AIF Exam Questions and Verified
Answers |Already Graded A+| 2026
Brand New Version!!!
Non-diversification Consideration - Correct Answer -Before investing a substantial
portion of plan assets in one investment, the fiduciary should investigate and
document the reasons why the investment is prudent and how the risk of large
loss resulting from non diversification will be mitigated.
UPMIFA Special Considerations - Correct Answer -A decision to rely on the
exception for diversification under exception circumstances of UPMIFA must e
based on the needs of the charity and not solely for the benefit of the donor.
MMPERSA Considerations - Correct Answer -a Trustee is required to diversify the
investments of the retirement program unless the trustee reasonably determines
that because of special circumstances it is clearly prudent not to do so.
Capital Market Assumptions (CMAs) - Correct Answer -Are the risk, projected
return and correlation inputs for asset allocation modeling.
,Asset Allocation Modeling Inputs Required - Correct Answer -1) Projected return
2) Standard Deviation
3) Correlation Coefficient
Projected return - Correct Answer -the modeled return assumption that will e
used for each asset class
Standard deviation - Correct Answer -the probable level of variability each asset
class will exhibit
Correlation Coeffiecient - Correct Answer -estimate of the degree to which each
asset class will perform relative to another. (Historically, equities and fixed income
returns have not been similar over the same period of time. Therefore, they
would have low correlation.)
Annuities - Correct Answer -Long been considered taboo for retirement plans
Stress Test - Correct Answer -Analyzing possible outcomes (Worst case, most likely,
and best case) over different time horizons. Should answer:
, 1) Will the investment results enable client to cover short and long term liabilities
or objectives?
2) Can the client stomach the worst case?
Foreign Securities - Correct Answer -Foreign Securities are required to comply
with SEC rule17f-5 (If securities or assets are held in custody outside of the US by
an entity that is no a US registered investment company, legal counsel should be
consulted to ensure that foreign laws impose appropiate requirements that
protect portfolio assets.
Cyber Security - Correct Answer -1) Identify the assets at risk
2) Protect assets from compromise
3) Detect possible breaches through ongoing monitoring
4) respond to breaches by taking action and containing the impact
5) Recover from breach by understanding what happened, restore capabilities and
making improvements.
Fidelity Bond - Correct Answer -Under ERISA, advisors should ensure that a fidelity
ond is in place to reimburse the plan in event that fraud or dishonest acts result in
losses.
Answers |Already Graded A+| 2026
Brand New Version!!!
Non-diversification Consideration - Correct Answer -Before investing a substantial
portion of plan assets in one investment, the fiduciary should investigate and
document the reasons why the investment is prudent and how the risk of large
loss resulting from non diversification will be mitigated.
UPMIFA Special Considerations - Correct Answer -A decision to rely on the
exception for diversification under exception circumstances of UPMIFA must e
based on the needs of the charity and not solely for the benefit of the donor.
MMPERSA Considerations - Correct Answer -a Trustee is required to diversify the
investments of the retirement program unless the trustee reasonably determines
that because of special circumstances it is clearly prudent not to do so.
Capital Market Assumptions (CMAs) - Correct Answer -Are the risk, projected
return and correlation inputs for asset allocation modeling.
,Asset Allocation Modeling Inputs Required - Correct Answer -1) Projected return
2) Standard Deviation
3) Correlation Coefficient
Projected return - Correct Answer -the modeled return assumption that will e
used for each asset class
Standard deviation - Correct Answer -the probable level of variability each asset
class will exhibit
Correlation Coeffiecient - Correct Answer -estimate of the degree to which each
asset class will perform relative to another. (Historically, equities and fixed income
returns have not been similar over the same period of time. Therefore, they
would have low correlation.)
Annuities - Correct Answer -Long been considered taboo for retirement plans
Stress Test - Correct Answer -Analyzing possible outcomes (Worst case, most likely,
and best case) over different time horizons. Should answer:
, 1) Will the investment results enable client to cover short and long term liabilities
or objectives?
2) Can the client stomach the worst case?
Foreign Securities - Correct Answer -Foreign Securities are required to comply
with SEC rule17f-5 (If securities or assets are held in custody outside of the US by
an entity that is no a US registered investment company, legal counsel should be
consulted to ensure that foreign laws impose appropiate requirements that
protect portfolio assets.
Cyber Security - Correct Answer -1) Identify the assets at risk
2) Protect assets from compromise
3) Detect possible breaches through ongoing monitoring
4) respond to breaches by taking action and containing the impact
5) Recover from breach by understanding what happened, restore capabilities and
making improvements.
Fidelity Bond - Correct Answer -Under ERISA, advisors should ensure that a fidelity
ond is in place to reimburse the plan in event that fraud or dishonest acts result in
losses.
