Free CAIA Level II Emerging Topics Practice Questions
Practice 20 free Emerging Topics questions for CAIA Level II.
Sample Questions
Question 1
Easy
Which of the following best describes tokenization of alternative assets?
Solution
A is correct. Tokenization creates digital tokens on a distributed ledger that represent fractional ownership or other economic rights in an underlying asset (real estate, private equity stakes, art, infrastructure). The structure enables fractional access, programmable transferability, and potential secondary-market liquidity for traditionally illiquid alternative investments.
Question 2
Medium
An adviser to a US private equity fund is preparing to comply with the SEC's Private Fund Adviser Rules. Which practice most directly addresses the rule's quarterly statement requirement?
Solution
A is correct. The Private Fund Adviser Rules require advisers to deliver quarterly statements that disclose, in a standardized format, fund-level fees and expenses, adviser compensation, and performance metrics. The objective is to give limited partners comparable, timely information across funds and prevent selective disclosure. Standardized periodic LP reporting is precisely the conduct the quarterly-statement rule is designed to enforce.
Question 3
Hard
A sovereign wealth fund with a 50-year horizon is repositioning its portfolio in response to deglobalization pressures and a rapidly aging domestic population. Which allocation shift best reflects the combined influence of both structural forces?
Solution
A is correct. Deglobalization raises the cost and risk of cross-border capital flows, favoring assets whose cash flows are anchored in the home jurisdiction and less exposed to sanctions, tariffs, or capital controls. An aging domestic population simultaneously raises long-horizon demand for healthcare capacity and stable real-asset income streams to fund retirement liabilities. Tilting to domestic real assets and healthcare infrastructure while reducing cross-border equity beta addresses both forces in one coherent rebalancing.