Question 1

An institution in which investors can buy portions and where the funds are invested by a funds manager is called a:

Accepted Answer

A)  listed company. 
B)  public unit trust. 
C)  life insurance office. 
D)  superannuation fund. 
A)  listed company. 
B)  public unit trust. 
C)  life insurance office. 
D)  superannuation fund. B

Question 2

A suitable benchmark for measuring the performance of a share fund would be the SBC 90- day bill index.

Accepted Answer

A) True 
 B)False  False

Question 3

Most unlisted trusts stand ready to buy units back from members at a price determined by a formula set out in the prospectus.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following statement is incorrect?

Accepted Answer

A)  In defined benefit funds, the final payment is defined in advance. 
B)  In defined contribution (or accumulation) funds, the investment risk is borne by the members. 
C)  In defined contribution (or accumulation) funds, the member's contribution is defined and the final benefit depends on the fund's investment performance. 
D)  None of the above. 
A)  In defined benefit funds, the final payment is defined in advance. 
B)  In defined contribution (or accumulation) funds, the investment risk is borne by the members. 
C)  In defined contribution (or accumulation) funds, the member's contribution is defined and the final benefit depends on the fund's investment performance. 
D)  None of the above.

Question 5

Identify and describe three different types of public unit trust.

Accepted Answer

One is a cash management trust, which in

Question 6

The 'volatility' of an investment fund refers to:

Accepted Answer

A)  a fund's exposure to foreign currency fluctuations. 
B)  fluctuations from year to year in its entry and exit fees. 
C)  the frequency of breaches by the fund of government regulations. 
D)  the variation in the fund's performance relative to a line- of- best- fit. 
A)  a fund's exposure to foreign currency fluctuations. 
B)  fluctuations from year to year in its entry and exit fees. 
C)  the frequency of breaches by the fund of government regulations. 
D)  the variation in the fund's performance relative to a line- of- best- fit.

Question 7

In recent years, there has been a sharp increase in public unit trusts' holdings of equities at the expense of other asset forms.

Accepted Answer

A) True 
 B)False

Question 8

Public unit trusts represent a form of investment that is:

Accepted Answer

A)  direct. 
B)  indirect. 
C)  declining. 
D)  off- balance sheet. 
A)  direct. 
B)  indirect. 
C)  declining. 
D)  off- balance sheet.

Question 9

If the market is efficient, the tracking error between indexed funds and the market return will be zero.

Accepted Answer

A) True 
 B)False

Question 10

An active fund manager realises he or she cannot beat the market and therefore adopts a strategy of seeking to track the market index.

Accepted Answer

A) True 
 B)False

Question 11

The assumption of market efficiency says that fund managers:

Accepted Answer

A)  cannot consistently outperform the market. 
B)  will always outperform the market. 
C)  can at least outperform 10,000 monkeys choosing investments at random. 
D)  can never outperform the market. 
A)  cannot consistently outperform the market. 
B)  will always outperform the market. 
C)  can at least outperform 10,000 monkeys choosing investments at random. 
D)  can never outperform the market.

Question 12

The term 'herd behaviour' refers to:

Accepted Answer

A)  the way in which returns on various investment classes tend to converge. 
B)  the tendency for different fund managers to adopt the same portfolio mix. 
C)  the way in which funds use fee structures to group customers together. 
D)  none of the above 
A)  the way in which returns on various investment classes tend to converge. 
B)  the tendency for different fund managers to adopt the same portfolio mix. 
C)  the way in which funds use fee structures to group customers together. 
D)  none of the above

Question 13

What are RSAs and why were they introduced?

Accepted Answer

RSAs are retirement savings accounts and

Question 14

If a share trust reports a high return in a period, it does not necessarily follow that the fund manager has performed well.

Accepted Answer

A) True 
 B)False

Question 15

Fixed- interest trusts invest in:

Accepted Answer

A)  shares. 
B)  derivatives. 
C)  bonds. 
D)  property. 
A)  shares. 
B)  derivatives. 
C)  bonds. 
D)  property.

Question 16

Mortgage trusts hold mortgages as investments.

Accepted Answer

A) True 
 B)False

Question 17

A university student wishes to invest in a vehicle which offers the prospect of a high return. He will most likely choose a(n)____________ trust.

Accepted Answer

A)  cash management 
B)  bond 
C)  mortgage 
D)  equity 
A)  cash management 
B)  bond 
C)  mortgage 
D)  equity

Question 18

Hedge funds started in 1949.

Accepted Answer

A) True 
 B)False

Question 19

A tool being developed by banks to fight back in the competition with superannuation funds for investor dollars is:

Accepted Answer

A)  retirement savings accounts. 
B)  eligible termination payments. 
C)  allocated pensions. 
D)  reasonable benefit limits. 
A)  retirement savings accounts. 
B)  eligible termination payments. 
C)  allocated pensions. 
D)  reasonable benefit limits.

Question 20

The minimum required contribution by Australian employees to their superannuation fund is of____________ salary.

Accepted Answer

A)  9% 
B)  4% 
C)  11% 
D)  7% 
A)  9% 
B)  4% 
C)  11% 
D)  7%

An institution in which investors can buy portions and where the funds are invested by a funds manager is called a:

A suitable benchmark for measuring the performance of a share fund would be the SBC 90- day bill index.

Most unlisted trusts stand ready to buy units back from members at a price determined by a formula set out in the prospectus.

Which of the following statement is incorrect?

Identify and describe three different types of public unit trust.

The 'volatility' of an investment fund refers to:

In recent years, there has been a sharp increase in public unit trusts' holdings of equities at the expense of other asset forms.

Public unit trusts represent a form of investment that is:

If the market is efficient, the tracking error between indexed funds and the market return will be zero.

An active fund manager realises he or she cannot beat the market and therefore adopts a strategy of seeking to track the market index.

The assumption of market efficiency says that fund managers:

The term 'herd behaviour' refers to:

What are RSAs and why were they introduced?

If a share trust reports a high return in a period, it does not necessarily follow that the fund manager has performed well.

Fixed- interest trusts invest in:

Mortgage trusts hold mortgages as investments.

A university student wishes to invest in a vehicle which offers the prospect of a high return. He will most likely choose a(n)____________ trust.

Hedge funds started in 1949.

A tool being developed by banks to fight back in the competition with superannuation funds for investor dollars is:

The minimum required contribution by Australian employees to their superannuation fund is of____________ salary.

Financial Markets

Debt Securities and Markets

Introduction to Financial Calculations

Banks and Other Deposit Taking Institutions

The Payments System

Interest Rates, the Yield Curve and Monetary Policy

The Foreign Exchange Market

Listed Securities

Fixed Rate Derivatives

Options

Global Financial Crisis

Managing Foreign Exchange Risk

Managing Interest Rate Risk

Filters

Exam 6: Managed and Superannuation Funds

An institution in which investors can buy portions and where the funds are invested by a funds manager is called a:

A suitable benchmark for measuring the performance of a share fund would be the SBC 90- day bill index.

Most unlisted trusts stand ready to buy units back from members at a price determined by a formula set out in the prospectus.

Which of the following statement is incorrect?

Identify and describe three different types of public unit trust.

The 'volatility' of an investment fund refers to:

In recent years, there has been a sharp increase in public unit trusts' holdings of equities at the expense of other asset forms.

Public unit trusts represent a form of investment that is:

If the market is efficient, the tracking error between indexed funds and the market return will be zero.

An active fund manager realises he or she cannot beat the market and therefore adopts a strategy of seeking to track the market index.

The assumption of market efficiency says that fund managers:

The term 'herd behaviour' refers to:

What are RSAs and why were they introduced?

If a share trust reports a high return in a period, it does not necessarily follow that the fund manager has performed well.

Fixed- interest trusts invest in:

Mortgage trusts hold mortgages as investments.

A university student wishes to invest in a vehicle which offers the prospect of a high return. He will most likely choose a(n)____________ trust.

Hedge funds started in 1949.

A tool being developed by banks to fight back in the competition with superannuation funds for investor dollars is:

The minimum required contribution by Australian employees to their superannuation fund is of____________ salary.

Financial Markets

Debt Securities and Markets

Introduction to Financial Calculations

Banks and Other Deposit Taking Institutions

The Payments System

Interest Rates, the Yield Curve and Monetary Policy

The Foreign Exchange Market

Listed Securities

Fixed Rate Derivatives

Options

Global Financial Crisis

Managing Foreign Exchange Risk

Managing Interest Rate Risk

Filters