FIMM Set 4 PDF

SET 4 1. Unit Trust scheme that was among the top ten performers last year is likely to : a) end up among the top ten performers this year b) be extremely di cult to predict how well a unit trust scheme will performed this year...

SET 4 1. Unit Trust scheme that was among the top ten performers last year is likely to : a) end up among the top ten performers this year b) be extremely di cult to predict how well a unit trust scheme will performed this year based on its performance last year c) rank somewhere in the middle this year d) be among the bottom ten unit trust scheme last year 2. What do you understand by the term “call margin” in relation to the nancing unit trust investment a) it is an amount the investor might have to pay his/her nancier if the credit exposure of a unit trust loan falls beneath a certain level b) it is a type of charges imposed on futures contract c) It is the nancier’s marked-up margin imposed on top of the based lending rate applicable for the unit trust loan d) It is a type of processing fees imposed by the nancier in relation to nancing of unit trust investment 3. In an investor is able to tolerate high risks and prefers long term capital gains to short term income, which of the following funds is the most suitable for her ? a) growth fund c) balanced fund b) Income fund d) bond fund 4. The fund manager of a unit trust scheme is allowed to charge a management fee. The fees……. a) mainly used to cover the management expenses incurred by the manager in managing the scheme b) Used for the purposed of registering the unit holders with the Trustee c) Levied by the manager on the investment made by investors to cover the commission paid to agent d) Also known as advisory fee charged by the Trustee 5. Unit Trust Scheme (UTS) is a) an investment scheme in which you are always guaranteed with positive return b) A fund when investor’s objective are always met c) Global fund aimed at stimulating investment in high technology projects d) An investment scheme which pools money from many investors who shares similar nancial objectives 6. If investment return is 10% per annum, marginal tax rate is 20%, and in ation rate is 5% per annum, what is e ective return after tax and in ation ? a) 3% b) 2.5% c) 5% d) 4% 7. From previous question it is clear that in ation can erode one’s purchasing power. How can an investor hedge against in ation ? a) cut down all the unnecessary expenses and keep the money at home b) None of the optional answer is correct c) Invest the money in an instrument that can generate higher returns than the in ation rate d) Lower the tax rate on the investment 8. For every unit trust fund, how many report must Unit Trust Management Company publish each nancial year for the unit holder ? a) at least one b) at least four c) at least three d) at least two 9. Which of the following is not true ? a) Generally, the portfolio of unit trust investment is determined by the fund manager b) Unit holders do not directly purchase the securities and ownership of the fund is divided into units c) The portfolio of investments is allowed to include only one asset class d) A unit trust is an investment mechanism which allows investors who shared similar nancial objectives to pool their money fl fi ffi fl fi fi fi fi fl fl fi fi fi ff fl  10. Which of the following is (are) true about Bond Fund ? i) It is best to buy when interest rates are peaking and bond yields are high ii) Manager’s fees and charges are generally lower compared to equity funds iii) Fund prices will falls when interest rates rise iv) No matter when you redeem your investment, you will get back at least your principal amount or your capital you had invested a) ii only b) all answers are correct c) i,ii, and iii d) i and iii 11. One of the major bene ts investing in unit trust is to gain access to the experienced of a professional fund manager. Which term best describes a professional fund manager ? a) Someone who has bought and sold so many investment in his lifetimes b) Someone who has been professionally trained in the eld of fund management c) Someone who always manages in excess of RM500 million d) A friend who always recommends the best stocks to buy 12. Which of the following could not be used as an investment benchmark when assessing investment performance ? a) The Kuala Lumpur Inter-bank O er Rate (KLIBOR) b) The current account situation as a percentage of a Gross Domestic Product (GDP) c) The 5 year bond rate d) The Kuala Lumpur Composite Index (KLCI) 13. _____________ is also the term used for the price at which units are sold to the public. It is similar to the unit Net Asset Value (NAV) of the unit trust fund. a) O er price c) Service charge b) Buying price d) Redemption price Question 14 and 15 are related : An investor had invested in a single amount of money in a unit trust fund at RM0.80 per unit in the rst year, and subsequently purchased another 20,000 units in the second year. At the end of the third year, he decided to redeem all his investment at Buying Price RM0.90 per unit and the total proceed was RM79,200 14. How many units was entitled for the investment he made in the rst year ? a) 68,000 units c) 88,000 units b) None answer is correct d) 79,200 units 15. How much did he invest in the rst year ? a) RM16,000 c) RM70,400 b) None answer is correct d) RM54.400 16. Assuming an investor is practicing the principle of Dollar Cost Averaging. Given the following data, calculate the average cost per unit for the investor Unit Prices Amount Invested Jan 200x RM0.50 RM1,500 Feb 200x RM0.60 RM1,500 Mac 200x RM0.70 RM1,500 a) RM0.59 b) RM0.62 c) RM0.61 d) RM0.060 ff fi ff fi fi fi fi  17. Pointing to the latest performance table, Mei Ling enthusiastically tells you “Look the OMG Small Cap Fund was up 36% last month. I think this fund may be best for me to invest.” Knowing choosing a fund merely based on the best record in the previous month is not in her best interest ; what other aspect would you advise her to look into before investing in the fund ? i) Consistency of the fund’s performance in medium to long term ii) Her own nancial goal and decide how much risks she can a ord to take iii) Suitability of the fund’s investment objectives and riskiness with her own investment goals and risk pro le iv) Total fees and charges imposed by the fund and the service level provided a) i and ii c) i , ii and iii b) All answers are correct d) ii and iii Question 18, 19 and 20 are related : Given data : i) Initial investment : RM80,000 ii) Term of Investment : 3 years iii) Expected investment return before fees and expenses : 10% per annum iv) On-going management fee : 1.5% per annum v) Initial service charge : 5% 18. Calculate the expected value of investment at the end of the third year a) RM97,317 c) RM102,183 b) RM106,480 d) RM101,156 19. Now assume that the on-going management fee is 1.0% instead of 1.5%, what is the expected value of investment at the end of third year a) RM98,669 c) RM103,602 b) RM106,480 d) RM101,156 20. How long does it approximately take for the expected value of the initial investment to reach RM160,000 ? a) 7.2 years c) 14.4 years b) 20.6 years d) 8.5 years 21. Which of the following are parties to a unit trust scheme ? i) Unit Trust Management Company ii) Trustee iii) Investment Manager iv) Unit Holder a) ii and iv c) i, ii and iv b) All answers are correct d) ii, iii and iv 22. If on Thursday, 4th June 200x, the published NAV per unit is RM0.6500 and the closing NAV per unit calculated at the end of the day is RM0.6600. With the information, if the investor was allocated 10,000 units for her investment made on the same day, how much money has she paid in total for her investment ? (Assume forward pricing policy was adopted and the applicable initial sales charge is 5%) a) RM6,600 b) RM6,825 c) RM6,500 d) RM6,930 fi ff fi 23. Choose the correct statements regarding Aggressive Growth Fund i) Generally, this fund invest in common stocks with a high potential for rapid growth and capital appreciation ii) This funds seek to provide maximum capital growth with less emphasis on distribution or interest income iii) These funds generally incur higher risks in an e ort to secure more pronounced growth iv) Investors who must conserve their principal or who must maximise current income are most suitable to invest in these funds a) I, ii and iii c) i, iii and iv b) All answers are correct d) ii, iii and iv Question 24, 25 and 26 are related : Net Asset Value cum distribution for a unit trust fund is RM200 million. Unit in circulation is 380 milllion units and the fund manager is charging a 5% initial service charge (please use 3 decimal places for calculation purpose) 24. If the distribution declared is 3.5 cent per unit, how much is the selling price ex-distribution a) RM0.49 b) RM1.96 c) RM1.86 d) RM0.52 25. Based on above answer and assume that a client invested RM10,000 ex-distribution, how many units will she get for her investment ? a) 20,408 units b) 5,102 units c) 5,120 units d) 19,434 units 26. If the initial service charge is reduce from 5% to 3% and based on the selling price ex-distribution, how much savings can the client get given the same number of units purchased in previous question ? a) RM326 b) RM200 c) RM327.95 d) RM184.93 27. “Liquid Assets” mean ______________ in the context of investment a) assets that cannot be sold easily and must be auctioned in order to obtain cash b) ensuring that there is always enough funds in the bank account c) assets that depends to a large extent on the level of cash and cash equivalent d) assets that can be converted into cash or sold easily in the market place 28. Which of the following can be found in the prospectus of unit trust fund ? i) Investment objectives iii) Fees & charges ii) Authorised investments iv) Trust expenses a) i, iii, and iv c) i, ii and iii b) All answers are correct d) i and iii 29. Which statement regarding the EPF members withdrawal investment scheme is CORRECT ? a) Investment can be made with any unit trust scheme b) Balance in account 2 is NOT eligible for this scheme c) Members can withdraw funds from the EPF once in every 2 months d) The maximum age for the quali ed member is 60 30. A redemption or withdrawal fee charged by a unit trust scheme is a) a fee charged by trustee b) a fee charged by some unit trust management companies when unit holder wished to withdraw c) a fee charged by banks on customer withdrawal from savings account d) a fee levied for customers who owns a unit trust scheme with redeeming features fi ff Question 31 and 32 are related : 31. Suppose that part of the asset allocation of fund X, and fund Y are as follows : Fund X Fund Y A) Equity 70% 0% B) Money Market 10% 85% Fund X is most appropriate to be classi ed as : a) Property fund c) Fixed income fund b) Money market fund d) Equity fund 32. Which of the following statement is (are) correct : i) When interest rate is decreasing, value of fund Y will be more adversely a ected ii) When interest rate is decreasing, value of fund Y will be more positively a ected iii) Value of fund X will be more positively a ected when the stock market is increasing a) ii and iii c) i and iii b) All answers are correct d) i only 33. What is the term used for an investor who ops to received their income distribution in the format of units instead of cash ? a) Cash distribution c) Distribution reinvestment b) Repurchase price d) Distribution 34. Dollar cost averaging is a) a systematic way of regular investment with xed amount of money b) a way to sell unit trust funds and minimised the capital gains c) a way to purchase unit trust funds and minimised the service charge d) a strategy that entails buying low and sell high 35. Which of the following is the most appropriate thing to do if you meet a person who has never invested in unit trust and does not feel comfortable to invest in unit trust ? a) Shows her the marketing brochure and take them back as you need to show the brochure to other clients b) Show her excellent performance record of the unit trust fund and tell her that her performance will repeat again this year c) Comfort her by letting her know that unit trust is an investment with no risk d) Let the potential investor have a prospectus and walk thru with her 36. Which of the following is associated with xed income unit trust a) Aggressive growth fund can be classi ed as xed income unit trust b) Generally the returns are lower than equity unit trust fund c) The performance of the trust is linked to the performance of equity market d) A major portion of the trust is generally held in securities in listed companies 37. What must be NOT SAY to potential investor ? i) Unit trust is as safe as xed deposit ii) The market value of your capital maybe lower than initially invested iii) Return in unit trust is not xed iv) You should diversify your portfolio and have some xed deposit a) ii, iii and iv c) i, ii and iii b) All answers are correct d) i only fi fi fi fi ff fi fi fi fi ff ff  38. One of your friend tells you “By the time I retire in year 2020, I believe the KLCI will be many times what is today. I’m happy with that. Give me a fund that can best deliver the same result”. What would you recommend to him ? a) Buy an Index Tracking Fund using KLCI as the benchmark b) For such a long investment horizon, don’t worry buy any funds c) Buy a Balance Fund because it’s investment return a less volatile than KLCI d) Buy a Growth Fund because it can give him return better than KLCI by year 2020 39. An important part of increasing return of a unit trust scheme is for the fund to borrow and invest a) This statement is true as this is the nature of investment b) None of the optional answer is correct c) This statement is wrong because unit trust scheme are not allowed to borrow d) This statement is true because it is a basic fundamental of principal of investment 40. A collective investment scheme is a) A collection of investment which cannot be sold without permission of the owners b) Another term used to describe a unit trust scheme c) An investment fund which invest only in speci c collection of shares d) A type of funds that allows everyone to collect money from others much like charities 41. A decrease in the MER calculated from the above indicates a) The UTMC is not managing the total fees and expenses well b) The UTMC is managing the total fees and expenses well c) The unit trust management company must be overpay for the administrative fee d) The annual management fee must be revised downward 42. In the annual report of ABC Millennium Fund, the expenses incurred by the fund using the nancial year 200x were : Annual Management Fee : RM3,528,673 Trustee Fee : RM150,326 Auditors Remuneration : RM16,300 Administrative Expenses : RM28,418 The average Net Asset Value for the period was RM235,500,528. Calculate the management expenses ratio (MER) of the fund for the nancial year. a) 0.07% b) 0.01% c) 1.58% d) 1.50% 43. Which of the following forms the minimum standards of conduct expected of registered person dealing in unit trust (PDUT) and are intended to be a guide to ascertain whether a registered PDUT is acting in a manner which continue to satis ed the minimum standard of registration ? a) Code of ethics and standards of professional conducts for multilevel marketing b) None of the optional answers are correct c) Code of ethics and standards of professional conducts d) Code of ethics and professionalism 44. In all investment related industries, what is the most important component for investors to have in product the are purchasing ? a) Risk b) Relationship c) Con dence d) Performance 45. To meet the challenges posed by the new and sophisticated customers, PDUT must strived to do the following EXCEPT : a) Hard sell b) Acquire suitable professional quali cation c) Fine tune their product knowledge d) Maintain high ethical standard in their marketing fi fi fi fi fi fi  46. The maximum initial service charge fee charged per each distribution channel has to be disclosed in the ______________ of the respective unit trust scheme a) Marketing material c) Prospectus b) All answers are correct d) Deed 47. In order to maintain honesty, dignity and integrity, a PDUT at all times must not misrepresent or recklessly represent ; a) The products and or its characteristic o ered by the management company he or she represent b) Those mentioned by all the optional answers c) His or her quali cation or that of the management company he or she represents d) The past performances of the unit trust scheme 48. Which of the following provides a common platform for UTMC to discuss issues in relating to the unit trust industries ? a) Securities Commission b) Ministry of Finance c) Federation of Malaysian Unit Trust Managers (FMUTM) d) Registrar of Companies 49. An investor had invested a total of RM200,000 in unit trust fund. How much has he obtain from the end nance year to nance his investment ? a) RM200,000 c) RM134,000 b) None of the option answer is correct d) RM66,000 50. In marketing unit trust scheme providing quality services includes a) Providing convenient choices in handling investors cash and payments b) All answers are correct c) Providing clear and precise reporting d) Been responsive to customers request, queries and complaints 51. If an investor is able to tolerate high risks and prefers long term capital gain to short term income, which of the following funds is most suitable for her ? a) Balance fund b) Income fund c) Bond fund d) Growth fund 52. Which of the following is not the right of the unit holder ? a) To redeem units b) To select shares for the unit trust scheme portfolio c) To receive pro les of board directors d) To obtain information about the unit trust scheme and its performance 53. Which of the following increase the overall risk level of your portfolio a) Shifting your investment from stocks to money market b) Shifting your investment from stocks to xed deposit c) Shifting your investment from stocks to bonds d) Shifting your investment from bonds to stocks 54. The major factor that end nanciers will assess in determining whether to extend credits to an investor who wished to nance a unit trust investment scheme is a) The credit worthless of the investors b) The credential of the investment committee members c) The current prevailing interest rate on credit cards owned by the investors d) The name of the unit trust management company in which the investor wished to make an investment fi fi fi ff fi fi fi fi  55. Investors who invested in unit trust with borrowed money a) Are guaranteed to make pro t in longer time b) Need to keep on investing until the loan is fully settled c) Will not be a ected by changes in the based lending rate set by their end nanciers d) Will only make pro ts if returns from their investment are higher than the cost of their borrowings 56. In order to overcome the adverse impact of in ation a) Investors should only invest in property trust b) None of the optional answer is correct c) Investors need to buy unit when the market prices are low d) Investors need to preserve the purchasing power of their original investment 57. What happens when a unit split 1:2 is declared ? a) The unit price decreases proportionately b) None of the answer is correct c) The units in circulation doubled d) The unit price doubled Question 58 and 59 are related : Given data : i) Number of units held before unit split 18,000 units ii) Total value of the investment before unit split RM60,000 iii) Unit split ratio : 1 for 3 58. How many units will be investor hold after the unit split exercise a) 15,000 units b) 18,000 units c) 6,000 units d) 24,000 units 59. What is her total investment value after the unit split exercise a) RM8,000 b) RM6,000 c) None answer are correct d) RM10,000 60. Unit Trust Management Scheme (UTMC) must issue a prospectus for each of its unit trust scheme. The UTMC is required to : a) Send a copy to any potential investor who request a copy b) Provide complete information c) All the answers are correct d) Issue prospectus at least once a year 61. The net asset value of an equity index tracking fund a) Will not react at all the ups and downs of the stock market b) Will uctuate in response to changes in interest rates only c) None answer is correct d) Will uctuate in response to changes in price of equity index component 62. Amongst others, the calculation of the net asset value (NAV) of a unit trust scheme involves i) The value of the equity investment ii) Cost and charges involved in various transaction of the scheme iii) The value of the money market instrument (if applicable) iv) Accrued gross distribution and interest income after deduction of relevant fees and expenses such as annual management fees and administrative expenses a) i, iii and iv b) i, ii and iii c) All answers are correct d) i and ii fl fl ff fi fi fl fi  63. Unit trust o er and e ective way to pursue lifetime nancial goals with advantages that would be di cult to achieve by lay persons invest on their own. The advantages include i) on-going professional fund management ii) Diversi cation of assets with reduces risk iii) Can be bought and sold easily iv) More favourable transaction cost for unit trust due to large investment amount v) Flexibility to switch between di erent type of funds (applicable to certain unit trust) a) i, ii, iii and v b) i, ii, iii and iv c) All answers are correct d) I, ii and iii 64. Raw return is a) A measure that shows the total return achieved by holding the investment over the entire period between buying and selling b) A form of measure which is superior to the annualised return c) The only return measure that accounts for the value of time d) The best measure for unit trust return 65. Market risk is a time of risk involves investing in equity trust and in means a) Unit holders might be forced to provide additional funds to restore their loan margin when the value of the unit trust scheme dropped drastically b) Poor management of the scheme will jeopardised the investment of unit holders through the lost of their capital invested in the scheme c) None of the answer is correct d) Stock value underlying the net asset value of the unit trust scheme uctuates in response to the activities of individual companies and general market or economic conditions. Such movement will cause the NAV or prices of units to fall as well as rise 66. Risk/Returns characteristics can vary signi cantly between two funds. Which of the following statement is not a correct comparison of the risk/returns trade o between investing in a capital growth fund (G) and a capital protection fund (P) a) P’s losses are potentially less because it takes less risk b) G needs to adopt a riskier investment strategy to achieve potentially higher returns c) Expect a lower return from P because the fund takes less risk d) G’s returns are potentially higher than P’s because G is less risky 67. What would you not normally expect to nd in the annual report of the unit trust scheme a) Fund composition and statement of assets allocation b) Auditors reports c) Unit prices of competitors products d) Statement of assets and liabilities of the unit trust scheme 68. When was the rst unit trust management company setup in Malaysia ? a) 1959 b) 1950 c) 1960 d) 1949 69. Prices of listed close-ended trust are determined in the following manner a) The UTMC computes the daily prices upon close of business day b) Prices are determined by the demand and supply in the market such as Bursa Malaysia c) The investment committee set daily prices d) The total value asset is divided by the number of units in circulation 70. Daily Net Asset Values of unit trust scheme are available through a) Visiting the U it Trust Management Companies, head o ce or its branches b) Calling the UTMC c) All the answers are correct d) Referring to the unit trust pricing table published by major newspaper fi ff fi ff ff ff fi fi ffi fi fl ffi  71. Which of the following statement is correct ? a) Real estate investment trust (REIT’s) are not allowed to be listed b) The portfolio if real estate trust (REIT’s) can be switch to equities easily as the asset are highly liquid c) Unlisted unit trust are not allowed to invest in REIT’s d) The income of REIT’s is mainly derived from the rental income and the capital appreciation of the property held by the unit trust 72. In order to enhance professionalism in marketing of unit trust a) It is important to observe as many marketing leads as possible b) It is important to provide superior service to clients and attend to their needs c) It is important to recommend to potential client the best performing unit trust regardless of the suitability of the fund d) It is irrelevant what promises are made to clients with respect to investment returns 73. Which of the following statements is not valid a) Unit holders directly purchase the securities in the investment portfolio of the unit trust b) Unit trust are professionally manage by the UTMC c) Value of a unit will uctuate in line with the changes in the net asset value of the unit trust d) Investors are entitled to received unit trust certi cate or statement for his investment 74. Generally what are the possible forms of returns on investment can an investor expect form investing in unit trust i) Dividends ii) Capital appreciation iii) Interest a) ii and iii b) i and iii c) All answers are correct d) i and ii 75. In year 1995, Cik Jamal put RM50,000 in an investment that earned him 9% p.a. Supposed the investment is able to deliver the above yearly return for the past as well as the coming years, when will his money doubled ? a) Year 2005 b) Year 2003 c) Year 2007 d) Year 2000 76. An investor wants to gain exposure to the commercial property market in Kuala Lumpur but with only a small amount of money (RM5,000) she was not able to invest at all. Which os a good investment alternative for her ? a) invest in any open ended fund c) Invest in real estate property trust b) Invest in xed income fund d) Invest in equity index fund 77. Please identify features of an open ended unit trust i) It is collective investment scheme that provide an opportunity for small investors to participate in stock market investment ii) Ownership of the fund is divided into units of entitlement iii) If the market condition is not encouraging, the unit holders will not be able to liquidate their investment as other investors are not keen to purchase a) ii and iii b) i and iii c) All answers are correct d) i and ii 78. Encik Adam has invested RM5,000 in ABC growth fund managed by ABC Unit Trust Management Berhad. Encik Adam now owns a) RM5,000 worth of direct ownership of investment portfolio held by ABC Growth Fund b) RM5,000 Wirth of shares In ABC Unit Trust Management Berhad c) All answers are correct d) RM5,000 worth of units of entitlement in ABC Growth Fund 79. If NAV of a fund is RM1.00, the initial charge is 1.5% and no exit fee is imposed. How much would an investors received if he redeems 10,000 units a) RM10,150 b) RM9,850 c) No answer is correct d) RM10,000 fi fl fi Question 80 and 81 are related : ZARINA HAMZAH i) Investment A RM64,000 RM0.00 ii) Investment B RM0.00 RM64,000 RM64,000 RM64,000 80. Supposed that investment A provide an average annual return of 8.5% and the value of Encik Hamzah investment doubled approximately 1.27 years earlier that those Cik Zarina. What is the average annual return of invesment B ? a) Approximately 10% c) No answer is correct b) Approximately 7.39% d) Approximately 9.77% 81. Supposed that the amount of the cash win by them is RM128,000 each and all else being unchanged, what is the average annual return of the investment B ? a) Approximately 20% b) Approximately 14.78% c) Approximately 19.54% d) No answer is correct 82. Hasnah invested all the money that she collected from her patent and relative during Hari Raya in fund A and fund B on 13th January 200x. The unit prices at the close of business on the day and other information related to her investment are as follows. FUND A FUND B i. Total invested RM1,000 RM1,000 ii. NAV per unit RM0.2700 RM0.8295 iii. Selling price per unit RM0.2700 RM0.8295 iv. Initial sales charge 5% 0% v. Exit fee 0% 2% vi. Pricing policy Forward Forward Calculate the total number of units received by Hasnah for her investment made in Fund A (W) and Fund B (X) respectively a) W = 3,407.41 units X = 1,145.27 units b) W = 3,527.33 units X = 1,205.55 units c) No answer is correct d) W = 3,703.70 units X = 1,265.82 units Question 83, 84 and 85 are related : An investor had invested a single amount of money in a unit trust fund at RM0.50 per unit in the rst year and subsequently purchased another RM10,000 units at RM0.52 per unit in second year. At the end of third year, he decided to redeem his investment at buying price RM0.60 per unit and the total proceeds was RM15,000 83. How many units was he entitled for the investment made in the rst year ? a) 15,000 units b) 25,000 units c) 35,000 units d) None of above is correct 84. What is the total amount of money he had invested in the rst and second year ? a) RM7,500 b) RM5,200 c) RM12,700 d) None of above is correct fi fi fi  85. Upon redemption in the 3rd year, calculate the raw return of the investment that he made in the 1st year. (Assume no distribution was paid during the period) a) 15% b) 18% c) 20% d) 100% Question 86, 87, 88 and 89 are related : The NAV cum-distribution of Fund B is RM292,500,000 and units in circulation is 195,000,000. The fund declared distribution of 15 cents per unit, and the manager is charging 5% service charge 86. What is the NAV per unit cum-distribution ? a) RM1.50 b) RM1.35 c) RM1.45 d) RM1.60 87. What us the NAV per unit ex-distribution ? a) RM1.50 b) RM1.35 c) RM1.45 d) RM1.60 88. What is the investment value of Mr Samuel before the declaration of distribution, if he is holding 60,000 units ? a) RM93,000 b) RM92,000 c) RM90,000 d) RM91,500 89. Assuming no tax, what is the investment value of Mr Samuel after the declaration of distribution, if he is holding 60,000 units and the distribution is to reinvest the NAV per unit ? a) RM93,000 b) RM92,000 c) RM90,000 d) RM91,500 Question 90 and 91 are related : 90. A family spent RM25,000 on goods and services last year and RM26,125 this year. Assumed that the pattern value of consumption and the in ation rate remain unchanged. How much money will the family need next year to maintain the same living standard as this year ? a) RM26,125 b) RM27,301 c) No answer d) RM27,250 91. Based on the above in ation rate, if an investor earns a 5% return for his investment, his marginal tax is 20%. What is his e ective return after tax and in ation ? a) - 0.5% b) 15% c) - 0.3% d) - 1.5% 92. A unit split in e ect does not add value to the unit trust investors investment holdings, but __________________ a) Make sure that the fund managers are able to earn their fees b) Is used by UTMC to lower the NAV per unit, thus and enabling new investors to invest to the fund c) Is used to enlarge the fund size in Ringgit term d) Is used to reclassify the fund to penny stocks fund fl ff fl fl ff  93. The unit trust scheme (UTS) can only invest in securities that : a) Have been authorised in the deed of the UTS b) Have small market capitalisation with great potential for capital appreciation in the long run c) Are well diversi ed in the global market d) Guarantee the highest returns with minimum risks 94. A listed trust us commonly known as a : a) Universal trust b) Closed ended trust c) Regional trust d) Open ended trust 95. Which of the following fund is best describe by this statement : “ The unit trust nd manager is managed in accordance with Syariah principles and aims to maximised capital appreciation medium to long term by investing mainly in equities listed on the Bursa Malaysia ” a) Fixed income funds b) Property funds c) Balanced funds d) Islamic funds 96. The main purpose of prospectus is : a) To highlight the projected returns of the unit trust scheme b) To outline the marketing plan of the unit trust scheme c) To provide potential and existing investors with all the necessary information d) To outline the pro le of the target investors 97. Rank the following funds according to their level of risks from highest to lowest i. Equity growth fund ii. Money market fund iii. Balance fund iv. Hedge fund a) ii, iii, i, iv b) iv, i, iii, ii c) i, iii, ii, iv d) ii, i, iii, iv 98. The best way for investors to minimise the impact of the initial service charge on the unit trust investment is to : a) Adhere to a long term buy and hold strategy, making sure that the unit purchased match their long term investment objective b) Invest as regular as possible and avoid lump sum investment c) Buy and sell units as often as they can d) Only purchase aggressive growth funds 99. An index fund is : a) An indices that ensures returns will always be above KLCI b) Actively manage by buying and selling stocks upon careful and rigorous stock analysis and selection c) Listed as one of the component securities in the Kuala Lumpur exchange composite index (KLCI) d) A fund that has composition closely resembles that of the relevant index such as KLCI 100. A unit split in e ect does not add value to the unit trust investors investment holdings, but : a) Is used to enlarge the fund size in ringgit term b) Is used by unit trust management company to lower the NAV per unit, thus enabling new investors to invest c) Make sure that the fund managers are able to earn their fee’s d) Is used to reclassify the fund to “Penny stock funds” fi fi fi ff  101. What is the most important bene ts you will get from creating a diversi ed portfolio that includes stocks, bonds and money market funds ? a) The ability to balance both risk and returns in achieving ones nancial goal b) Higher returns than the portfolio that is not diversi ed c) A guarantee that the portfolio wont su er if the stock market falls d) All the optional answer are correct 102. Generally, a unit trust that has 80% of its assets invested in growth stocks would be the most appropriate investment for the preparation of : a) An income providing savings for an 86 year old b) An individual retirement fund for a 52 year old c) A college fund for an 18 year old d) Non of the optional answer is correct 103. What type of investment would you most expect to nd in an aggressive growth fund a) Investment in capital guaranteed life insurance product b) Shares of technology companies recently listed on the stock exchange c) Investment in properties with regular income d) Cash 104. Which of the following is (are) investment alternative to unit trust a) Property b) Direct share investment c) Fixed deposit d) All the optional answers are correct 105. Halal stocks do not invest in companies involve in activities products or service related to the following : i. Conventional banking ii. Telecommunication iii. Gambling iv. Alcoholic beverages a) i, iii and iv b) iii and iv c) ii only d) i, ii, iii, and iv 106. The best way to help investors go through prospectus is to begin with : a) Pro le of the board of directors and key management sta b) Fee’s and charges c) Key data d) Members of investment committee 107. Which of the following o er the choices of what an investor can do with the distribution paid by the unit trust funds : i. Reinvest in the unit trust funds, which means the distributions buys more units ii. Take money out and spend it iii. But more shares of the unit trust management company a) Non answer are correct b) i and ii c) i, ii, and iii d) i, and iii 108. Please identify features of an open ended unit trust i. It is a collective investment scheme that provide opportunity for small investors to participate in stock market investment ii. Ownership of the fund is divided into units of entertainment iii. If the market condition isn’t encouraging the unit holders will not be able to liquidate their investment as other investors are not keen to purchase a) ii and iii b) i and iii c) i and ii d) All answers are correct fi ff fi ff fi fi ff fi fi 109. The unit trust funds that are available in the market could be designed to meet the following requirements : a) All answers are correct b) Retirement funds c) Long term savings d) Children education 110. In general which of the following type of the unit trust is likely to depreciate most when the overall stock market falls a) Property trust b) Money market trust c) Equity trust d) Fixed income trust 111. Which of the following best describe the disadvantage of nancing investment of a unit trust fund through borrowing a) in earning share market, the value if investment in unit trust fund maybe decreasing whilst the loan liability is constant or increasing. The e ect of this may result in the need to increase the collateral to nancial institution b) The value of the unit trust fund does nit uctuate with share market price but the loan nancing c) The the rising market, the value of the investment in unit trust nd and the loan borrowed rises d) None of the answers are correct 112. Fixed income funds are generally said to have lower risk to equity fund. Hence what can be expected of the returns from these funds a) None answer is correct b) Consistently higher than equity funds c) Usually lower than equity funds d) Usually higher that equity funds ff fl fi fi fi fi ANSWERS SET 4 1. B 21. B 41. B 61. D 81. D 101. A 2. A 22. A 42. C 62. C 82. B 102. D 3. A 23. A 43. C 63. C 83. A 103. B 4. A 24. A 44. A 64. A 84. C 104. D 5. D 25. D 45. A 65. D 85. C 105. A 6. A 26. D 46. B 66. D 86. A 106. C 7. C 27. D 47. B 67. C 87. B 107. B 8. D 28. B 48. C 68. D 88. C 108. C 9. C 29. B 49. C 69. B 89. C 109. A 10. A 30. B 50. B 70. C 90. B 110. C 11. B 31. D 51. D 71. D 91. A 111. A 12. B 32. C 52. B 72. B 92. B 112. C 13. B 33. C 53. D 73. A 93. A 14. A 34. A 54. A 74. D 94. D 15. D 35. D 55. D 75. B 95. D 16. A 36. B 56. D 76. C 96 C 17. B 37. D 57. B 77. D 97. B 18. A 38. A 58. D 78. D 98. A 19. A 39. C 59. B 79. D 99. D 20. D 40. B 60. C 80. A 100. B