Question 1

The major downside of managed investments is the fees that investors must pay.

Accepted Answer

A) True 
 B)False

Question 2

In the past, property trusts have come under pressure because they have invested highly in liquid assets and yet declined to offer immediate redemption to investors.

Accepted Answer

A) True 
 B)False

Question 3

An attractive feature of allocated pensions is that the pension payments received are tax- free.

Accepted Answer

A) True 
 B)False

Question 4

Approved deposit funds are deposit products offered by banks that allow the investor to access high- yielding assets like shares and property.

Accepted Answer

A) True 
 B)False

Question 5

The single responsible entity of a fund has a responsibility to:

Accepted Answer

A)  create a constitution for the fund. 
B)  ensure the funds assets are valued at regular intervals. 
C)  ensure compliance with the Corporations Law. 
D)  all of the above. 
A)  create a constitution for the fund. 
B)  ensure the funds assets are valued at regular intervals. 
C)  ensure compliance with the Corporations Law. 
D)  all of the above.

Question 6

The coefficient known as 'beta' measures:

Accepted Answer

A)  the covariance of a particular share with another share. 
B)  the correlation between fund returns in different countries. 
C)  the extent to which a fund outperformed the government bond rate. 
D)  the relationship between the return on a particular share and the market return. 
A)  the covariance of a particular share with another share. 
B)  the correlation between fund returns in different countries. 
C)  the extent to which a fund outperformed the government bond rate. 
D)  the relationship between the return on a particular share and the market return.

Question 7

Public unit trusts in Australia are not permitted to hold Commonwealth Government securities.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a public unit trust?

Accepted Answer

A)  Equity trusts. 
B)  Property trusts. 
C)  CMTs. 
D)  All of the above. 
A)  Equity trusts. 
B)  Property trusts. 
C)  CMTs. 
D)  All of the above.

Question 9

Discuss the advantages and disadvantages of managed investment funds.

Accepted Answer

Managed investment funds, also known as

Question 10

Unlike deposit- taking institutions, long- term savings institutions:

Accepted Answer

A)  are not capital guaranteed. 
B)  offer no tax advantages. 
C)  are listed on the stock exchange. 
D)  are not affected by market movements in asset prices. 
A)  are not capital guaranteed. 
B)  offer no tax advantages. 
C)  are listed on the stock exchange. 
D)  are not affected by market movements in asset prices.

Question 11

Fund X has a return of 12% and fund Y has a return of 9%. From these data we can conclude:

Accepted Answer

A)  fund Y has outperformed fund X. 
B)  fund X has outperformed fund Y. 
C)  fund X has outperformed the market. 
D)  more information is needed about the risk of each fund before we can make a judgment. 
A)  fund Y has outperformed fund X. 
B)  fund X has outperformed fund Y. 
C)  fund X has outperformed the market. 
D)  more information is needed about the risk of each fund before we can make a judgment.

Question 12

Most share trusts are listed.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following conditions must a self- managed superannuation funds (SMSF) satisfy?

Accepted Answer

A)  If the trustees of the fund are individuals, each of them is a member of it. 
B)  If the trustee of the fund is a company, each director of the trustee company is a member. 
C)  There are fewer than five members. 
D)  All of the above. 
A)  If the trustees of the fund are individuals, each of them is a member of it. 
B)  If the trustee of the fund is a company, each director of the trustee company is a member. 
C)  There are fewer than five members. 
D)  All of the above.

Question 14

Short- selling implies:

Accepted Answer

A)  selling call options. 
B)  selling an undervalued asset that you own. 
C)  selling an overvalued asset that you own. 
D)  selling an asset that you do not have. 
A)  selling call options. 
B)  selling an undervalued asset that you own. 
C)  selling an overvalued asset that you own. 
D)  selling an asset that you do not have.

Question 15

The term 'hedge funds' is misleading because:

Accepted Answer

A)  they only invest in fixed interest and so should be known as 'fixed- interest funds'. 
B)  hedge funds are not really funds but are more akin to banks. 
C)  they only ever exist off- balance sheet. 
D)  the standard hedge fund strategy is very risky. 
A)  they only invest in fixed interest and so should be known as 'fixed- interest funds'. 
B)  hedge funds are not really funds but are more akin to banks. 
C)  they only ever exist off- balance sheet. 
D)  the standard hedge fund strategy is very risky.

Question 16

The purpose of performance 'benchmarks' is to:

Accepted Answer

A)  provide a yardstick against which the performance of funds can be measured. 
B)  reduce the risk of a passive fund. 
C)  promote 'short- termism'. 
D)  demonstrate that fees paid are declining. 
A)  provide a yardstick against which the performance of funds can be measured. 
B)  reduce the risk of a passive fund. 
C)  promote 'short- termism'. 
D)  demonstrate that fees paid are declining.

Question 17

Normal tax applies up to the reasonable benefit limit, and thereafter concessions apply.

Accepted Answer

A) True 
 B)False

Question 18

The introduction of compulsory superannuation in Australia is to blame for Australia's poor saving performance.

Accepted Answer

A) True 
 B)False

Question 19

The strongest form of the 'efficient markets hypothesis' says that market prices fully reflect:

Accepted Answer

A)  the past history of the asset price. 
B)  all publicly available information. 
C)  all publicly and privately available information. 
D)  all current and future publicly and privately available information. 
A)  the past history of the asset price. 
B)  all publicly available information. 
C)  all publicly and privately available information. 
D)  all current and future publicly and privately available information.

Question 20

The term 'funds under management' refers to funds that have been put into trusts or other vehicles by investors with professional managers.

Accepted Answer

A) True 
 B)False

The major downside of managed investments is the fees that investors must pay.

In the past, property trusts have come under pressure because they have invested highly in liquid assets and yet declined to offer immediate redemption to investors.

An attractive feature of allocated pensions is that the pension payments received are tax- free.

Approved deposit funds are deposit products offered by banks that allow the investor to access high- yielding assets like shares and property.

The single responsible entity of a fund has a responsibility to:

The coefficient known as 'beta' measures:

Public unit trusts in Australia are not permitted to hold Commonwealth Government securities.

Which of the following is a public unit trust?

Discuss the advantages and disadvantages of managed investment funds.

Unlike deposit- taking institutions, long- term savings institutions:

Fund X has a return of 12% and fund Y has a return of 9%. From these data we can conclude:

Most share trusts are listed.

Which of the following conditions must a self- managed superannuation funds (SMSF) satisfy?

Short- selling implies:

The term 'hedge funds' is misleading because:

The purpose of performance 'benchmarks' is to:

Normal tax applies up to the reasonable benefit limit, and thereafter concessions apply.

The introduction of compulsory superannuation in Australia is to blame for Australia's poor saving performance.

The strongest form of the 'efficient markets hypothesis' says that market prices fully reflect:

The term 'funds under management' refers to funds that have been put into trusts or other vehicles by investors with professional managers.

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

The major downside of managed investments is the fees that investors must pay.

In the past, property trusts have come under pressure because they have invested highly in liquid assets and yet declined to offer immediate redemption to investors.

An attractive feature of allocated pensions is that the pension payments received are tax- free.

Approved deposit funds are deposit products offered by banks that allow the investor to access high- yielding assets like shares and property.

The single responsible entity of a fund has a responsibility to:

The coefficient known as 'beta' measures:

Public unit trusts in Australia are not permitted to hold Commonwealth Government securities.

Which of the following is a public unit trust?

Discuss the advantages and disadvantages of managed investment funds.

Unlike deposit- taking institutions, long- term savings institutions:

Fund X has a return of 12% and fund Y has a return of 9%. From these data we can conclude:

Most share trusts are listed.

Which of the following conditions must a self- managed superannuation funds (SMSF) satisfy?

Short- selling implies:

The term 'hedge funds' is misleading because:

The purpose of performance 'benchmarks' is to:

Normal tax applies up to the reasonable benefit limit, and thereafter concessions apply.

The introduction of compulsory superannuation in Australia is to blame for Australia's poor saving performance.

The strongest form of the 'efficient markets hypothesis' says that market prices fully reflect:

The term 'funds under management' refers to funds that have been put into trusts or other vehicles by investors with professional managers.

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