Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What does a Commodity Pool Operator do?

1. Invests money in real estate

2. Trades only stocks and bonds

3. Operates or solicits funds for a commodity pool

4. Manages private equity funds

The correct answer is: Operates or solicits funds for a commodity pool

A Commodity Pool Operator, or CPO, is specifically responsible for operating or soliciting funds for a commodity pool. A commodity pool is an investment vehicle akin to a mutual fund but focused on commodities, which may include agricultural products, metals, energy resources, and more. The operator pools together money from various investors to invest that capital into futures contracts, options, and swaps related to commodities. This role is distinct because it requires an understanding of the unique regulatory environment surrounding commodity investing, including adherence to the rules established by the Commodity Futures Trading Commission (CFTC). By operating a commodity pool, the CPO assumes a fiduciary duty to its investors, managing the risks and returns associated with the commodity markets. The other options pertain to different areas of investment management. Investing in real estate is not a function of a CPO, as it does not involve commodities specifically. Trading only stocks and bonds relates to traditional securities markets and typically falls under the purview of stock brokers or investment advisors, rather than commodity-focused investment. Managing private equity funds involves investing in private companies or buyouts, which differs significantly from the activities undertaken by a Commodity Pool Operator. Thus, the definition and responsibilities of a Commodity Pool Operator center around the specific functions of managing and solic