Q. An investment management agreement between a firm and a client is most likely an:

1. ad hoc document.
2. internal document.
3. external document.

Q. A convertible bond:

1. is a hybrid security.
2. usually trades below its conversion value.
3. typically gives the issuer the right to convert it into a pre-specified number of shares.

Q. The CFA Institute Code of Ethics stipulates that members must:

1. concentrate on the integrity and viability of domestic capital markets over international markets.
2. maintain and improve their professional competence as well as that of other investment professionals.
3. reference consensus opinions whenever researching an investment option or acting on an investment decision.

Q. Which of the following is a need served by participants within the investment industry?

1. Custodial services
2. Monetary policy actions
3. Regulation enforcement

Q. The party that settles trades after the trades have been arranged is known as the:

1. auditor.
2. fund manager.
3. clearing house.

Q. A vehicle in which investment professionals promise to implement a specific active strategy in exchange for a single flat fee is known as:

1. an index fund.
2. a hedge fund.
3. a managed account.

Q. The underlying asset of a derivative contract can be a:

1. real asset only.
2. financial asset only.
3. real or financial asset.