CMFAS M8 – Collective Investment Schemes

Real estate investments usually involve more complexities than the other investment categories because of which of the following reasons?
I. The uniqueness of each property
II. The differing rights associated with ownership of each property
III. The absence of organised markets for the ready sale and purchase of the property or ownership interest
IV. The capital depreciation in the property’s value

The bond market which if also known as which of the following is a financial market where participants buy and sell debt securities, usually in the form of bonds?
I. The debt
II. The credit
III. The fixed income market
IV. The primary market

There are risks associated with Extended Settlements, which of the following is(are) not associated with ES?
I. The leveraged nature of ES contracts
II. Margin calls
III. Liquidity
IV. Volatility

The following statements describes what options are except?
I. A formal contract between a seller and a buyer to buy or sell some stock in the future at some pre-set price (strike price).
II. Equity call option gives the right (not obligation) to buy at strike price; put option gives the right (not obligation) to sell at strike
III. In terms of risks, they have limited exposure for the option buyer – the maximum capital loss for the option buyer is the purchase price of the option (option premium)
IV. They do their settlement physical delivery (common with commodities and bonds) or cash settlement

Which of the following is(are) considered to be the benefits of financial derivatives?
I. Financial derivatives can help reduce risks by insuring against potential risks.
II. They have the chance to let investors earn more profits.
III. They give the investor the freedom to buy assets at a low cost or sell them at a higher price.
IV. They can protect their investments by taking positions in the futures market to protect the gains that they have made in the cash market.

Financial derivatives are financial assets in which the values are derived from, or depend on, some other assets such as?
I. Equity
II. Foreign exchange
III. Commodities
IV. Bonds

Financial derivatives have attained overwhelming popularity and rapid growth in recent years for a number of reasons including which of the following?
I. It helps to make the financial market more complete
II. It allows speculators and risk managers to use these assets to pursue their goals
III. It attracts traders to these markets because of their trading efficiency
IV. It features a much lower transaction costs and liquid markets

ES contracts are flexible instruments that offer the investor numerous advantages such as?
I. Capital efficiency
II. Ease of taking short positions
III. A hedging tool
IV. Longer view of the market

Which of the following occur(s) to shareholders when a company makes a profit?
I. The company may issue bonus issues free of charge to existing shareholders.
II. The company may issue bonus issues at a very low rate to existing shareholders.
III. The company may choose to diversify its bonds for existing shareholders.
IV. The company may provide capital gain bonuses at a higher rate for its existing shareholders.

Besides the traditional investment assets, investors have the option of investing in alternative classes of assets. Which is(are)?
I. Financial derivatives
II. Real estate investment
III. Cryptocurrency
IV. Structured products

The financial derivatives include which of the following?
I. Options
II. Contracts for difference
III. Warrants
IV. Future

Bond ratings are based on both qualitative and quantitative factors, including which of the following?
I. Issuer’s financial ratios
II. Issuer’s profitability ratios
III. Subordinated and guarantee provisions
IV. Outlook on the issuers

Bond issues of governments and businesses typically are rated by rating agencies such as?
I. Standard and Poor’s Corporation
II. Moody’s Investors Service and Fitch Ratings
III. Leeman Brother’s Service Ratings
IV. Dal Jones

Which of the following is privilege allowing existing shareholders to buy shares of an issue of common stock shortly before it is offered to the public, at a specified and usually discounted price?
I. Class A Shareholder Rights
II. Big Shareholder Rights
III. Subscription Rights
IV. Promotional Rights

Which of the following features are common to fixed income securities?
I. Par, Face or Maturity Value
II. Coupon Rate
III. Maturity Date
IV. Price

Which of the following are true of Singapore Savings Bonds?
I. Redemption is done in multiples of $500, up to the amount invested.
II. Interest income from the Savings Bonds is exempt from tax.
III. Investors can redeem their Savings Bond in any given month before maturity.
IV. There is no penalty for exiting the investment early.

Bond ratings are based on which of the following factors?
I. Qualitative factors
II. Quantitative factors
III. Definitive factors
IV. Constructive factors

Long-term debts can be issued by the following except?
I. Governments
II. Corporations
III. NGOs
IV. Charities

In a financial crisis, the investor potentially might not be able to sell the bond at all because the markets are in chaos. However, this risk does not matter if the investor intends to do which of the following?
I. Hold the bond to maturity.
II. Diversify the bond.
III. Reinvest into the bond.
IV. Trade the bond with other investors through money market instruments.

Time deposits tend to provide a higher return than the savings accounts because of which of the following?
I. The time commitment made by the investor
II. The security the banks offer
III. The special privileges provided to the investors
IV. The earnings made from the banks