CPFA — Certified Private Fund Advisor Investment Practice Questions

A client approaches you with a high-risk tolerance but limited knowledge of investment types. How should you proceed?

• AA. Avoid investing altogether
• BB. Educate them thoroughly on all options
• CC. Suggest a blend of investments
• DD. Invest all their funds in stocks

A client asks about the tax implications of their investment in a private fund. What should your main focus be?

• AA. Ignoring tax implications
• BB. Discussing capital gains tax
• CC. Highlight potential gains
• DD. Minimizing their tax burden

How should you handle a situation where a fund's management changes mid-investment?

• AA. Withdraw funds immediately
• BB. Re-evaluate investment strategy
• CC. Stay with the existing plan
• DD. Ignore the change