Certified Fund Specialist (CFS) Practice
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. Which of the following best describes the role of
a Certified Fund Specialist (CFS)?
a. Conducting legal audits of investment funds
b.Providing tax preparation services
c. Advising clients on mutual funds and other pooled
investments
d.Managing corporate pension plans
CFS professionals specialize in analyzing, selecting,
and monitoring mutual funds, ETFs, and other pooled
investments for clients.
2. What is the primary goal of portfolio diversification?
a. Increase volatility
b.Maximize short-term profits
,c. Reduce unsystematic risk
d.Eliminate all types of risk
, Diversification spreads investments across asset
classes to reduce exposure to specific risks without
eliminating market risk.
3. Which type of mutual fund continuously issues and
redeems shares at net asset value (NAV)?
a. Closed-end fund
b.Open-end fund
c. Hedge fund
d.Exchange-traded note
Open-end funds are mutual funds that sell and
redeem shares directly with the fund company at
the NAV.
4. The Net Asset Value (NAV) of a mutual fund is
calculated by:
a. Market price divided by liabilities
b.(Total assets – liabilities) ÷ number of outstanding
shares
c. Total assets × liabilities
d.Dividends ÷ number of shares
NAV measures the per-share value of a mutual fund
and is recalculated daily.
5. A fund’s prospectus is primarily designed to:
a. Set fund pricing
, b.Advertise fund performance
c. Disclose investment objectives, risks, and fees
d.Limit investor purchases
Exam Questions And Correct Answers
(Verified Answers) Plus Rationales
2025|2026 Q&A | Instant Download Pdf
1. Which of the following best describes the role of
a Certified Fund Specialist (CFS)?
a. Conducting legal audits of investment funds
b.Providing tax preparation services
c. Advising clients on mutual funds and other pooled
investments
d.Managing corporate pension plans
CFS professionals specialize in analyzing, selecting,
and monitoring mutual funds, ETFs, and other pooled
investments for clients.
2. What is the primary goal of portfolio diversification?
a. Increase volatility
b.Maximize short-term profits
,c. Reduce unsystematic risk
d.Eliminate all types of risk
, Diversification spreads investments across asset
classes to reduce exposure to specific risks without
eliminating market risk.
3. Which type of mutual fund continuously issues and
redeems shares at net asset value (NAV)?
a. Closed-end fund
b.Open-end fund
c. Hedge fund
d.Exchange-traded note
Open-end funds are mutual funds that sell and
redeem shares directly with the fund company at
the NAV.
4. The Net Asset Value (NAV) of a mutual fund is
calculated by:
a. Market price divided by liabilities
b.(Total assets – liabilities) ÷ number of outstanding
shares
c. Total assets × liabilities
d.Dividends ÷ number of shares
NAV measures the per-share value of a mutual fund
and is recalculated daily.
5. A fund’s prospectus is primarily designed to:
a. Set fund pricing
, b.Advertise fund performance
c. Disclose investment objectives, risks, and fees
d.Limit investor purchases
