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CISI Intro to Investments Mistakes Exam Questions and Answers
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CISI Intro to Investments Mistakes Exam Questions and Answers
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CISI Intro to Investments Mistakes ExamQuestions and Answers
If a country reduces its net imports of goods by 5%, this will: - Answer -Decrease its
current account deficit
The Bank of England's Monetary Policy Committee is responsible for: - Answer -
Keeping inflation within a government set range
Which ONE of the following is the index used as the standard measure of inflation in the
UK? - Answer -CPI
A company is subject to a takeover and an offer is made to each shareholder. What sort
of corporate action is this? - Answer -Voluntary
Which ONE of the following is a feature of rights issues? - Answer -They are issued at a
discount to the existing share price
Which ONE of the following is an example of a 'mandatory with options' corporate
action? - Answer -Rights issue
Which ONE of the following raises new cash for a company? - Answer -Rights Issue
Which of the following advantages will accrue to the holders of an index-linked bond as
opposed to those holding other forms of bond? - Answer -Income flow is protected from
the effects of inflation
If interest rates are forecast to fall in the next six months which of the following parties to
a bond would be in the most favourable position? - Answer -An issuer with a call
provision
Bond X and Bond Y are rated AA and BB, respectively, by Standard & Poor's. This
indicates that: - Answer -Bond Y is likely to have a higher yield than Bond X
The coupon for index-linked bonds is adjusted in line with the: - Answer -Inflation rate
In which currency would a foreign bond issued by a Swiss company in the UK be
denominated? - Answer -Sterling
, Which one of the following pays interest? - Answer -Certificate of deposit
Which one of the following is a feature of Treasury bills? - Answer -They are priced at a
discount to par value
What is a primary market? - Answer -The market where companies raise capital, prior to
being quoted on an exchange
One advantage of money market instruments is: - Answer -The nominal value of the
amount invested is preserved
Which one of the following is a typical feature of a Treasury bill? - Answer -Purchase
price less than the nominal value
A key difference between a capital market instrument and a money market instrument is
that: - Answer -The term is normally longer for capital market instruments
Why might an investor choose to invest in commercial property, rather than in
residential property? - Answer -Steady income from rent
Which one of the following instruments is issued weekly via a Debt Management Office
(DMO) auction on behalf of the government? - Answer -Treasury bills
What is the settlement date for a forex forward transaction? - Answer -Date agreed
between the two parties
Which exchange provides a marketplace for trading contracts in crude oil products? -
Answer -Intercontinental Exchange
On which market are futures in crude oil transacted? - Answer -ICE
Company B agrees to recompense Company A if one of Company A's assets falls in
value. What type of arrangement is this? - Answer -Credit default swap
What is the only element of a futures contract that is open to negotiation between buyer
and seller? - Answer -Price
If the put option held by a trader has an exercise price of 220p, this normally means
that: - Answer -The option will only be exercised if the asset price is below 220p
What type of collective investment is traded on the stock market and may trade at a
discount or premium to net asset value? - Answer -An investment trust
Unit trusts are normally purchased in which ONE of the following ways? - Answer -
Purchasing direct from the manager
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