Investment Funds and Risk Management

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Questions and Answers

Which of the following funds is likely to have the highest risk?

Hedge Fund (correct)
Equity Fund
Money Market Fund
Balance Fund

Which of the following investor requirements can unit trust funds meet?

Short term savings
Children's Education
Retirement Fund
All of the above (correct)

What is the total value of Mr. Dave's investment at the end of May?

RM2,500
RM2,000
RM4,500 (correct)
RM3,000

What is the Net Asset Value (NAV) per unit of Mr. Dave's investment in June?

RM0.70 (D) Signup and view all the answers

Which of the following funds would be suitable for a 20-year-old employee with a high risk tolerance?

Growth Fund (B) Signup and view all the answers

What is the primary goal of the Capital Market Masterplan?

To increase awareness of the Malaysian Islamic Capital Market (C) Signup and view all the answers

What is the main advantage of investing in a unit trust?

Diversification of investments (D) Signup and view all the answers

What is the main difference between a Hedge Fund and a Balance Fund?

Risk level (B) Signup and view all the answers

What is the formula to calculate NAV per unit ex distribution?

NAV cum distribution / units in circulation (C) Signup and view all the answers

Why is UTS an ideal way of investing for an investor who is unable or unwilling to do research and analyze the investment market?

Because it provides professional management (D) Signup and view all the answers

What is one of the benefits of investing in UTS that reduces risk?

Diversification (C) Signup and view all the answers

What is the primary function of the Securities Commission?

To regulate the unit trust industry (A) Signup and view all the answers

What is the benefit of UTS that allows investors to easily redeem their investments?

Ready access to funds (D) Signup and view all the answers

What is the role of the Securities Commission in relation to licensed persons?

To supervise and license them (A) Signup and view all the answers

What is the correct calculation to determine the amount received from the repurchase of units in Fund XYZ?

Number of units x NAV per unit ex distribution (D) Signup and view all the answers

What is NOT a function of the Securities Commission?

Providing investment advice to investors (A) Signup and view all the answers

What is the initial investment amount of the money market fund?

RM100,000 (D) Signup and view all the answers

What is the on-going management fee of the money market fund?

1.4% (C) Signup and view all the answers

What is the rate of return of the money market fund?

11% (D) Signup and view all the answers

What is the value of the investment after 10 years if the initial entry cost decreased to 6%?

RM235,938.96 (B) Signup and view all the answers

How long does it take to increase the investment amount to RM200,000 with the effective rate of return from question 28?

7.5 years (A) Signup and view all the answers

What is the total expense incurred by the ABC Millennium Fund during the financial year?

RM3,725,717 (A) Signup and view all the answers

What is the MER of the ABC Millennium Fund?

1.58% (A) Signup and view all the answers

If Mr. Eddie invested RM10,000 today, how many units is he getting if forward pricing is applied?

15,384.62 units (A) Signup and view all the answers

What is the characteristic of an investor who focuses on long-term returns?

Higher risk tolerance in the short-term (D) Signup and view all the answers

How is the price of a listed security determined?

By buyers and sellers in the market (C) Signup and view all the answers

What type of equity UTS generally invests in companies with higher capital growth potential but with associated higher risk?

Aggressive growth (C) Signup and view all the answers

What is the main advantage of using the Rule of 72?

To estimate the number of years required to double an investment (A) Signup and view all the answers

What is the impact of a rising share market on the value of units in equity UTS?

It normally results in an increase in the value of units (C) Signup and view all the answers

What is a disadvantage of investing in a UTMC?

Loss of control over investment portfolio (B) Signup and view all the answers

What does a gradually decreasing MER over a period of several years indicate?

Efficient management of operating costs for its fund size (B) Signup and view all the answers

What is the formula to calculate the effective rate of return?

Rate of return - (Rate of return X tax rate) (D) Signup and view all the answers

What is one of the benefits of investing in a Unit Trust Scheme (UTS)?

Easy access to funds (D) Signup and view all the answers

What is the concept of systematic and regular investment of a fixed amount of money?

Regular investment plan (A) Signup and view all the answers

How can an investor determine the number of units held during redemption?

By dividing the investment amount by the NAV per unit (C) Signup and view all the answers

What is a useful tool for monitoring investment performance in UTS?

Performance tables published by research houses (B) Signup and view all the answers

What is the primary asset class in an equity UTS portfolio?

Shares of listed companies (D) Signup and view all the answers

How is the NAV per unit calculated?

By dividing the total NAV by the total number of units in circulation (D) Signup and view all the answers

What is the role of UTC in UTS transactions?

To assist in buying and selling units (B) Signup and view all the answers

What is the effect of a distribution on the NAV per unit?

It decreases the NAV per unit (A) Signup and view all the answers

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