Chapter 5

Questão 1 de 18

1

Which of the following types of investment incurs a liability for capital gains tax once sold?

Selecione uma das seguintes:

  • Classic car

  • Government bonds

  • Units in unit trusts

  • Primary residence

Explicação

Questão 2 de 18

1

Which of the following implications will help to ensure financial advisers act in their clients'
best interest?

Selecione uma das seguintes:

  • Firms that give investment advice must address the potential for adviser remuneration to
    distort consumer outcomes

  • Investment firms will need to switch clients into products that have no trailing
    commissions

  • Firms that give investment advice must charge fees within a guidance range set by the FCA

  • Investment firms will need to change their price lists to remove all percentage based fees

Explicação

Questão 3 de 18

1

What are the possible implications for investment performance of investing in an ethical fund?

Selecione uma das seguintes:

  • The fund may be more volatile because of the increased exposure to smaller company
    holdings

  • Ethical funds invest primarily in large companies producing lower total returns

  • There are no suitable benchmarks for the client to measure performance against

  • Total returns are likely to be higher due to the increased level of diversification in ethical
    funds

Explicação

Questão 4 de 18

1

Jackie is a private client investor and you ascertain that her investment objective and risk
tolerance are capital growth and cautious. During the meeting she asks you for your thoughts
on the use of derivatives. You respond that, in your opinion, derivatives:

Selecione uma das seguintes:

  • are normally appropriate only where there is a high risk tolerance

  • only generate an income stream and so are not compatible with her objective

  • can generate capital growth and are suitable where there is a low risk tolerance

  • can be traded only on an execution only basis as firms cannot offer any advice or opinion

Explicação

Questão 5 de 18

1

Which of the following rules applying to financial intermediaries is directly underpinned by the
principle of fiduciary responsibility?

Selecione uma das seguintes:

  • Commission disclosure

  • Money laundering

  • Professional indemnity

  • Best execution

Explicação

Questão 6 de 18

1

Corporation tax is a factor when considering investment as it can:

Selecione uma das seguintes:

  • block investment opportunities

  • differ between countries

  • be deferred indefinitely

  • be subject to a different accounting period

Explicação

Questão 7 de 18

1

When recommending an investment product to a client, what material information MUST the
adviser disclose in order to satisfy the fiduciary relationship that exists between the two
parties?

Selecione uma das seguintes:

  • Only details which have been specifically requested by the client

  • Whatever is needed to produce a guaranteed return

  • Only details which are considered to affect the investment risk

  • Whatever is needed in order for the client to make an informed decision

Explicação

Questão 8 de 18

1

An independent financial adviser would make recommendations on which type of product?

Selecione uma das seguintes:

  • The firm's own products

  • Products of one other provider

  • Products from across the market place

  • A range of products from a limited number of providers

Explicação

Questão 9 de 18

1

A consumer purchases a designated investment and the firm provides the consumer with
detailed cancellation rights over the telephone, immediately after the purchase. How has the
firm contravened the rules?

Selecione uma das seguintes:

  • Designated investments require notice of cancellation rights to be signed by the customer

  • Cancellation rights must be given in writing

  • Consumers must be informed of cancellation rights before a purchase is confirmed in all
    cases

  • Consumers must receive cancellation rights in writing before identification checks are
    undertaken

Explicação

Questão 10 de 18

1

Which is the MOST important reason for an adviser to conduct regular reviews of a client's
circumstances and arrangements?

Selecione uma das seguintes:

  • To help the client complete any tax documentation

  • To ensure that the adviser complies with any regulatory requirements

  • To ensure that any products continue to meet a client's needs

  • To ensure that the adviser retains any repeat business from the client

Explicação

Questão 11 de 18

1

Paulo is a non-resident investor. How is he likely to benefit from a double taxation treaty?

Selecione uma das seguintes:

  • By incurring tax at a reduced concessionary rate

  • By opting for the country with the lowest tax rate

  • By avoiding the need to register with the tax authorities

  • By obtaining a refund of withholding tax

Explicação

Questão 12 de 18

1

When conducting investment business for a private customer, what must a firm do?

Selecione uma das seguintes:

  • Only invest in products that are classified as low risk

  • Make the customer aware of costs and commissions

  • Meet face to face with the client

  • Disclose the underlying investments in the investment products

Explicação

Questão 13 de 18

1

Which of the following would provide the lowest level of risk for risk averse investors with
short term horizons?

Selecione uma das seguintes:

  • Long term gilts

  • Cash deposits

  • Ordinary shares

  • Warrants

Explicação

Questão 14 de 18

1

How does asset allocation help meet a client's needs?

Selecione uma das seguintes:

  • It enables clients to invest wholly in one of the MAIN asset classes to maximise returns

  • It reduces the investor's risk by investing across a range of asset classes, sectors and individual stocks

  • It provides a benchmark for a client to assess how well his investments have performed

  • It enables investors to pool their investments with others and reduce the risk of direct
    investment in shares

Explicação

Questão 15 de 18

1

Which of the following is a factor that must be considered when constructing a portfolio?

Selecione uma das seguintes:

  • Verification of the client's identity

  • The client's risk tolerance

  • The category of investment service required

  • Performance measurement

Explicação

Questão 16 de 18

1

If clients approach a firm knowing exactly which product they wish to purchase, and ask the
firm simply to arrange the purchase, this type of transaction is normally described as:

Selecione uma das seguintes:

  • best advice

  • instruction processing

  • nominal dealing

  • execution only

Explicação

Questão 17 de 18

1

Which mix of investments is most appropriate for a risk averse investor?

Selecione uma das seguintes:

  • 50% commodities and 50% equities

  • 50% cash and 50% gilts

  • 50% foreign exchange and 50% CFD's

  • 50% property and 50% PIBS

Explicação

Questão 18 de 18

1

The relationship between an adviser and a client means that the adviser has a duty to:

Selecione uma das seguintes:

  • ensure suitable compensation is available if the client suffers a loss

  • check with a third party before providing advice to the client

  • report any wrong-doings to the authorities

  • always act in the best interests of the client

Explicação

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