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  CMFAS RES 1A (Set 2)

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  5 Feb 2026

  CMFAS RES 1A Exam Question

  The expense ratio refers to the ongoing costs of operating a fund by fund managers expressed as a percentage of the fund's:

  a) average net assets

  b) total net assets

  c) average return on investment

  d) total return on investment

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  CMFAS RES 2B (Set 1)

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  5 Feb 2026

  CMFAS RES 2B Exam Question

  Which of the following best describes “margin requirements” in derivatives trading under the Securities and Futures Act (SFA)?

  a) Margin requirements are the amount of capital a financial institution must hold to cover any potential losses on a derivative transaction.

  b) Margin requirements are designed to protect the client from any losses in the derivatives market.

  c) Margin requirements are set by the client, based on their own risk tolerance and trading strategy.

  d) Margin requirements are used to ensure that financial institutions are adequately capitalized to withstand potential default risks in derivatives transactions.
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  CMFAS RES 12B (Set 1)

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  5 Feb 2026

  CMFAS RES 12B Exam Question

  A dealer receives a call from a client instructing them to purchase a security that the dealer knows is highly speculative and unsuitable for the client’s risk tolerance. However, the client insists on executing the trade. Which of the following is the most appropriate action?

  a) The dealer should proceed with the trade, as the client is responsible for their own investment decisions.

  b) The dealer should explain the risks involved, attempt to dissuade the client, but ultimately execute the order if the client insists.

  c) The dealer must refuse to execute the trade, as it is clearly unsuitable for the client.

  d) The dealer should execute the trade immediately but document the client’s insistence on the trade to protect themselves from potential future complaints.