decline (to lock in gains) is known as: → Constant-proportion portfolio insurance (CPPI)
12. What is asset rebalancing? → Adjusting asset allocations to maintain the desired risk profile
13. Which professional standard requires asset managers to place client interests above their own? → Fiduciary standard
14. What is a key principle of the buy-and-hold investment strategy? → Holding assets for the long-term without reacting to short-term market changes
15. A client receives a large inheritance and tells her advisor. In the asset management process, this information triggers: → A review and potential update of the IPS
16. A client wants guaranteed income they cannot outlive. Which product is most appropriate? → Single Premium Immediate Annuity (SPIA)
17. When interest rates are expected to fall significantly, which bond strategy is most likely to produce the highest total return? → Extending portfolio duration to maximize price appreciation
18. What is the MOST effective way for new AAMS professionals to build competency in their field? → Combining formal education, mentored practice, and ongoing professional development
19. A portfolio manager reviews quarterly returns against a benchmark index. This activity is best described as: → Performance evaluation
20. An advisor identifies that a client's marginal tax rate is 37%. How should this most likely influence the asset management process? → Favor tax-efficient investments such as municipal bonds or tax-managed funds
21. A manager notices that a client's portfolio has consistently outperformed its benchmark but with significantly higher volatility. The advisor should: → Evaluate whether the risk taken is consistent with the client's IPS constraints
22. The 'quality' factor in smart-beta investing typically selects stocks based on which criteria? → High return on equity, low debt, and stable earnings
23. Which of the following is an example of a 'real' rate of return calculation? → 10% nominal return minus 3% inflation = 7% real return (approximate)
24. Which constraint in an IPS addresses the client's need to convert assets to cash on short notice without significant loss? → Liquidity constraint
25. A tactical asset allocation shift increasing equity exposure based on a perceived market undervaluation is best described as: → A short-term deviation from strategic allocation
26. Which retirement account type allows tax-free qualified withdrawals in retirement? → Roth IRA
27. Which Monte Carlo simulation output is most useful when evaluating retirement portfolio sustainability? → Probability of not depleting assets over the plan horizon
28. Which foundational principle is MOST important for success in the Accredited Asset Management Specialist profession? → Commitment to continuous learning, ethical practice, and quality outcomes
29. In asset selection, which quantitative screen would best identify stocks with strong earnings quality? → High cash flow relative to reported earnings
30. What does 'alpha' represent in the context of active asset selection? → Return in excess of a benchmark after adjusting for risk