Managed Products Overview

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Questions and Answers

What is required for a proposed annuitant to have their life insured?

A medical examination must be completed.

The proposed annuitant must consent in writing. (correct)

The contract holder must sign the policy.

The beneficiary must agree to the insurance.

Which statement accurately describes a revocable beneficiary designation?

It requires the beneficiary to have an insurable interest.

It cannot be changed without beneficiary consent.

It must be designated as irrevocable after the first year.

It allows the contract holder to revoke the beneficiary's rights. (correct)

What is the minimum maturity guarantee required by provincial legislation for segregated funds?

100% of the amount invested if the contract term is 5 years.

75% of the amount invested over a minimum 10-year term. (correct)

50% of the amount invested over any contract term.

100% of the amount invested with no term requirements.

Which of the following can be a beneficiary under a contract?

An organization such as a charity. Signup and view all the answers

What characteristic is associated with segregated funds that increases the management expense ratio (MER)?

Full maturity protection after longer terms. Signup and view all the answers

What percentage of maturity guarantee is typically associated with a 10-year holding period in segregated fund contracts?

75% Signup and view all the answers

Which of the following statements accurately describes the reset dates for segregated fund contracts?

Reset dates can be established as frequently as daily. Signup and view all the answers

What is one potential restriction insurers may impose for enhanced maturity guarantees?

The insured person must not be older than 80 when issued. Signup and view all the answers

In a falling market, how does the maturity guarantee protect contract holders?

By resetting the contract to the previous high value. Signup and view all the answers

What is the primary benefit of having a death benefit in segregated fund contracts?

It provides protection against market volatility at the time of death. Signup and view all the answers

Which of the following accurately describes the relationship between death benefits and maturity guarantees in segregated funds?

Both death benefits and maturity guarantees can be 100%. Signup and view all the answers

What determines the amount of death benefit payable at the time of death?

The net asset value of the fund minus fees at the time of death. Signup and view all the answers

What is the maximum limit on illiquid assets for closed-end funds relative to their NAV?

25% Signup and view all the answers

Which investment strategy is typically restricted in open-end funds but allowed in closed-end funds?

Short selling Signup and view all the answers

Why might a portfolio of closed-end funds reduce risks associated with varying discounts?

They have a low degree of correlation with each other. Signup and view all the answers

What is one advantage of closed-end funds over open-end funds regarding investment strategy?

They allow for long-term investment strategies without liquid asset reserves. Signup and view all the answers

How are capital gains, dividends, and interest distributions typically managed in closed-end funds?

They are paid directly to investors. Signup and view all the answers

What did the mutual fund modernization amendments to NI 81-102 achieve for closed-end funds?

Aligned their investment restrictions with alternative mutual funds. Signup and view all the answers

What is the impact of a fixed number of units in a closed-end fund?

It allows for easier tracking of capital gains and other distributions. Signup and view all the answers

Which statement best describes the liquidity requirements for closed-end funds compared to open-end funds?

Open-end funds must maintain liquidity for potential redemptions. Signup and view all the answers

What condition allows existing closed-end funds to avoid the changes from the amendments?

They are grandfathered as long as they do not make another public offering. Signup and view all the answers

What is a primary advantage of investing in a listed private equity company compared to traditional private equity investment?

Better access to capital and liquidity Signup and view all the answers

Which of the following statements correctly describes the nature of a listed private equity firm's investments?

Their investments can include both publicly traded and privately held companies. Signup and view all the answers

What transformation has occurred over the past decade concerning private equity companies?

A significant number of private equity firms have begun listing on stock exchanges. Signup and view all the answers

Which financial market characteristic applies to shares of a listed private equity company?

They can be purchased and sold like shares of any other publicly traded company. Signup and view all the answers

How does the structure of a listed private equity company typically differ from traditional private equity firms?

They must adhere to regulatory and reporting requirements as publicly traded entities. Signup and view all the answers

In what ways can investors benefit from investing in a listed private equity company?

They gain access to exclusive investment opportunities unavailable to retail investors. Signup and view all the answers

Which sector is NOT mentioned as part of ABC Corp's investment holdings?

Technology Signup and view all the answers

Which of the following is a significant reason for the rise of listed private equity companies?

Improved liquidity and transparency in investment processes. Signup and view all the answers

What describes ABC Corp's primary strategy in utilizing its capital?

Targeting small to mid-size privately held investment opportunities. Signup and view all the answers

Study Notes

Other Managed Products

Additional types of managed products include their structure, characteristics, regulatory issues, and tax considerations
Learning objectives include describing the features and structure of segregated funds, comparing advantages and disadvantages of Labor-Sponsored Venture Capital Corporations, defining closed-end funds, differentiating among income trusts, and describing advantages, disadvantages, and processes for investing in private equity
Content areas include segregated funds, Labor-Sponsored Venture Capital Corporations, closed-end funds, income trusts, and listed private equity
Key terms are defined in the glossary and are bolded within the chapter
Key terms include allocation, insurable interest, interval funds, irrevocable designation, and segregated funds, among others

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Description

This quiz covers various types of managed products, focusing on their structures, characteristics, and regulatory issues. It includes topics such as segregated funds, Labor-Sponsored Venture Capital Corporations, and private equity. Test your understanding of key terms and the advantages and disadvantages of these investment vehicles.