Questions and Answers
What is a primary factor that influences a person's investment behavior?
Which type of investment is characterized by lower risk and capital preservation?
What is a common characteristic of moderate risk investors?
What type of investment primarily aims for capital gains and high yields?
Signup and view all the answers
Why are bonds considered debt securities?
Signup and view all the answers
Which type of investment is least likely to be categorized as aggressive?
Signup and view all the answers
What defines the risk profile of an individual when searching for suitable investments?
Signup and view all the answers
Which of the following is an example of a higher-risk investment?
Signup and view all the answers
What happens to callable bonds if interest rates are expected to fall?
Signup and view all the answers
Which statement best describes the relationship between bond yield and bond price?
Signup and view all the answers
How does the call feature of a bond impact its initial pricing for investors?
Signup and view all the answers
What is the effect of higher coupon payments on bond prices, all else being equal?
Signup and view all the answers
What is a characteristic of a call protection period?
Signup and view all the answers
What generally happens to the price of a bond as its maturity increases, assuming the coupon rate and yield are constant?
Signup and view all the answers
Which risk is primarily associated with changes in the yield that affects bond pricing?
Signup and view all the answers
In what way do fixed coupon payments serve as a buffer against changes in bond price?
Signup and view all the answers
What is the minimum number of shares required to be entitled to receive 1 bonus share?
Signup and view all the answers
If an investor owns 5,000 shares and receives a bonus issue, how many total shares will they have after the bonus issue?
Signup and view all the answers
What is the ex-bonus issue price if the original holding is RM8,250 and the total shares after the bonus issue is 6,000?
Signup and view all the answers
What was the subscription price for the rights issue announced by Bersatu Tegas Berhad?
Signup and view all the answers
What is the market price per share just before the rights shares were issued?
Signup and view all the answers
What is the date by which the entitlement for the rights issue must be exercised?
Signup and view all the answers
In the rights issue, how many rights shares can a shareholder receive if they own 25 shares?
Signup and view all the answers
What calculation determines the ex-right price based on the bonus issue?
Signup and view all the answers
What is the total value of Raymond Lee's investment before the share split?
Signup and view all the answers
How many shares will Raymond Lee have after the 3 for 1 share split?
Signup and view all the answers
What happens to the price per share after a share split?
Signup and view all the answers
What does fundamental investing primarily focus on?
Signup and view all the answers
Which statement about technical analysis is correct?
Signup and view all the answers
What is dollar cost averaging?
Signup and view all the answers
What is the primary characteristic of share margin trading?
Signup and view all the answers
How does a reverse share split affect the price values of shares?
Signup and view all the answers
What is the minimum period to review and monitor the performance of a company before considering an investment?
Signup and view all the answers
What right does an ordinary shareholder have during the annual general meeting?
Signup and view all the answers
Which of the following is considered a systematic risk in the stock market?
Signup and view all the answers
What type of risk is business risk categorized as?
Signup and view all the answers
What should an investor do if they are considering adding to their shareholding?
Signup and view all the answers
Which of the following is NOT a recommended action for shareholders?
Signup and view all the answers
What is one of the primary purposes of attending the annual general meeting as a shareholder?
Signup and view all the answers
What can result from business risk affecting a company?
Signup and view all the answers
Study Notes
Investment Attitudes and Influences
- Attitudes towards investing can develop from upbringing, personal experiences, and special circumstances.
- Past investment experiences can shape future behavior and choices in investments.
- Unexpected life events, such as retrenchment or health issues, may drastically affect investment decisions.
Investment Planning and Risk Profile
- Identifying an individual's risk profile is essential before selecting suitable investments.
- Risk profiles can be categorized as lower, moderate, or aggressive.
Malaysian Investment Types
-
Lower Risk Investments:
- Fixed Deposits
- Amanah Saham Bumiputra (ASB) and Amanah Saham Wawasan 2020 (ASW)
- Tabung Haji
- Unit Trusts: Balanced, Money Market, Fixed Income/Bond Funds
-
Moderate Risk Investments:
- Unit Trusts: Balanced, Equity, and Index Funds
- Commodities such as gold
- Public Listed Shares
- Property investments including REITs
-
Aggressive Risk Investments:
- Unit Trusts: Aggressive Funds, International or Sectoral Funds
- Hedge Funds and Foreign Investments
- Foreign exchange and commodities
- Speculative shares in the stock market and various property investments (land, commercial, residential)
Understanding Bonds
- Bonds act as debt securities for companies that need to finance large projects.
- Callable bonds allow issuers to redeem them early if prevailing interest rates fall.
- Risks associated with bonds include interest rate risk, where bond price inversely correlates with changes in yield.
Bond Valuation Factors
- Interest Rate Changes: Higher yield results in lower bond prices and vice versa.
- Coupon Rates: Fixed coupon payments provide a buffer; higher coupons typically lead to higher bond prices.
- Bond Maturity: Longer maturities generally lead to higher bond prices for similar yields.
- Call Features: Bonds with call capabilities can affect investor returns.
Investment Risks
- Bond Risks: Interest rate risk may impact pricing; always review company performance.
- Share Risks: Market risk affects all financial products; business risk is specific to individual companies.
Impact of Corporate Actions
- Ex-Bonus Issues: Shareholders may receive bonus shares based on original holdings, altering the average purchase price.
- Rights Issues: Allow shareholders to buy additional shares at a specified price, affecting total investment value.
Share Splits and Valuation
- Share splits increase the number of shares and lower the individual share price without changing overall equity value.
- Reverse share splits raise share value and reduce share quantities.
Investment Strategies
- Fundamental Analysis: Focuses on evaluating a company's intrinsic value based on key growth drivers.
- Technical Analysis: Assumes share price reflects all fundamental information.
- Dollar Cost Averaging: Regular investment of the same amount over time to mitigate market volatility.
- Share Margin Trading: Involves borrowing funds to invest in additional shares, increasing both potential risk and reward.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz explores how attitudes, upbringing, and personal experiences shape investment behaviors and risk profiles. Understand the influence of unexpected events on investment decisions and learn about different types of investments. Test your knowledge on effective investment planning strategies.
