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. Which metric measures the percentage of a company's earnings paid out as dividends? → Payout ratio
2. Which of the following is NOT a fiduciary duty of a SEBI-registered investment adviser? → Ensuring client portfolio always generates profit
3. The Social Security full retirement age (FRA) for individuals born in 1960 or later is: → 67 years old
4. The Efficient Market Hypothesis (EMH) in its strong form asserts that: → Stock prices reflect all public and private (insider) information
5. An investor who is 'long' a put option on a stock profits when: → The stock price falls below the strike price
6. A portfolio returned 10% while the market returned 8%. If the portfolio's beta is 1.0 and the risk-free rate is 4%, what is the portfolio's Jensen's alpha? → 2%
7. An investment adviser recommends a mutual fund scheme in which the adviser's family member holds a significant stake. This is best described as: → A conflict of interest
8. Under the Investment Advisers Act of 1940, an investment adviser has a fiduciary duty to act in the best interest of whom? → The client
9. 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
10. A client's portfolio earns 12% while the benchmark returns 9%. The portfolio's tracking error is 3%. The Information Ratio is: → 1.0
11. At what age must holders of Traditional IRAs begin taking Required Minimum Distributions (RMDs)? → 73
12. Under the SEC's Regulation Best Interest (Reg BI), broker-dealers must act in whose best interest when making recommendations? → Their retail customers
13. 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
14. 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
15. A portfolio has a beta of 1.4. If the market rises by 10%, the expected portfolio return (ignoring alpha) is: → 14%
16. According to the Dividend Discount Model (DDM), what is the primary driver of a stock's intrinsic value? → Present value of expected future dividends
17. Which retirement plan type allows self-employed individuals the highest contribution limits? → Solo 401(k)
18. Under the Efficient Market Hypothesis (EMH) in its strong form, which type of analysis would be unable to consistently produce excess returns? → Both technical and fundamental analysis
19. A 50-day moving average crossing above a 200-day moving average is commonly known as a: → Golden cross
20. What is the primary advantage of Treasury Inflation-Protected Securities (TIPS) over nominal Treasury bonds? → TIPS principal adjusts with the Consumer Price Index, preserving purchasing power
21. What is the key difference between a closed-end fund and an open-end mutual fund? → Closed-end funds issue a fixed number of shares that trade on an exchange
22. 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
23. 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
24. A real estate investment trust (REIT) is required to distribute what minimum percentage of its taxable income to shareholders to maintain REIT status? → 90%
25. Which document must an investment adviser mandatorily provide to a new client BEFORE rendering any investment advice? → Disclosure document as specified by SEBI
26. A stock's beta is 1.5. If the overall market rises by 10%, how much would this stock be expected to rise? → 15%
27. EBITDA is most useful as a valuation metric because it: → Approximates operating cash flow by excluding non-cash and financing items
28. 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
29. The Sharpe ratio measures portfolio performance by: → Dividing excess return over the risk-free rate by portfolio standard deviation
30. 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