Which of the following gives the right, but not the obligation, to sell individual equity at a specified date for a given price?
Future
Forward contract
Put option
Call option
Which of the following Fitch ratings denotes the LOWEST level of risk for a bond?
D
BBB
C
AAA
Which of the following statements is TRUE about preference shares?
The most common type is the deferred share
They offer a lower dividend rate than the comparative coupon rate on a debenture
Dividends are guaranteed each year
In most cases they do not carry voting rights International Certificate in Wealth & Investment Management
Global Depositary Receipts traded on the London Stock Exchange are settled in which currency?
Euros
US Dollars
Japanese Yen
UK Sterling
Which MAIN class of financial asset is normally considered to be the LEAST liquid?
Equities
Corporate bonds
Government bonds
Property
Which measurement in relation to a fixed interest investment is given by the following formula?
Grossed up redemption yield
Gross redemption yield
Net redemption yield
Running yield
The running yield of a corporate bond is determined by calculating the coupon as a percentage of the:
market price
issue price
gross dividend
nominal value
Where the mining costs of a particular metal increase to 105% of that metal's current price, this indicates that:
demand is significantly rising
supply has become unreliable
there is likely to be a shortage of raw materials
production activities are likely to stop
A call option is an option that generally confers
the right to buy
the right to sell
a contract to sell
a contract to buy
Exchange-traded funds normally operate by:
tracking indices
tracking an individual security
investing in fund of funds
investing in manager of managers funds
Units in a unit trust fund are sold by which of the following?
The trustee
The registrar
The manager
The depositary
What is a key feature of exchange-traded commodities?
They are an open-ended collective investment vehicle
They are available only to high net worth individuals
There is limited exposure to derivative contracts
No additional shares can be created by the fund
Where an investment fund established in the UK satisfies the UCITS directive and is sold in another EU country, what is the position regarding local taxes and local marketing laws?
It will not be subject to either
It will be subject to local taxes but not local marketing laws
It will be subject to local marketing laws but not local taxes
It will be subject to both local taxes and local marketing laws
The Undertakings for Collective Investment in Transferable Securities Directives (UCITS) cover investment funds established in which location(s)?
England and Wales only
UK only
UK and France only
All European Union countries
One of the fundamental aims of a traditional hedge fund is to minimise which type of investment-related risk?
Inflation risk
Issuer risk
Market risk
Liquidity risk
A private equity fund is MOST likely to use a structure similar to that of which of the following?
Investment Trust
Limited Partnership
OEIC
SICAV
If a collective investment scheme is unauthorised, this means that it is specifically banned from:
operating a bid/offer spread
holding some of the fund assets in cash
being marketed to the general public
paying out dividends