ICWIM Practice Questions

A.  

They have high value investment levels

B.  

They are deemed unsuitable for retail investors

C.  

Due to regulatory restrictions on marketing

D.  

Because of the embedded risk

A.  

So that the portfolio is easier to understand

B.  

So that the portfolio moves in line with the market

C.  

In order to produce a low-volatility portfolio

D.  

To produce a high-volatility portfolio

A.  

No correlation

B.  

Weak correlation

C.  

Perfect negative correlation

D.  

Perfect positive correlation

A.  

It has not outperformed the benchmark

B.  

The fund will be easier to manage

C.  

As alpha improves, so does beta

D.  

It will become more attractive to risk-averse clients

A.  

Mass affluent

B.  

High-net-worth

C.  

Very-high-net-worth

D.  

Ultra-high-net-worth

A.  

The default risk can be taken into account

B.  

A risk of inflation rising unexpectedly and its effect on the real value of the bond's coupon payments and redemption payment can be taken into account

C.  

An investor can reinvest the interest payment at the same net redemption yield

D.  

A direct comparison can be made of the net return to the investor

A.  

It makes it easier for the fund manager

B.  

Because the portfolio spans several asset classes

C.  

Because the portfolio forms part of the investment universe

D.  

To lower the tracking error

A.  

Everything known about a company is already in the price

B.  

History tends to repeat itself

C.  

Investors are overly sensitive to news

D.  

A strong board is reflected in a company’s share price

A.  

Potential higher returns

B.  

Tax free savings

C.  

Guaranteed high returns

D.  

Reduced income tax liability

A.  

Issuing a key features document

B.  

Conducting a risk benefit analysis

C.  

Providing a choice of options

D.  

Carrying out a fact find