Exam (elaborations)
CISI test questions with correct answers
- Course
- Institution
CISI test questions with correct answers
[Show more]
Content preview
CISI test questions with correct answersWhat is the minimum age that the benefits may be taken from a pension scheme? -
Answer -55
What are the key feature of unit trusts and OEICs? - Answer -Their valuation is directly
linked to the value of the assets
What two documents are needed to form a company? - Answer -Articles of Association,
Memorandum of Association
How is the share price of an investment trust determined? - Answer -A combination of
the value of the underlying assets and supply and demand
How do you calculate flat yield? - Answer -Annual coupon/bond price X 100
A bonus issue made to shareholders is an example of which type of corporate action? -
Answer -Mandatory
How does a private investor purchase investment trust shares in the secondary market?
- Answer -Through a stockbroker or financial intermediary
Private equity firms are usually set up as what type of company? - Answer -Limited
partnerships
What are short-term securities issued by commercial banks in exchange or fixed-term
deposits called? - Answer -Certificates of deposit
What is the principal role of a unit trust manager? - Answer -Deciding where the money
is to be invested
When can a claim be made from the Financial Services Compensation Scheme (FSCS)
- Answer -Once the firm is in default
What is effective annual rate o interest? - Answer -The rate of interest you actually pay
on the loan, regardless of its duration
If Company A pays Company B to recompense it if one of its investments falls in value,
what is this known as? - Answer -Credit default swap
, What is the advantage of with-profits whole-of-life policy over a unit-linked whole-of-life
policy - Answer -Profits are locked in each year
If a company makes a bonus issue on a 4:5 basis, what will existing shareholders
receive? - Answer -4 shares for every 5 that they own
What are the two documents required to form a company? - Answer -Articles of
Association and Memorandum of Association
Give three groups which custodian banks look after securities on behalf of - Answer -1.
Fund managers
2. Pension funds
3. Insurance companies
How are unit trust purchased? - Answer -Directly from the manager
What type of corporate action is a bonus issue? - Answer -Mandatory
Which type of whole-of-life insurance policy pays only the insured sum on death? -
Answer -Non-profit (fixed sum chosen at outset)
What type of trust gives the beneficiary/ies a right to income of a trust during their lives
and capital possess on to others in their deaths - Answer -Interests in possession trusts
What is the main advantage of a repayment mortgage over other types of mortgages for
the borrower? - Answer -The mortgage is guaranteed to be paid off at the end of the
term (providing they meet all the payments)
What is the role of market makers? - Answer -Quoting firm two-way prices
How do you calculate the effective annual interest rate? - Answer -Divide the annual
rate by the frequency within a year it is charged. Then multiply it by its self the number
of times interest is charged in a year. e.g. 16%/2 = 0.08. 1.08x1.08 = 1.1664 = 16.64%.
or
50%/12 = 4.167% a month. 1.0467 x1.0467 (12 times) = 63.2%
What is PSNCR? - Answer -Public Sector Net Cash Requirement - the shortfall when
the government spends more than it receives from tax and other revenue
At what age can young people access the proceeds of their Junior ISA - Answer -18
How do portfolio managers use futures contracts and put options to hedge against the
value of their portfolios falling? - Answer -Selling a sufficient number of futures contracts
or buying put options
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ALVINK2022. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78075 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now