Unit Trust Examination Mock Questions PDF

Unit Trust Examination MOCK Questions For the purpose of training only 1 Contents : pages SET A 3 SET B 15 SET C 23 SET D...

Unit Trust Examination MOCK Questions For the purpose of training only 1 Contents : pages SET A 3 SET B 15 SET C 23 SET D 30 SET E 33 SET F 39 Questions – by chapters 65 For the purpose of training only 2 MOCK QUESTIONS : SET A 1. The Federation of Unit Trust Managers was formed in a) August 1992 b) August 1993 c) September 1993 d) September1994 2. The duration for investing in equity funds is ideally a) Short term to medium term b) Short term to long term c) Medium term to long term d) Undefined 3. What is switching? a) Transfer of units from one fund to another b) Transfer of funds from one account to another c) Transfer of funds from individual to joint account d) All of the above 4. Which of the following best describes an aggressive growth fund a) It invests mainly in equities b) It is managed by an aggressive fund manager c) It invests mainly in bonds d) It always distributes income 5. Under whose name would the assets and investments of a unit trust scheme be registered? a) Trustee b) UTMC c) Investor d) Stock-broking house 6. The Prospectus has to be renewed every : a) 6 months b) 1 year c) 2 years d) 3 years 7. UTMC uses forward pricing method when computing the selling and repurchase prices. Assuming at 9:30 a.m. today, the NAV of the fund was RM 180,000,000.00 and units-in-issue was 200,000,000. At the end of the day the NAV has increased to RM 190,000,000.00 and units-in-issue unchanged. If a customer wants to redeem today, how much is the repurchase price per unit if no repurchase fee is charged and the repurchase price is at NAV/unit? a) 95 cts b) $1.05 c) $1.11 d) 90 cts For the purpose of training only 3 8. An investor has been investing using the dollar cost averaging concept. Calculate the average cost per unit with the following information given (nearest cent): Date of Purchase Price Amount invested Jan 2004 RM 0.20 1000 Feb 2004 RM 0.30 1000 March 2004 RM 0.40 1000 a) RM0.20 b) RM0.30 c) RM0.40 d) none of the above 9. A unit trust listed on the stock exchange is commonly known as a) open-ended b) universal trust c) closed ended d) regional trust 10. Like all financial investment product, it is important for the industry to be regulated in order to protect investing public. Which of the following is NOT an authority involved in a unit trust scheme? a) BNM b) Institut Bank-Bank Malaysia c) Ministry of Finance d) SC 11. An investor who invests in unit trusts with borrowed money from the bank must a) Maintain an account with the bank until the loan is settled b) Apply for 100 % loan financing c) Ensure that the returns for the unit trusts are guaranteed d) All of the above 12. Which is the most important benefit you will get with a diversified portfolio that includes stocks, bonds and money market funds? a) Higher returns than you get with a portfolio that is not diversified b) The ability to balance both risk and return in achieving your financial goals c) A guarantee that your portfolio will not suffer if the stock market falls d) All of the above 13. What is the main role of a Person Dealing in Unit Trusts (PDUT) in the marketing and distribution of unit trusts? a) To earn as much commission as possible b) To sell unit trusts without understanding the the fee structure and product features c) To understand and explain the structure and type of funds d) To meet sales target 14. A registered PDUT must observe the standards of professional conduct which includes : I Acting with due Care, Skill and Diligence II Confidentiality of Communications and Transactions III Compliance with Rules and Regulations IV. Use of Authorization Card For the purpose of training only 4  a) I only b) I & II only c) III & IV only d) I, II, III & IV 15. Customer A invests in a one-off investment of RM10,000. Customer B invests RM300 every month. The above ways of investment are called : a) Lump sum investment b) One-stop investment c) Regular savings investment d) Lump sum & regular savings investment 16. A family spent RM25,000 last year for expenses and RM26,125 this year for the same purpose. Assuming inflation rate is the same, how much would they spend next year? a) RM 26,125 b) RM 25,000 c) RM 27,300 d) None of the above 17. Calculate the MER with the information below Initial Investment RM5,000 Initial Charges 5% Management Fees RM25,000 Trustee Fees RM5000 Fund Size RM3,000,000 Auditor’s Fee RM1,000 Bank Charges RM2,000 Rate of return per annum 15% a) 0.43% b) 1.10% c) 0.93% d) 1.27% 18. The NAV cum-dividend for a unit trust fund is RM 80,000,000. Units-in-issue is 150,000,000. If the dividend declared is 7sen per unit and the fund manager is charging a 5% initial service charge, how much is the selling price ex-dividend? a) $0.48 b) $0.45 c) $0.53 d) $0.56 19. Which of the following govern the operations of unit trusts? a) Guidelines on Unit Trusts b) Trust Deed c) Securities Commission Act 1993 d) All of the above 20. Which of the following affects the effective rate of return? a) Gearing b) Taxation c) Inflation d) All of the above 21. What do you mean by the term “cooling-off” a) Minimum period in which investor has the right to buy more units For the purpose of training only 5  b) 6 days period before declaration of distribution c) 6 day period to make redemption of investment at prevailing buying price plus refund of original sales charge d) 6 day period to make redemption of investment at original buying price plus refund of original sales charge 22. Which of the following statements is not true? a) Dollar-cost averaging principle should be used over the long term in order to maximize its benefit b) The benefits of Dollar-cost averaging principle are more significant in a fluctuating market c) Investors can benefit from applying dollar-cost averaging principle in their unit trust investments d) Dollar-cost averaging is a way to obtain more units at a higher price 23. What are the characteristics of high returns funds? a) Potentially high risks b) The higher the return, the lower the risk c) Generally suitable for empty nesters d) Do not invest in equities 24. Which statements are true regarding MER? I A newly launched UTS will have no MER value II MER = Fee + Recovered Expenses x 100 Average Fund Size III Decreasing MER indicates that the UTMC is managing the fees and expenses well IV MER = Fee +Average Fund Size x 100 Recovered Expenses a) None of the above b) I, II and III c) I, III & IV d) III & IV 25. The NAV cum-dividend for a unit trust fund is RM 150,000,000.00. Units-in-issue is 100,000,000.00. If the dividend declared is 10 sen per unit and the fund manager is charging a 5% initial service charge, how much is the selling price ex-dividend? a) $1.47 b) $1.50 c) $1.40 d) $1.35 26. An investor had invested a single amount of money in a scheme with the Selling Price of RM 1.00/unit. 5 years later he decides to redeem his investment at the Buying Price of RM1.20/unit and the total proceeds amounted to RM 5760. How much had he invested 5 years earlier? a) 4,800 b) 5,600 c) 5,000 d) 5,760 27. The NAV for a unit trust fund is RM 180,000,000.00. Units-in-issue is 100,000,000. Assuming the fund manager is charging a 10% initial service charge, how much is the selling price after a unit split of 1:4? a) $1.58 b) $1.13 c) $1.44 For the purpose of training only 6  d) $1.98 28. The Selling Price of a unit trust fund is RM 12 per unit. Mr. Muthu invested into the fund with a lump sum of RM24,000. How many units is he entitled to? a) 500 b) 1000 c) 1500 d) 2000 29. En. Ibrahim invested RM 5,000 into a unit trust fund managed by ABC UTMC which is owned by ABC Berhad. En Ibrahim now a) owns RM 5,000 value worth of units entitlement b) owns RM 5,000 value worth of quoted share in ABC Berhad c) owns RM 5,000 value worth of shares in ABC Holding of companies d) owns RM 5,000 paid up capital of ABC UTMC 30. What is the maximum amount of EPF Mr. Naseem is allowed to withdraw for the purchase of unit trusts on a single withdrawal if his EPF account balance is as follows Account 1 Account 2 Account 3 RM108,000 RM68,000 RM28,000 a) $5,800 b) $11,600 c) $3,600 d) 7,200 31. An investor has 2000 units in Fund A. The NAV cum-dividend is RM 1.20 per unit. Fund A has since declared a dividend of 10 sen per unit and the NAV ex-dividend is RM 1.10 per unit. What is the total value of her investment ex-dividend (ignore initial service charge and tax) a) $2,200 b) $2,400 c) 2,600 d) none of the above 32. Ahmad has RM 400,000 in his bank account. If the current inflation rate is 4 %, how long would it take for his funds to be halved? a) 12 years b) 16 years c) 18 years d) 20 years 33. How often should the prospectus be updated? a) NO specific requirement b) Every 3 years c) Every 3 months d) Every 12 months 34. Which of the following describes the role of the Trustee? For the purpose of training only 7  a) Promotes the sale of units and provides repurchase facilities b) Issues the prospectus of the scheme c) Supervises the operation of the trust to ensure that the objectives of the scheme are followed d) Ensures the fund manager provides guaranteed returns 35. Which of the following best describes income funds? a) The funds invest primarily in stocks which earn significant dividend income b) Normally invests in corporate bonds, government securities and liquid assets c) Invest in stocks with higher growth potential d) These funds generate returns which closely resemble the performance of the stock market index both in terms of risk and return 36. Choose the correct statement about the Trust Deed a) IT shows the rights and obligations of the Manager, Trustee and unitholders b) The SC is liable to structure the Trust Deed for each scheme launched by each UTMC c) In the event the prospectus is not approved by the SC, the Trust Deed may be used as a replacement d) An appointed Trustee is responsible for the issuance of the Trust Deed 37. Which of the following documents govern the operation of a Trust fund? a) Prospectus b) Trust Deed c) Fund Manager’s report d) Trustee’s Report 38. Unitholder’s rights include the following except, a) Attend the Board of Director’s meeting b) Vote in unitholder’s meetings c) To make queries (including complaints) to UTMC d) Right to receive distributions of income 39. An investor receives 20% nominal return from his investment and his marginal tax rate is 20%. IF the annual inflation rate is 10%, what is his effective return? a) -10% b) 0% c) 6% d) 8% 40. Which of the following charges is the fee levied by the manager on the investors to cover the costs of distributing the unit trust? a) Management fee b) Initial Service charge c) Trustee fee d) Repurchase fee 41. The lowest manager’s buying price allowable under the Guidelines on Unit Trust funds equals “the _______________ minus the ______________. a) NAV/unit, initial service charge b) NAV/unit, repurchase fee c) Repurchase price, management fee d) Selling price, initial service charge For the purpose of training only 8 42. To meet the challenges posed by the new sophisticated customers, PDUT must strive to do the following except : a) Maintain high ethical standards in their marketing b) Fine tune their product knowledge c) Hard sell d) Acquire suitable professional qualifications 43. The following are ways to improve the service quality to customers except : a) Making application forms and other documents easy to read and use b) Informing the investors about processes involved in the purchase and how long these might take c) Ensuring those involved in servicing clients are well-informed and are aware of the extent of their responsibilities d) Keeping customers happy by hiding negative news from them 44. Which of the following are regulations affecting the UTMC? a) Maximum exposure to any one group of companies b) Maximum exposure in a single company c) Maximum exposure in foreign markets d) All of the above 45. In financial planning, people are assisted with the following except I Cashflow planning II Retirement planning III Contingency Planning IV Family Planning V Investment Planning VI Tax planning a) I & IV b) III & V c) IV d) IV & VI 46. Which of the following statements about financial planning is false a) Short term volatility in returns will have a greater impact on long term investors than on short term investors b) Generally, the older the investor, the lower the risk he can tolerate c) The investor’s future financial goals have to be expressed in future value (in terms of tomorrow’s Ringgit d) The most important thing in portfolio design is to put the client’s needs and wants first 47. Which of the following is not a feature of an open-ended fund? a) Units in circulation are flexible and will increase or decrease in size with every creation and cancellation of units b) The prices of the UTS are based on demand and supply c) The trust is not listed on a stock exchange d) Sales and repurchases of the units are transacted directly with the UTMC 48. Name the features of the listed fund I The prices fluctuate daily and are based on supply and demand II The number of units is restricted once the investment is floated on the stock exchange III Sale and repurchase of units are transacted with brokers IV Sale and repurchase of units are transacted directly with the fund manager a) I & III For the purpose of training only 9  b) I, II & III c) II & IV d) I & IV 49. Fixed interest investments have a high negative correlation with equities meaning : a) When the equity market is down, the return from fixed interest investments increases b) When the equity market is up, the return from fixed interest investment will supersede the return from equity market c) The risk element of fixed-income fund is higher than equities d) The returns from equities are always greater than fixed interest investments regardless of the market situation 50. Name the first state unit trust fund which was open to non-Bumiputra investors a) ASNITA b) Amanah Saham Wawasan 2020 c) Dana Johor d) Amanah Saham BSN 51. Since _______ EPF contributors have been allowed to withdraw part of their savings from Account 1 to invest in approved financial institutions a) 1996 b) 1995 c) 1994 d) 1993 52. The Prospectus of each scheme must contain the following information except : I Investment objectives II Authorised investment III Fees and charges IV Earning distribution a) I, II and IV b) IV only c) All of the above d) I and II only 53. An investor is receiving 15% nominal yield from his investment and his marginal tax rate is 10%. If the annual inflation rate is 5%, what is the difference between the nominal yield and effective yield? a) 6.5% b) 8.5% c) 12.75% d) 13.5% 54. The management fee is used to : a) cover management expenses b) cover commission paid to PDUTs c) create more rewards for investors d) expand the size of the unit trust funds 55. The basic ways in which the performance of a Unit Trust scheme should be analysed is : I Raw return II Annualised return III Returns after fees and charges IV Performance Tables V Consistency a) I & II b) III & IV c) IV only d) All of the above For the purpose of training only 10 56. According to the guidelines, the following are true except : a) The initial offer period of any new fund must not exceed 21 days b) The UTMC must provide every investor with a cooling-of right of not less than 6 business days c) The UTMC must pay the proceeds of the repurchase of units to the unitholder within 10 calendar days of receiving the repurchase request d) The UTMC needs to publish the daily selling/buying/NAV prices in either a Malay or English newspaper 57. Why do marketing of unit trusts sometimes fail? I Product awareness – potential investors are unaware of how unit trust can help to increase their net- worth II NOT for me – PDUT unable to identify needs of clients III Some UTMCs have not performed well in relation to their peers IV Some potential investors fear losing their capital in UTS just like shares, compared with safe havens such as savings a/c and fixed deposits a) I, II & III b) II & IV c) II, III and IV d) All the above 58. The following statements are true except a) Basically, liquidity means how fast the investor can sell her investment b) To redeem their units, unit trust investors only need to fill-in a redemption form and submit it to the UTMC c) There is no risk associated with unit trust investment d) Dollar-cost averaging principle helps turning fluctuating prices to investor’s advantage 59. Which of the following are the principles stated in the Code of Ethics? I Honesty II Dignity III Integrity IV Friendliness V Fair Dealing VI Good Faith a) I,II,III,V and VI b) I,II,III,IV and V c) I,III,IV, V & VI d) II,III,IV,V and VI 60. Which of the following is not true regarding methods of investing in unit trusts? a) Lump sum investment b) Regular savings c) Loan financing d) None of the above 61. The manager of the unit trust has the following responsibilities except : a) Calculation of unit prices b) Distribution of income c) Day-to-day management of the assets d) Ownership of the assets of the trust 62. When a dividend is declared, the : a) investment value of the unitholder is not affected b) investment value of the unitholder falls relative to the dividend paid c) dividend must be reinvested d) investment value of the unitholder increases relative to the dividend paid For the purpose of training only 11 63. It is important to maintain a liquidity buffer in the Unit trust scheme to cater for redemption. What is the usual form whereby liquidity is held? a) Cash and short-dated interest instruments b) Cash and short term property c) Cash and short term insurance d) Cash and listed securities 64. The following is a document transacted between the respective parties. Which document is incorrect? a) SC and UTMC = Guidelines on Unit Trust Funds b) UTMC and PDUT = Fund Application form c) FMUTM and PDUT = Statutory Declaration Form d) PDUT and Investor = Risk Disclosure Statement 65. __________ is the price at which units are sold to the public. It includes the initial service charge. a) Offer price b) Bid Price c) Redemption price d) Buying price e) NAV 66. According to the Guidelines on Unit Trust Funds, the management company must set up a/an ________ a) Unitholder Committee b) Investment Committee c) FMUTM Committee d) Agent Committee 67. It is the duty of the _____________ to prepare a prospectus before launching a fund a) Securities Commission b) FMUTM c) Trustee d) UTMC 68. All Unit Trust funds must be approved by : a) Bank Negara b) Securities Commission c) ‘Trustee d) Management Company 69. Dollar-cost averaging is the principle of investing _________ amount of money at ________ intervals irrespective of the price level. a) equal, regular b) equal, irregular c) unequal, regular d) unequal, irregular 70. If the NAV of a fund is $1.05, the buying price is $1.00, and selling price is $1.09, what is the amount that an investor would receive if he wants to redeem his 10,000 units? a) $9,800 b) $10,000 c) $10,500 d) $10,200 For the purpose of training only 12 71. Which of the following is not in the contents of a Prospectus? a) information on the UTMC b) potential risks of investing in unit trusts c) management expenses ratio d) forecast return of the fund 72. Mr. Wong has a balance of RM250,000 in his EPF account. What is the maximum amount that he can withdraw from his EPF account to invest in a unit trust fund? a) $20,000 b) $30,000 c) $40,000 d) $50,000 73. Applying the Rule of 72, what rate of return should you look for in order for you to double RM40,000 in 5 years? a) 5.2% b) 7.2% c) 14.4% d) 28.8% 74. A Unit trust fund declared a bonus issue of 1:2. IF the NAV of the fund cum bonus is RM180,000,000 and units is issue cum bonus is 100,000,000 units what will be the NAV per unit ex-bonus? a) $0.60 b) $0.90 c) $1.20 d) $1.80 75. Which of the following is not valid? a) The Management company is responsible for sending all reports and notices to the unitholders b) The Management company is not permitted to make any loans out of the investment funds to any parties c) It is the duty of the SC to set-up an Investment Committee d) The SC must approve members of the investment committee of a unit trust fund 76. A unit trust fund declared a gross dividend of 12 sen per unit. The NAV on cum- dividend is RM240,000,000 and units is issue cum dividend are 200,000,000 units. What will be the NAV per unit ex-dividend? a) $1.13 b) $1.08 c) $2.28 d) $1.44 77. Which of the following is not an advantage of investing in Unit Trusts? a) Diversification through a broad-based portfolio b) Professional Fund management c) Liquidity d) Guaranteed return 78. What is NAV per unit? a) Total value of the investment after deducting service charge b) Ratio of the investment in fixed-income securities c) NAV of the investment divided by the number of units in issue d) Total units held by the scheme multiplied with the repurchase price 79. What is the first thing a PDUT must do when approaching a client? For the purpose of training only 13  a) Go through the Prospectus b) Explain what unit trusts are c) Produce his authorization card d) Complete a Risk Analysis 80. Which is the most likely benefit you will get with a diversified portfolio that includes stocks, bonds and money market funds? a) Higher returns than you get with a portfolio that is not diversified b) The ability to balance both risk and return in achieving your financial goals c) A guarantee that your portfolio will not suffer if the stock market falls d) All of the above For the purpose of training only 14 MOCK QUESTONS – SET B 1. FMUTM stands for: A. Federation of Malaysian Unit Trust Managers B. Federal Malaysian Unit Trust Managers C. Federal of Malayan Unit Trust Managers D. Federation of Malaysian Unit Trust Management 2. The FMUTM council consists of how many elected members? A. 12 C. 15 B. 10 D. 9 3. What are open-ended Unit Trusts? A. The units are listed and traded on the stock exchange. B. The units are not listed in the stock exchange; sales and repurchase are transacted directly with the fund manager. C. Transactions are through the stockbroker. D. They are Islamic Unit Trusts. 4. Who is empowered to regulate the unit trusts industry as well as having powers of prosecution and penalty where breaches are known to happen? A. Securities Commission C. Fund Managers B. FMUTM D. Agents 5. What legal document is being used in the Unit Trusts industry A. Sales and Purchase Agreement C. Power of Attorney B. The Deed D. None of the above 6. High-risk investors may choose to invest in aggressive growth funds and others may consider investing in balance funds. What are the factors that cause the investors to consider investing in balance funds? I. Generally, the return is higher than equity unit trust II. The portfolio consists of wider range of asset classes. III. The portfolio of the fund is well balanced and thus reduces the risk IV. The returns are guaranteed. A. I & II C. III & IV B. II & III D. All the above 7. Which of the following statements is not valid? A. One of the reasons why the percentage of the unit trusts’ NAV to market capitalization in Malaysia is comparatively lower than some other countries like the US and UK is because the Malaysian government has a comprehensive retirement accumulation plan known as EPF. B. By increasing the professionalism and better marketing of the products by the fund management company, it will stimulate the growth of the unit trust industry in Malaysia. C. The concept of unit trust has been introduced in Malaysia since 1959. However the industry only witnessed its rapid growth since 1990. D. The Securities Commission was established as a body solely representing the unit trust industry. 8. Investors normally used fixed deposit rates and share market index to assess the performance of their investment. However, it can be misleading by only analyzing the statistics provided. What are the other factors that need to be considered when assessing the performance? I. Consistency II. Risk Level III. Fees & Charges A. I & II C. I, II & III B. II & III D. None of the above 9. The purpose of prospectus is … A. To provide potential and existing investors with all the necessary information to make an informed decision. B. To outline the market plan for the scheme. C. To highlight the projected returns of the scheme. D. To outline the profile of the target investors. 10. Which of the following investment instrument is historically best protection against inflation? A. Stocks C. Gold B. Bond D. Fixed Deposit For the purpose of training only 15 11. Mr. A is holding 2,000 units of Fund ABC. The NAV of the fund cum-distribution is RM1.20, and the fund declares RM0.10 distribution (assuming no taxes and charges). Upon the declaration, the Ex-D NAV is RM1.10, Ex-D buying price is RM1.10, Ex-D selling price is RM1.15. Assuming Mr. A wants his distribution to be reinvested, and the reinvestment price is the same as NAV, what is the investment value of Mr. A after the distribution? A. RM2,400 C. RM2,300 B. RM2,420 D. None of the above 12. Based on Question 11, what is the units holding of Mr. A after the distribution declaration? A. 2,200 units C. 2,181.82 units B. 2,011.23 units D. 2,400 units 13. A decreasing MER stand for which of the following … A. The performance of the fund is getting worse. B. The fund performance is getting better. C. The Management Company is managing the total fees and expenses well. D. The Fund Manager is reducing the annual management fee. Questions 14 to 17, to be answered based on the following. The published prices of Fund A were as follows: - Date NAV Buy Sell 12/08/99 0.95 0.95 1.00 13/08/99 0.94 0.94 0.99 14/08/99 0.96 0.96 1.01 14. Based on historical pricing, Mr. Lee invested RM2, 000 in Fund A on 12/08/99, how many units is he going to get? A.2,000 units C. 2,020.20 units B.2,105.26 units D. 2,127.65 units 15. Based on historical pricing, Ms. Tan redeemed 5,000 units of Fund A on 13/08/99, how much money is she going to get back? A.RM4,950 C. RM4,800 B.RM4,700 D. RM4,750 16. Based on forward pricing, Mr. Lim invested RM4, 000 in Fund A on 13/08/99, how many units is he going to get? A.3,960.40 units C. 4,000.67 units B.4,040.40 units D. 4,166.67 units 17. Based on forward pricing, Ms. Cheng redeemed 10,000 units of Fund A on 13/08/99, how much money is she going to get back? A.RM9,400 C. RM9,600 B.RM9,500 D. RM10,100 18. “The prices are determined by demand and supply.” This is one of the characteristics of: - A. Income Fund C. Open-ended Fund B. Growth Fund D. Close- ended Fund 19. Mr. Lee has totally RM100,000 in EPF A/C, how much he can withdraw to invest in unit trust fund? A.RM20,000 C. RM1,000 B.RM2,000 D. RM50,000 20. The agency structure of the unit trust must not exceed _____ tiers. A. 3 C. 5 B. 4 D. 6 21. As per requirement, the annual report of the scheme should include I. Manager’s report II. Trustee’s report III. Statement of assets and liabilities IV. Auditor’s report A. I, II C. I, II & III B. I, III D. All of the above 22. Which of the following is not the duty of the management company? For the purpose of training only 16  A. To maintain an accurate register of unitholders with information such as addresses, date of sales and purchase and nationality of unitholders, B. To keep adequate accounting records in relation to its operations and the investment operations. C. To keep trustee informed of any investments or disposals, which the management company undertakes. D. To appoint an approved company auditor for the fund. 23. What is the main investment objective of Islamic Unit Trust Funds? A. To match the investment returns of non-interest banking products and Takaful insurance. B. To provide an investment opportunity for the Muslim investors to access to conventional banking, insurance and financial services and products. C. To generate consistent income, thus allowing the unitholders to pay for their “zakat”. D. To invest in accordance to the Syariah Principles. 24. The investment of unit trust scheme in any class of security of any issuer must not exceed _____ of the security issued. A. 10% C. 20% B. 15% D. No limit 25. When was the first Malayan unit trust launched? A. 1953 C. 1960 B. 1959 D. 1969 26. The Deed is to set out the formula to calculate the fees payable to: A. Securities Commission and Bank Negara B. Trustee and Manager C. Trustee and Securities Commission D. Manager and Securities Commission 27. The Manager should not hold more than ______of the total units of the trust fund in circulation at any time. A. 10% C. 25% B. 20% D. 30% 28. The Manager: I. must be incorporated in Malaysia II. can also be the trustee of a fund III. should be a subsidiary of a financial services institution or any other institutions approved by the Securities Commission IV. should appoint an independent auditor to the fund A. I, IV C. II, III & IV B. I, III D. All the above 29. The legal document that sets out the obligations and rights of the trustee, manager and unitholders is called: A. Certificate C. Deed B. Prospectus D. Agreement 30. The Federation of Malaysia Unit Trust Managers (FMUTM) was formed on______________. A. August, 1992 C. September, 1994 B. August, 1993 D. August, 1994 31. Who owns the assets of a unit trust? A. Investor C. Fund Manager B. Trustee D. Management Company 32. What are the major characteristics of a property trust fund? I. Property trusts invest in real property II. Property trusts are listed on a stock exchange III. The most common type of unit trust in Malaysia IV. Invest into share market A. I & IV only C. I, II & II only B. I & II only D. I, II & IV only 33. Securities Commission (SC) was established in which year? A. 1996 C. 1990 B. 1993 D. 1992 For the purpose of training only 17 34. Under which act of Parliament, regulation of the unit trust is the responsibility of the Securities Commission? A. Securities Commission Act 1993 C. Companies Act 1965 B. Securities Industry Act 1983 D. Trustee Act 1949 35. Why is the unit trust industry regulated? A. To protect the interest of the unit trust Management Company. B. To protect the interest of the unit trust scheme. C. To protect the interest of the investing public D. To protect the capital market 36. Why is it necessary to provide investment guidelines? I. Investment guidelines are created to protect the interest of unit trust management company II. Investment guidelines are created to reduce the risk of loss for the investors III. Investment guidelines are created to maintain the level of prudence and professionalism in the industry A. II only C. II & III only B. I & II only D. All of the above Question 37 to 41 is to be answered based on the followings: 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. 37. What is the NAV per unit Cum-Distribution? A. RM1.50 C. RM1.45 B. RM1.35 D. RM1.60 38. What is the NAV per unit Ex-Distribution? A. RM1.50 C. RM1.45 B. RM1.35 D.RM1.60 39. What is the Ex-D selling price of Fund B, if the sales charge is 5% rounding to nearest cent? A. RM1.50 C. RM1.45 B. RM1.35 D. RM1.42 40. What is the investment value of Mr Ho before the declaration of distribution, if he is holding 60,000 units? A. RM93,000 C. RM90,000 B. RM92,000 D. RM91,500 41. Assuming no tax, what is the investment value of Mr Ho after the declaration of distribution, if he is holding 60,000 units and the distribution is to reinvest at NAV per unit? A. RM93,000 C. RM90,000 B. RM92,000 D. RM91,500 42. Which of the following is incorrect? A. PNB launched the 1st national bumiputra unit trust fund – the Amanah Saham National (ASN) in 1981 B. The second national bumiputra unit trust fund – the Amanah Saham Bumiputra (ASB) was launched in 1990 C. In the year of 1993, the Securities Commission Act was passed D. The 1st unit trust company in Malaysia was formed in 1963 43. Which of the following is correct? A. Initial Service Charge = Selling Price – NAV B. Redemption Charge = Selling Price – NAV C. Management Fee = Selling Price – NAV D. Trustee Fee = Selling Price – NAV 44. Unit trusts in Malaysia are allowed to invest in the following, except: A. Fixed income instrument C. Commodity B. Stock D. None of the above 45. Regulation of the unit trust industry has been entrusted to ____ A. FMUTM C. Securities Commission B. Bank Negara D. Trustee 46. Which of the following are expenses of a unit trust scheme? For the purpose of training only 18  I. Management fees III. Trustee Fee II. Auditor fees IV. Cost of sending reports A. I & III C. II B. I D. I, II, III & IV 47. _______ is not a return, but it created more units for investors. A. Profit C. Distribution B. Bonus issue D. Net income 48. _______ is a return declared to unitholders in the forms of cash. A. Profit C. Distribution B. Bonus issue D. Net income 49. According to guidelines on unit trust fund, if the financial year for a fund ended at 30 June, the annual report has to be sent out by _________. A. 15 July C. 31 August B. 31 July D. 30 June 50. Generally, the volatility or risk element of _______ is lower than that of equity funds like growth fund. A. Property trust C. Open-ended fund B. Close-ended fund D. Income fund 51. According to guidelines to the financing of unit trusts issued by SC on 30 Nov 1995, the maximum margin of finance for purchases of unit trusts is ______ A. 50% C. 67% B. 33% D. 90% 52. MER measures the _______ of the Management Company A. Profitability C. Management Fee B. Efficiency D. Income 53. According to the Guidelines on unit trust funds, a unit trust fund may invest in ____ up to 10% of its net asset value. I. Unlisted securities of a Malaysian issuer II. Share capital of any single issuer III. Collective investment scheme IV. Financial futures (for hedging purpose only) A. II, C. I, II & III B. II, III D. All of the above 54. Which of the following statement is valid? A. The daily selling and repurchase prices for units are to be determined by the management company B. The management companies are not allowed to impose more than 10% of service charge C. The initial offer period of a unit trust fund must not exceed 30 days D. The proceeds of redemption must be paid to the unitholder within 14 days according to the Guidelines on Unit Trust Funds 55. “Investment benchmarking” is A. Fund management objective that selects securities based on a specified Stock Exchange Composite Index B. Standard measures when assessing investment performance C. Shifting investment portfolio from stocks to fixed-income securities D. A strategy that entails buying low and selling high 56. According to the Guidelines on unit trust funds, the investment in foreign securities is subject to _____ of its net asset value. A. 10% C. 20% B. 15% D. None of the above 57. Mr Ganesh has RM500,000 and wants to know how long it would take to double his money at the earning rate of 7.5% p.a. A. 1.2 years C. 4.8 years B. 2.4 years D. 9.6 years 58. What is the rate of return Mr. Ganesh should look for in order for his investment of RM500,000 to double in 5 years? A. 5.2% p.a. C. 14.4% p.a B. 7.2% p.a. D. 28.8% p.a. For the purpose of training only 19 59. According to the Guidelines on Unit Trust Funds, I. Investment of any unit trust scheme in foreign Securities must first receive the approval of Bank Negara Malaysia and the Securities. II. Investment of the scheme in Unlisted Securities must not exceed 10% of the scheme’s NAV. III. Investment of the scheme in other collective investment schemes must not exceed 10% of the scheme’s NAV. IV. Investment of the scheme in futures contracts must not exceed 10% of the scheme’s NAV. A. I & II C. I, II & III B. II & IV D. All of the above 60. Which of the following statement is valid in regards to the declaration of unit splits of a unit trust fund? A. The NAV of the unit trust fund will be increased B. The NAV of the unit trust fund will be decreased C. The number of units in circulation will be increased D. The number of units in circulation will be decreased 61. A distribution of RM0.05 per unit has been distributed for Fund ABC. NAV cum distribution was RM1.20. Total number of units in circulation before income distribution was 1,000,000 units. The fund charges a 5% initial service fee and a 3% repurchase fee. What is the ex-distribution manager’s repurchase price?? A. RM1.10 C. RM1.19 B. RM1.21 D. RM1.12 62. If an investor secures the maximum margin of loan financing (as specified in the guideline on unit trust funds) for the investment in unit trust and the amount of investment on his own is RM40,000, what will be his total investment (round up to the nearest Ringgit value)? A. RM19,701 C. RM81,212 B. RM59,701 D. RM121,212 63. Which of the following document need to be signed by investors who wish to apply for the loan financing to purchase unit trusts? A. Absolute Assignment C. Letter of Administration B. Risk Disclosure Statement D. Letter of Undertaking 64. Under what circumstances, a Financier may exercise “call margin”? A. When the value of the investment depreciates and the value of the liability of the investor increases B. When the returns of the investment exceed the loan amount C. When the investor liquidates the investment D. When the investor tops up additional investment amount into the same account 65. Which of the following are expenses of a unit trust scheme? I. Management fees & Trustee fees II. Auditor fees III. Cost of sending out reports to unitholders IV. Cost of issuing distribution warrant A. I, II, III C. I, III & IV B. I, II, IV D. All of the above 66. The main duty of the trustee is to protect the interest of the unitholder. If the trustee was to discover that the operation of the fund does not comply with the terms and conditions stipulated in the deed, the trustee must then report to A. Securities Commission (SC) B. Ministry of Domestic Trade & Consumer Affair C. Bank Negara Malaysia D. Ministry of Finance 67. A unit trust scheme must appoint an investment committee in which the role of the investment committee of the scheme is: A. To formulate, implement and monitor the investment management policies of the scheme B. To pool resources together in order to meet the request for redemption C. To formulate the rules and regulations of the unit trust industry D. To advise the Syariah Committee on how to invest in stock market 68. One of the unit trust fund features is A. When the interest rates increase, the return from unit trust fund will also increase For the purpose of training only 20  B. The unitholders do not have to look for buyers when they want to liquidate their investment as the fund manager must repurchase from its unitholders C. Lump sum investment is generally less risky than dollar-cost averaging investment method D. An index fund serves as a benchmark for all the unit trust funds 69. For the period of 1 January 1999 to 30 December 1999, the expenses incurred by the fund were: Management fee : RM50,000 Trustee : RM10,000 Auditor fee : RM3,000 Bank charges & others : RM8,000 The average fund size is RM5,000,000. Please calculate the Management Expense Ratio (MER) A. 1.42% C. 1.3% B. 1.5% D. 2% 70. When comparing the performance of the fund over a period of time, a decreasing MER will indicate that … 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 UTMC did not meet it’s investment strategy D. There’s no effect to the fund 71. These are the responsibilities of unit trust managers, except:- A. Manage the assets B. Calculate NAV C. Distribute income. D. Own all the assets 72. Which of the following is/are the benefit(s) of unit trust? A. Ready access to funds C. Professional Management B. Spread of risk D. All of the above 73. All assets of the unit trust scheme are held in the name of __________ for safekeeping. A. Trustee C. Investment Committee B. Unitholder D. Unit Trust Management Company 74. Formed in 1993, ___________ provide a common platform for unit trust management companies to discuss issues relating to the unit trust industry. A. FMUTM C. ROC B. SC D. UTMC 75. Under the Guidelines of Unit Trust Funds require each Unit Trust Scheme (UTS) to have prospectus. This document must be updated or revised every: A. 6 months C. 12 months B. 8 months D. 24 months 76. NAV of PCK Fund before distribution declared was RM0.85. The distribution pay out 5 sen and unit split of 2:25. What is the NAV per unit after distribution and unit split? (Round to near 3 decimal points) A. RM0.737 C. RM0.787 B. RM0.741 D. RM0.751 77. Name the first bumiputera unit trust fund by PNB: A. Amanah Saham Nasional C. Amanah Saham Wawasan 2020 B. Amanah Saham Bumiputera D. Amanah Saham Malaysia 78. Fund X strives to achieve income or a combination of both income and growth. It invests primarily in stocks that earn significant income distribution. Which category of this fund belongs to? A. Index fund C. Income Fund B. Bond fund D. Growth fund 79. The role of a Fund Manager includes the following, except: A. Prepare all notices and reports to be issued to unitholders B. Arranges for audit of the trust’s accounts C. Acts as the custodian of the fund D. Promotes the unit trust scheme For the purpose of training only 21 80. The trustee: I. is an independent company approved by the ministry II. ensure that all the terms of the Deed are followed III. appoint the independent auditor for the fund IV. is the custodian for the fund A. I, II, III C. All of the above B. I, II, IV D. None of the above For the purpose of training only 22 MOCK QUESTIONS – SET C 1. What is the purpose of the prospectus? A. To provide potential and existing investors with all the necessary information to make an informed decision. B. To outline the market plan for the scheme. C. To highlight the projected returns of the scheme. D. To outline the profile of the target investors. 2. On Tuesday, 2 December 2003, the published selling price per unit is RM0.84. The NAV per unit is RM0.80. The selling price per unit at the end of the business day is RM0.88. An investor would like to invest RM15, 000 on the same day. How many units will he get based on forward pricing? A. 17,045.45 units C. 16,666.67 units B. 13,500.00 units D. 16,304.35 units 3. Investors are allowed to withdraw from one of their EPF account for investment in unit trust. The account that they could withdraw from is: A. Account 1 C. Account 3 B. Account 2 D. Account 4 4. There is a fee levied by the manager to the unit trust investors in order to cover the cost of distribution of unit trust. This fee is … A. Management fee C. Trustee fee B. Initial service charge D. Repurchase fee 5. Which category of investment must sign a Risk Disclosure Statement? A. Investment purchased with huge amount of cash. B. Investment purchased repeatedly via Regular Saving Plan. C. Investment purchased via Loan Financing D. EPF investment scheme 6. Which of the following information can be found in the prospectus of a unit trust scheme? I. Investment objectives. III. Fees & charges II. Authorized investments. IV. Trust expenses A. I, II & III C. I, III & IV B. I & III D. All of the above 7. Which of the following factors should be taken into consideration before investing in unit trusts? A. Fees & charges incurred C. Risk of investing B. Investment objective D. All of the above 8. Assuming an investor is practicing the principle of Dollar Cost Averaging Principle. Given the following data, calculate the average cost per unit for the investor (round up to the nearest 1 cent). Date Selling price Investment amount Mar 2002 RM0.80 RM1000.00 April 2002 RM0.91 RM1000.00 May 2002 RM0.83 RM1000.00 A. RM 0.80 C. RM0.84 B. RM 0.92 D. RM0.96 9. Choose the correct statement. I. The primary objective of a growth fund is growth of capital. II. Income Fund seeks the lowest possible current income. III. Islamic Fund is a unit trust, which invests in accordance with Syariah Principles. IV. The main objective of balanced fund is to build capital & provide some income from a balanced mix of investment. A. I, II & III C. I, III & IV B. II, III & IV D. All of the above 10. An investor had invested a single amount of money in a scheme with the selling price RM0.75 per unit. Three years late, he decided to redeem his investment at buying price of RM1.00 per unit and the total proceed is RM5, 760.00. How much he invested three years ago? A. RM 2,880.00 C. RM5,760.00 B. RM 1,920.00 D. RM4,320.00 11. If a fund performance is doing good this year, A. Performance is better next year. For the purpose of training only 23  B. Performance is worse next year. C. Performance is difficult to predict next year. D. Performance is the same next year. 12. Based on the Guidelines of Unit Trust, how many days should set aside as cooling-off period? A. Must not more than 6 business days. B. Must not less than 6 business days. C. Must be equal to 6 business days. D. Must not equal to 6 business days. 13. Which of the following governed the operation of the Unit Trust Scheme? A. Guidelines of Unit Trust Scheme C. Deed B. Securities Commission D. All of the above 14. Investor A has a total investment of RM25,000 in a Unit Trust Scheme. Assuming he has borrowed up to maximum margin of financing for his investment, how much he has borrowed? A. RM16,750 C. RM69,909 B. RM44,776 D. RM14,776 15. Mr. Simon holds 5,000 units of Fund XYZ before unit split of 1:2 with an investment value of RM10, 000.00. After the unit split issue, his Fund XYZ account will has A. 2,500 units at investment value of RM10,000.00 B. 5,000 units at investment value of RM15,000.00 C. 7,500 units at investment value of RM15,000.00 D. 7,500 units at investment value of RM10,000.00 16. Which type of unit trust fund is most commonly found in Malaysia? A. Property C. Equity B. Islamic D. Fixed Income 17. The initial service charge is also known as… A. Up-front charge C. Management fee B. Forward fee D. Annual charge 18. With the rate of return 4%, how long does it take from RM100, 000 to become RM200, 000? A. 18 years C. 19 years B. 18.5 years D. 17.5 years 19. The manager of a unit trust scheme has the following responsibilities, except A. Own all the assets of the trust. B. Day-to-day management of the assets. C. Distribution of units. D. Calculation of unit prices. 20. If given tax rate of 15% and inflation rate of 4%, what is the effective rate of return after tax and inflation? Assume that the return rate is 10%. A. 3.5% C. 4.5% B. 8.5% D. 6.5% 21. A prospectus is … A. A document to provide all necessary information, which should be read by all prospective investors. B. Prepared by the Investigating Accountant. C. A legal document that outlines the rights and obligations of all parties involved in a unit trust fund. D. A marketing document that outlines the marketing plan of a unit trust fund. 22. “Investment benchmark” is… A. Fund management objective that selects securities based on a specified Stock Exchange Composite Index. B. A standard measurement for comparing investment performance. C. Shifting investment portfolio from stocks to fixed-income securities. D. A strategy that entails buying low and selling high. 23. For the repurchase of the unit trust investment, proceeds shall be paid within… A. 10 calendar days C. 6 business days B. 10 business days D. Not more than 6 business days 24. The actual management fee charged or ranged of fees charged has to be disclosed in the … of the respective Unit Trust Scheme. A. Deed C. Marketing material For the purpose of training only 24  B. Prospectus D. All of the above 25. What is the risk of an investor who directly investing in a small number of shares? A. The investor is exposed to the risk of either making or losing large portion of his investments. B. The investors’ benefit from diversification of portfolio. C. The investor is able to consistently reap high returns from the investment. D. It is easy for investor to select good company. 26. What is the main role of PDUT in marketing and distribution of unit trust funds? A. To receive commissions. B. To sell unit trusts without complete understanding of unit trusts investments C. To advise on structure and types of unit trust funds. D. To meet sales target. 27. The following guidelines are to be complied by management companies in respect of agency structure and size EXCEPT A. A Group Agency manager is not allowed to set up an agency office. B. An agent is not allowed to conduct recruitment. C. The number of tiers in an agency structure must not exceed 4 tiers. D. The size of a Unit must not exceed 50 persons at all times. 28. Lump sum investment : RM100, 000.00 Initial service charge : 5% On-going management fee : 1.5% Rate of return : 10% What is the value of the investment after 3 years? A. RM88, 469.10 C. RM89, 469.10 B. RM100, 687.40 D. RM121,342.47 29. In 1980, RM0.10 could buy 4 sweets. But, now (2000), RM0.10 can only buy 2 sweets. What is the inflation rate for these 20 years? A. 4.5 % C. 18 % B. 3.6 % D. 7.2 % 30. Generally, the forms of return from a unit trust fund are … I. Distribution III. Unit split II. Capital appreciation IV. Interest A. I & II C. I, II & IV B. I, II & III D. All of the above 31. Which of the following body maintain the registration of unitholders? A. SC C. UTMC B. FMUTM D. Trustee 32. Which of the following is the investment belongs to “Aggressive Growth Fund”? A. Money Market C. Shares of technology listed in KLSE B. Fixed Income Securities D. Capital guaranteed life insurance 33. What are the responsibilities of UTMC? I. Process application forms for unitholders II. Custodian of assets III. Unitholders registration IV. Regulate unit trust industry A. I & II C. II & IV B. I & III D. I & IV 34. Which of the following responsible to appoint auditor for a unit trust scheme? A. Trustee C. FMUTM B. UTMC D. Accountant 35. Last year expenses for Chan’s family were RM20, 000.00. This year expenses were RM21, 400.00. Assuming the inflation rate unchanged for next year, what is the amount of expenses estimated for next year? A. RM22, 898 C. RM24, 255 B. RM23, 800 D. RM25, 255 For the purpose of training only 25 36. Which of the following is the best feature to highlight to the unitholders when going through the prospectus? A. Key data C. Investment objectives B. Fund performance D. All of the above 37. NAV of ABC fund before distribution declared was 103 sen. The distribution pay out is 6 sen and unit split is 5 units for every 100 units. What is the NAV per unit for Ex-distribution and post-unit split? (Round up to the nearest 1 sen ) A. 92 sen C. 99 sen B. 100 sen D. 117 sen 38. Amanah Saham Mara Bhd launched ________________ in _________ A. Mara Bumiputra Fund, 1974 C. Amanah Saham Mara, 1971 B. First Mara Bumiputra Fund, 1967 D. First Bumiputra Fund, 1965 39. Which of the following is not the committee in FMUTM? A. Education & Conference C. Investor Education B. Tax & Accounting D. Ethics & Compliance 40. Below are the advantages of investing in unit trust, except A. Professional management C. Liquidity B. Diversification D. No control of buying & selling of share market. 41. Dollar Cost Averaging Principle means A. Regular investment with fixed amount of money. B. Regular investment with fixed amount of units. C. Regular investment with lowest amount of money. D. Regular investment with lowest amount of units. 42. Below are closed-ended fund features, except A. Property trust fund is not a closed-ended fund. B. Prices fluctuate throughout the day from time to time. C. Investors can only trade their units through exchange. D. Listed fund is a closed-ended fund. 43. When was FMUTM set up? A. 7 August 1993 C. 7 August 1995 B. 30 November 1995 D. 30 November 1993 44. Which of the following affect the effective rate of return? I. Gearing / Leveraging II. Taxation III. Inflation A. I & II C. I & III B. II & III D. All of the above 45. The contents of prospectus include I. Expiry date II. Investment objective III. Investment strategy IV. Transaction information V. Rules of unit trust industry VI. Authorized investment VII. Auditor’s report A. I, II, III, IV, V C. II, III, V, VI, VII B. I, II, III, VI, VII D. I, II, III, IV, VI 46. Management fee : RM32, 000 Trustee fee : RM 7,000 Auditor’s fee : RM 1,200 Bank Charges & others :? How much are the bank charges & others, if given MER = 1.38% and average fund size = RM3, 111,500? A. RM2,800.00 C. RM3,738.70 B. RM2,738.70 D. RM3,800.00 For the purpose of training only 26 47. Name the first totally Malaysian unit trust fund. A. First Malayan Fund C. First Malaysia Fund B. Malaysian Investment Fund D. Malayan Investment Fund For question 48, 49 & 50. On 25 April 2000,the status of Fund XYZ at the closed of business day is as below: NAV : RM90, 000,000 Units in circulation : 70, 000,000 units Initial service charge : 5% Pricing Method : Forward 48. What is the selling price for Fund XYZ that will be published in the following day? A RM 1.35 C. RM 1.45 B.RM 1.29 D. RM 1.39 49. If Miss A is preparing to invest RM35, 000 on 25 April 2000, how many units does she entitle to receive? A. 26, 925.93 units C. 26, 119.40 units B. 25, 925.93 units D. 25, 119.40 units 50. If Mr. B is selling 5,000 units on 25 April 2000, how much will he gets? Assume that no repurchase fee is charge. A. RM 6, 328.50 C. RM 6, 750.00 B. RM 6, 450.00 D. RM 6, 800.00 51. For unlisted unit trusts, the sales and repurchases of units are transacted with: A. The stockbroker. C. The trustee B. The unit trusts fund manager. D. The remisier 52. The following are the characteristics of Islamic Fund, except: A. Islamic unit trusts need to invest in accordance with the Syariah Principle. B. Investors have to obtain the approval from the Syariah Advisors before they are allowed to invest in an Islamic Unit Trust. C. Returns of the Islamic Unit Trust will avoid “riba”. D. The stocks of Islamic Unit Trusts will exclude companies involved in activities, products or services related to conventional banking, insurance, financial services, gambling, alcoholic beverage and non-halal food products. 53. Name the first state unit trust fund, which was open to non-Bumiputra investors. A. Amanah Saham Pahang B. Amanah Saham Wawasan 2020 C. Dana Johor D. Amanah Saham BSN 54. Please choose the correct statement about the Deed for unit trust funds. A. It shows the rights and obligations of the Manager, the rights and duties of the Trustee and the rights of the Unitholders. B. The SC is liable to structure the Deed for each scheme launched by each UTMC. C. In the event that the SC does not approve the prospectus, the Deed may be used as a replacement. D. An appointed Trustee is responsible for the issuance of the Deed. 55. To meet the challenges posed by the new sophisticated customers, PDUT must strive to do the following, except A. Maintain high ethical standards in their marketing. B. Fine-tune their product knowledge. C. Hard sell D. Acquire suitable professional qualification. 56. The statement below is about managing customers’ expectation. Which of them is not correct? A. To manage customer’s expectation, the sales process has to include comments and a full explanation of the various risks associated with investment in unit trusts. B. We should raise our clients’ expectation about unit trust investment because it is essentially an investment channel that promises high, extraordinary return. C. In managing our clients’ expectations, we will need to let them know what exactly they are buying. We will have to make them aware of both the benefits and risks in investing unit trusts. D. If the customers’ expectations are met, they will most probably be satisfied. 57. According to the Guidelines on Unit Trusts, all of the below are true except For the purpose of training only 27  A. The UTMC needs to publish only the daily selling price and repurchase price in daily major newspapers. B. The UTMC must pay the proceeds of the repurchase of units to the unitholders at most within 10 days of receiving the repurchase request. C. The UTMC must provide every investor with a cooling off right of not less than 6 Business days. D. The initial offer period of any new fund must not exceed 21 days. 58. The size of a unit of an agency must not exceed ____ persons at all time. A unit comprises of a “Supervisor”(defined as the upper three tiers) and his/her downlines. If Supervisor C already has 15 downlines in his/her unit, he/she can recruit another _____ downlines. A. 50…34 C. 49…34 B. 50…35 D. No restriction. 59. Which of the following statements describes the roles of the Trustee? A. Promotes the sale of units and provide repurchase facilities. B. Issues the prospectus of the scheme. C. Supervises the operation of the trust and to ensure that the objectives of the scheme are followed. D. Ensures the fund manager provides guaranteed returns. 60. Which of the following is not suitable to be used as a benchmarking tool for unit trust investment? A. KLIBOR C. Unemployment rate. B. KLSE-CI D. KLSE Emas Index 61. Which of the following statements is not valid? A. Generally, the portfolio of unit trust investment is determined by the fund manager. B. A unit trust is an investment mechanism, which allows investors who share similar financial objectives to pool their money. C. The portfolio of investment is allowed to include only one asset class. D. Unitholders do not directly purchase the securities. The ownership of the fund is divided into units. 62. The purpose of Financial Planning include A. Ensure adequate income when one needs it. B. Provide roadmap of financial objective. C. Improve present & future lifestyle. D. All of the above. 1. Deed and Prospectus must be approved by A. SC C. UTMC B. FMUTM D. All of the above 2. The Principles of Code of Ethics include I. Honesty, Dignity & Integrity II. Fair Dealing III. Good Faith IV. Charming A. I, II, III C. II, III, IV B. I, II, IV D. All of the above 3. When someone who thinks that market price will fall is call as ____ market. A. Bull C. Cow B. Bear D. Deer 4. In general, which of the following is highly illiquid? A. Unit trusts C. Share B. Fixed deposit D. Property 5. All assets of a unit trust scheme as held under the name of _______ for safekeeping. A. Investment Committees C. Fund Manager B. Trustee D. Unitholders 6. The risk of financing in investment of unit trusts is/are A. Interest rate fluctuate C. Guaranteed return B. Default of payment D. A & B only 7. The unit trust prospectus is prepared by A. Unit Trust Management Company C. Auditor B. Trustee D. Securities Commission For the purpose of training only 28  8. Which of the following is not the responsibility of the unit trust manager? A. Provides repurchase facilities B. Recommends the purchase and sale of assets. C. Supervises the operations. D. Services the unitholders. 9. A unit trust fund declared a gross distribution of 10 sen per unit. The NAV cum distribution is RM250, 000,000 and units in circulation = 200,000,000. What is the NAV per unit for ex-distribution? A. RM1.15 C. RM1.50 B. RM1.13 D. RM1.30 10. An investor would like to invest in a fund which closely resembles the performance of stock market. Which fund would you recommend to the investor? A. Growth fund C. Index fund B. Income fund D. Bond fund 11. What is the meaning of forward pricing? A. Transaction done based on the price, which will be determined at the end of the day. B. Transaction done based on the price, which was determined yesterday. C. Transaction done based on the price, which was determined at the opening of the stock market. D. Transaction done based on the price, which will be determined at the beginning of the week. 12. Investor M has borrowed up to maximum margin of financing to invest in Fund ABC. Now, his total investment amount equal to RM250, 000.00. So, how much he has forked from his own pocket to invest in it. A. RM 150, 000 C. RM82, 500 B. RM 87, 500 D. RM167, 500 13. The primary objectives of FMUTM may be summarized as follows, except A. To set up as many unit trust companies as possible, so that investing public will have more options for selection. B. To provide information, assistance and other services to its members. C. To improve the regulatory, fiscal and legal environment for unit trusts. D. To promote public awareness of the benefits and the risks of investing in unit trust. 14. The following is (are) the common benchmarks for returns from unit trust investment. A. Fixed deposit interest rate. B. KLSE-CI C. EPF dividend rate D. All of the above. 15. “Fixed-Income Unit Trusts” mainly invest in I. Corporate Bonds II. Highly growth stocks III. Government Securities IV. Liquid Securities A. I, II, III C. II, III, IV B. I, II, IV D. I, III, IV 16. Below are the minimum standards for registration of PDUT, except A. Must be at least 18 years old. B. Must possess at least Grade 3 Sijil Pelajaran Malaysia (SPM) or its equivalent as determined by the FMUTM. C. Must not be found by the court or other competent authority to have acted fraudulently or dishonestly. D. Must not be convicted of any criminal offence. 17. For loan financing, the distribution declaration will be … A. Given to Financial Institution C. Given to Management company B. Given to Investor / Borrower D. Reinvest 18. What is the purpose of unit-split? A. To distribute income to the investors. B. To create more units in order to lower the unit price so as to make the units more affordable to new entrants. C. To fulfill the requirement specified by the FMUTM D. To fulfill the requirement specified by the Securities Commission. For the purpose of training only 29 MOCK QUESTIONS D 1. What does MER of 1.60% per annum mean? A) It means the fund carries an expense of RM16.00 for every RM1,000.00 of the average NAV of the fund during that financial year. B) It means the fund carries an expense of RM0.016 for every RM1,000.00 of the average NAV of the fund during that financial year. C) It means the fund carries an expense of RM1.60 for every RM1,000.00 of the average NAV of the fund during that financial year. D) None of the above. 2. An investor would like to invest RM35,000 in AB Equity Fund. If he is taking the maximum margin of loan financing as specified in the Guidelines on Unit Trust Funds, what will be the minimum amount that he has to prepare on his own to invest in AB Equity Fund? A) RM11,550 C) RM13,600 B) RM19,000 D) RM23,333 For question 3 to 6, please to the table below:- The following are XYZ Fund prices at the closed of the respective business day. Date NAV per unit Buying Price Selling Price (RM) (RM) (RM) 1 Dec 2003 (Mon) 0.9921 0.9921 1.0417 2 Dec 2003 (Tues) 0.9903 0.9903 1.0398 3 Dec 2003 (Wed) 0.9925 0.9925 1.0421 Assuming the company is adopting Forward Pricing policy and observes the minimum cooling-off period as stipulated in the Guidelines of Unit Trust Scheme. 3 On 2 Dec 2003, Cik Rohana invested RM15,000 of her spare cash into the fund. How many units will she gets? A) 12,325.55 units C) 13,896.35 units B) 14,425.85 units D) 15,118.65 units 4. Due to emergency, Cik Rohana needs to redeem all her investment in XYZ Fund. When is her last day to exercise her cooling-off right? A) 8 Dec 2003 (Mon) C) 9 Dec 2003 (Tues) B) 10 Dec 2003 (Wed) D) 11 Dec 2003 (Thurs) 5. Mr. Ramasamy, an existing unitholder redeemed his 23,450.60 units of XYZ Fund on 3 Dec 2003. How much proceeds he will receive? A) RM23,274.72 C) RM24,400.00 B) RM31,101.20 D) RM30,110.00 6. If Mr. Ramasamy bought the above stated units at RM0.8825 exactly a year ago, what is his raw return of his investment for the entire period? A) 10.12% C) 12.46% B) 13.80% D) 14.11% 7. What is the rate of return an investor should look for in order for his/her investment of RM500,000 to become RM1 Million in 10 years? A) 5.2% p.a C) 7.2% p.a. B) 14.4% p.a. D) 28.8% p.a. 8. Miss Lee bought 1,000 units of AA Fund offered by company XYZ. In fact, what has Miss. Lee bought? A) 1,000 units of shares of Company XYZ. B) 1,000 units of shares of a subsidiary company of Company XYZ, which carries the name of “AA Fund”. C) 1,000 units of AA Fund, which is managed by Company XYZ and invested in a diversified portfolio as spelled out in the Deed. D) 1,000 units of AA Fund, which is managed by Company XYZ. In other words, the fund is invested in Company XYZ and its subsidiary companies, as laid out in the Deed. 9. Please compute the MER for XYZ Fund, given… Management fee RM15,000 Trustee fee RM720 Cost of printing annual report RM510 For the purpose of training only 30  Cost of printing interim report RM510 Auditor fee RM200 Cost of appointing Syariah Committee RM8,000 Other expenses incurred by the fund RM5,000 Average fund size of Fund XYZ RM1,320,000 A) 1.66% C) 2.00 % B) 1.88% D) 2.27 % 10. If given tax rate of 18% and inflation rate of 3%, what is the effective rate of return after tax and inflation? Assume that the return rate is 10%. A) 3.5% C) 5.2% B) 4.5% D) 6.2% 11. Mr. Chan invested in Fund P and he is investing regularly with the Dollar Cost Averaging Principle. Given the following information, calculate the average cost per unit for Mr. Chan. (Round up to nearest 4 decimal points) Date Selling Price Investment Amount 30 Sept 2003 RM0.6061 RM1,000 31 Oct 2003 RM0.6285 RM1,000 28 Nov 2003 RM0.6233 RM1,000 31 Dec 2003 RM0.6098 RM1,000 A) RM0.6168 C) RM0.6170 B) RM0.6169 D) RM0.6171 12. Encik Ramli holds 5,000 units of AB Fund before unit split of 1:5 with an investment value of RM18,000. After the unit split issue, his investment account of Fund AB will consists of A) 4,000 units at investment value of RM15,000 B) 5,000 units at investment value of RM21,600 C) 6,000 units at investment value of RM18,000 D) 7,000 units at investment value of RM21,600 For question 13 to 16, please refer to the following:- NAV cum-distribution of PQ Fund is RM120,000,000 and units in circulation is 150,000,000 units. The fund declared distribution of RM0.08 per unit, Initial Service Charge is 6%. 13. What is the cum-distribution NAV per unit of Fund PQ? A) RM.8000 C) RM0.7000 B) RM0.7200 D) RM0.8200 14. What is the ex-distribution NAV per unit of Fund PQ? A) RM0.8000 C) RM0.7000 B) RM0.7200 D) RM0.8200 15. What is the ex-distribution selling price? A) RM0.7000 C) RM0.8552 B) RM0.8480 D) RM0.7632 16. An investor invested RM10,000 in PQ Fund after the declaration of distribution. How many units the investor will get? A) 13,102.73 units C) 11,792.45 units B) 14,285.71 units D) 11,693.17 units 17. An investor had invested lump sum in a scheme with the selling price RM0.5000 per unit. Three years later, he decided to redeem his investment at buying price of RM0.8500 per unit and the total proceed is RM2,550. How much did he invest three years ago? A) RM 2,880.00 C) RM1,500.00 B) RM1,920.00 D) RM1,200.00 18. Lump sum investment : RM80, 000.00 Initial service charge : 6% On-going management fee : 1.8% Rate of return : 10% What is the value of the investment after 10 years? A) RM88, 469.10 C) RM89, 469.10 B) RM100, 687.40 D) RM165,382.84 For the purpose of training only 31 19. ABC Fund had declared a unit split of 1:4. The pre-unit split of NAV per unit was RM1.2000. Total units in circulation before the split were 100,000,000 units. The fund charges a service fee of 5% per unit and repurchase fee of 1% per unit. What is the manager’s post-unit split selling price? A) RM1.008 C) RM0.9600 B) RM0.9984 D) RM1.2600 20. Net Asset Value of ACX Fund before distribution declared was 90 sen. The distribution pay out is 7 sen and unit split is 4 units for every 100 units. What is the NAV per unit after the distribution and unit split? (Round up to the nearest 1 sen) A) 98 sen C) 99 sen B) 79 sen D) 80 sen For the purpose of training only 32 MOCK QUESTIONS SET E 1. On 8th December 2003 (Monday), the published selling price of Fund XYZ is RM0.848 and buying price is RM0.800. On the same day, the selling price at the closed of the business day is RM0.869 and buying price is RM0.82. Given the above information, if an investor would like to invest RM20,000 on that day, how many units will he/she gets? A) 23,014.96 units C) 21,657.93 units B) 22,253.87 units D) 20,645.36 units 2. In 1980, Tic Tac candy cost about RM0.70. But in year 2000, a box of Tic Tac already increased to RM1.40. What is the inflation rate for these 20 years? A) 4.5 % C) 18 % B) 3.6 % D) 7.2 % 3. Last year, the Wong’s family spent about RM60,000 as family expenses and this they spent about RM63,000. Assuming overall value of consumption remains unchanged, however the inflation rate increased to another 1%. How much money do they need to spend for next year to maintain the same standard of living as this year? (Round up to nearest 1 ringgit) A) RM65,120 C) RM67,450 B) RM66,780 D) RM70,580 For Question 4 to 8, please refer to as stated below:- Financial year end of Fund Z, 31 Oct 2001 :- Net Asset Value :- RM200 Million Units in circulation :- 300 Million Service Charge :- 6.5% Income distribution :- 4 sen per unit Unit Split :- 2 : 5 (Unit price round up to nearest 3 decimal points) 4. What is the units in circulation after income distribution and unit split? A) Unchanged C) 380 Million units B) 420 Million units D) 530 Million units 5. What is the NAV per unit ex-distribution and post-unit split? A) RM0.667 C) RM0.627 B) RM0.476 D) RM0.448 6. What is the Selling Price as at 31 Oct 2001? A) RM0.456 C) RM0.477 B) RM0.710 D) RM0.668 7. What is the Buying Price, assuming there is a repurchase of 1%? A) RM0.444* C) RM0.457 B) RM0.706 D) RM0.720 8. An investor invested RM18,000 of his EPF money into Fund Z on 31st Oct 2001, how many units will he gets? A) 37,735.85 units C) 38,386.37 units B) 37,278.49 units D) 38,756.98 units 9. What are the impacts to NAV and Units in circulation due to income distribution? A) Both NAV and Units in circulation will increase. B) NAV with increase and Units in circulation will decrease. C) NAV will decrease and Units in circulation remain unchanged. D) NAV will remain unchanged and Units in circulation will increase. 10. What are the impacts to NAV and Units in circulation due to unit split? A) Both NAV and Units in circulation will increase. B) NAV with increase and Units in circulation will decrease. C) NAV will decrease and Units in circulation remain unchanged. D) NAV will remain unchanged and Units in circulation will increase. 11. Dollar Cost Averaging principle is referring to regular investment with fixed amount of money. What is the average cost per unit as at below? (Round up to nearest 1 sen) For the purpose of training only 33 Date Buying Price Selling Price Investment amount Jan 2003 RM0.50 RM0.53 RM1,200 Feb 2003 RM0.55 RM0.58 RM1,200 Mac 2003 RM0.53 RM0.56 RM1,200 A) RM0.56 C) RM0.58 B) RM0.61 D) RM0.63 12. An investor has borrowed up to maximum margin of financing to invest into Fund BB. His total investment amount is RM120,000. How much he has forked out from his own pocket to invest in it? A) RM44,600 C) RM38,647 B) RM39,600 D) RM42,678 13. Given tax rate is 15% and inflation rate of 4% and estimated return rate of 11% what is the effective rate of return after tax and inflation? A) 5.35% C) 8.75% B) 6.92% D) 7.05% 14. Management Fee :? Trustee fee : RM7,500 Auditor’s fee : RM2,800 Bank charges and others : RM6,000 Average Fund Size : RM3,002,580 MER : 1.81% Given the above information, please calculate the Management Fee. A) RM36,387.30 C) RM38,046.70 B) RM37,098.40 D) RM39,365.40 15. What is the maximum offer period of a newly launched fund? A) 7 days C) 21 days B) 14 days D) 1 month 16. Cik Siti invested lump sum RM20,000 in Fund ABX 8 years ago. Assuming the fund is giving an average return of 10% for the last 8 years. The fund is charging up-front fee and annual management fee of 6% and 1.6% respectively What is the value of her investment after 8 years? A) RM35,841.99 C) RM40,649.56 B) RM38,375.78 D) RM41,937.39 17. Miss Cheah has accumulated 12,000 units before unit split at the value of RM6,000. After the unit split of 1:4, she has A) 12,000 units at the value of RM7,500 B) 9,600 units at the value of RM6,000 C) 12,000 units at the value of RM4,800 D) 15,000 units at the value of RM6,000 For question 18, 19 and 20. On 25 April 2000, the status of Fund XYZ at the closed of business day is as below: NAV : RM80,000,000 Units in circulation : 85,000,000 units Initial service charge : 5% Pricing Method : Forward (Round up to nearest 1 sen) 18.What is the selling price for Fund XYZ that will be published in the following day? A) RM 1.35 C) RM 0.99 B) RM 1.29 D) RM 0.87 19. Miss would like to invest RM20,000 on 25 April 2000, how many units is she entitle to receive? C. 20,202.02 units C) 26, 119.40 units D. 25, 925.93 units D) 25, 119.40 units 20. If Mr. B is selling 5,000 units on 25 April 2000, how much will he gets? Assume there is no repurchase fee is charge. A) RM 3,890 C) RM 5,750 B) RM 4,700 D) RM 6,800 For the purpose of training only 34  MOCK QUESTIONS SET F 1. … is the first totally Malaysia unit trust fund launched by … in … A. Malaysia Investment Fund, Asia Unit Trust Bhd, 1966 B. First Malaysia Fund, Malayan Unit Trust Limited, 1965 C. Malaysian Investment Fund, Asia Unit Trust Bhd, 1965 D. First Malayan Fund, Malayan Unit Trust Limited, 1959 2. MER of Fund ABC is 1.71%, which means … A. Fund ABC carries an expense of RM1.71 for every RM1,000.00 of the average NAV of the fund during that financial year end. B. Fund ABC carries an expense of RM0.171 for every RM100 of the average NAV of the fund during that financial year end. C. Fund ABC carries an expense of RM171 for every RM100.00 of the average NAV of the fund during that financial year end. D. Fund ABC carries an expense of RM17.10 for every RM1,000.00 of the average NAV of the fund during that financial year end. 3. Mr. A would like to invest in a unit trust fund, which closely resembles the performance of KLCI. Which unit trust fund would you recommend to him? A. Growth fund C. Index fund B. Income fund D. Bond fund For question 4 and 5 Initial investment : RM50,000 Estimated average return : 10% per annum Ongoing management fee : 1.5% Initial service charge : 5% 4. What will be the expected return for 5 years? A. RM71,423.69 C. RM74,283.37 B. RM73,364.49 D. RM74,563.87 5. Assuming the ongoing management fee increased to 1.8%. What is the expected value of investment in 10 years? A. RM100,356.58 C. RM106,378.30 B. RM104,463.90