Questions and Answers
Who determines the portfolio of unit trust investment?
The fund manager
What is the primary benefit of investing in a unit trust?
Pooling of money with similar financial objectives
What is the characteristic of a unit trust?
Ownership of the fund is divided into units
What is the purpose of a bond fund?
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What is the advantage of investing in a bond fund?
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Which of the following actions increases the overall risk level of your portfolio?
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What is the difference between a unit trust and a bond fund?
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What is the major factor that financiers will assess in determining whether to extend credits to an investor who wished to finance a unit trust investment scheme?
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What is a characteristic of a unit trust investment?
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What is the role of a fund manager in a unit trust?
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What is the potential consequence of investing in unit trust with borrowed money?
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What is the benefit of shifting investment from stocks to money market?
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What is the primary consideration for an investor who wishes to finance a unit trust investment scheme with borrowed money?
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What is the potential risk of investing in unit trust with borrowed money?
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What is the primary benefit of shifting investment from stocks to bonds?
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What is the implication of changes in the base lending rate set by financiers on an investor who invested in unit trust with borrowed money?
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What is the effect on the client's savings if the initial service charge is reduced from 5% to 3% based on the selling price ex-distribution?
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What is the main characteristic of 'Liquid Assets' in the context of investment?
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What information is NOT typically found in the prospectus of a unit trust fund?
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What is the correct statement regarding the EPF members' withdrawal investment scheme?
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What is the purpose of a redemption or withdrawal fee charged by a unit trust scheme?
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What is the primary reason why a unit trust scheme would charge a redemption or withdrawal fee?
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What is the main advantage of having liquid assets in an investment portfolio?
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What is the primary purpose of a prospectus in a unit trust fund?
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What is the total number of units received by Hasnah for her investment made in Fund A and Fund B respectively?
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How many units was the investor entitled for the investment made in the first year?
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What is the total amount of money invested by the investor in the first and second year?
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What is the raw return of the investment made by the investor in the first year?
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What is the NAV per unit cum-distribution of Fund B?
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What is the NAV per unit ex-distribution of Fund B?
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What is the total amount of distribution declared by Fund B?
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What is the total amount of service charge charged by the manager of Fund B?
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What is a characteristic of a real estate investment trust (REIT)?
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What is not a valid statement about unit trusts?
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What is the main goal of observing professionalism in marketing unit trusts?
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What is a possible form of return on investment that an investor can expect from investing in unit trusts?
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How long will it take for Cik Jamal's investment to double in value if it continues to earn a 9% annual return?
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What is a characteristic of listed REITs?
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What is the main purpose of a unit trust?
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What is a key benefit of investing in unit trusts?
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Study Notes
Unit Trust Investment
- A unit trust investment is a mechanism that allows investors with similar financial objectives to pool their money.
- The portfolio of unit trust investments is determined by the fund manager.
- Unit holders do not directly purchase the securities, and ownership of the fund is divided into units.
Characteristics of Unit Trust
- Liquid assets are assets that can be converted into cash or sold easily in the market place.
- A unit trust is a professionally managed investment scheme.
- The value of a unit will fluctuate in line with the changes in the net asset value of the unit trust.
- Investors are entitled to receive a unit trust certificate or statement for their investment.
Fees and Charges
- A redemption or withdrawal fee is charged by some unit trust management companies when unit holders wish to withdraw.
- Fees and charges include investment objectives, authorized investments, and trust expenses.
Investment Risks
- Shifting investments from stocks to bonds can increase the overall risk level of a portfolio.
- Investors who invest in unit trusts with borrowed money will only make profits if returns from their investment are higher than the cost of their borrowings.
Unit Trust Management
- The major factor that end-financiers will assess in determining whether to extend credits to an investor who wishes to finance a unit trust investment scheme is the creditworthiness of the investors.
- Investors who invested in unit trusts with borrowed money need to keep on investing until the loan is fully settled.
Real Estate Investment Trust (REITs)
- The income of REITs is mainly derived from the rental income and the capital appreciation of the property held by the unit trust.
Marketing of Unit Trust
- To enhance professionalism in marketing of unit trust, it is important to provide superior service to clients and attend to their needs.
- Unit trust certificates or statements are provided to investors for their investment.
Returns on Investment
- The possible forms of returns on investment that an investor can expect from investing in unit trust include dividends, capital appreciation, and interest.
- The total number of units received by an investor for their investment made in a unit trust fund can be calculated based on the investment amount and the unit price.
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