CCP Paper 1 - Securities

25 Questions | Total Attempts: 43

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CCP Quizzes & Trivia

Intended for those who sitting for CCP exam paper 1


Questions and Answers
  • 1. 
    A borrower that obtains credit facilities by providing strategic shareholding in a listed company as collateral would most likely provide:
    • A. 

      Pledge of the shares

    • B. 

      Charge on the shares

    • C. 

      Assignment on the shares

    • D. 

      Lien and pledge on the shares

  • 2. 
    Lender do not feel comfortble with accepting specialized machinery as collateral for the following reasons:
    1. Marketablility is a problem
    2. Stability is a problem
    3. Transferbility is a problem
    4. Enforceability is a problem
    • A. 

      I, ii and iii

    • B. 

      Ii,iii and iv

    • C. 

      I, ii and iv

    • D. 

      All of the above

  • 3. 
    Unlisted shares are usually not a preferred colleteral because:
    • A. 

      The values fluctuate in tandem with the stock market

    • B. 

      It is difficult to determaine their value

    • C. 

      The assets of the company may already be encumbered

    • D. 

      The presence of off balance sheet liabilities

  • 4. 
    Lenders usually provide a high margin of financing for housing loan as:
    • A. 

      The loan is secured by property that is readily assessable

    • B. 

      The values may appreciate and therefore helps in growth in equity from borrower

    • C. 

      The regulatory requirements demand a high margin of financing

    • D. 

      The lender can discount the housing loan papers with Cagamas

  • 5. 
    When providing unsecured loans to a borrower, a lender would have to balance all the following EXCEPT:
    • A. 

      Customer's creditworthiness

    • B. 

      Reasonable risk taking

    • C. 

      The profit potential

    • D. 

      Recovery risk

  • 6. 
    Stability of collateral can be affected by the following factors except:
    • A. 

      Preishablility of assets

    • B. 

      Liquidity of the assets

    • C. 

      Goods subject to rapid technological changes

    • D. 

      Number of years remaining to maturity for leasehold land

  • 7. 
    Physical transferability would restrict the value of an assets charged.  This would most likely happen in the case of:
    • A. 

      Specially assemble equipment

    • B. 

      Malay Reserved land

    • C. 

      Perishable goods

    • D. 

      An asset whose usage is very specific

  • 8. 
    An open ended charge would be one that facilitates:
    • A. 

      Providing increamental lines by having additional security documentation

    • B. 

      Creation of additional charge without a new charge document being executed

    • C. 

      Extending incremental lines without having to create any new charge

    • D. 

      Obtaining additional credit lines without the need for registration with CCM

  • 9. 
    A fixed charge under a debenture is best explained by the following statement:
    • A. 

      It prevents the directors from dealing with such assets without consent of debenture holder.

    • B. 

      It gives the company the freedom to deal in the assets charge.

    • C. 

      So long as crystailization has not taken place, company has the freedom to deal in the assets charged

    • D. 

      Such assets can only be sold off by way of public auction

  • 10. 
    A key risk faced by a lender when financing assets covered under a floating charge would be:
    • A. 

      Enforcement of the floating charge is very difficult

    • B. 

      Preferential creditors have priority over the deventure holder with regard to assets covered by floating charge.

    • C. 

      Marketability of the assets is a problem

    • D. 

      Assessability of the items covered by the floating charge is a problem.

  • 11. 
    The value of an assets provided as security to the bank may be restricted by transferability of usage.  This would most likely arise under the following situations:
    1. Niche industry's customized equipment
    2. Equipment used by a monopoly
    3. Specifically assembled equipment
    4. Equipment with multiple use
    • A. 

      I and ii

    • B. 

      Ii and iii

    • C. 

      Ii, iii and iv

    • D. 

      I, iii and iv

  • 12. 
    In the case of an equitable assignment, the assignee will only be able take legal action to enforce  his or her rights with the help of the assignor.  To overcome this problem:
    • A. 

      Assignor can provide the assignee with a power of attorney to perfect the assignment

    • B. 

      Borrower can get an acknowledgement from the principle.

    • C. 

      The lender can stamp the agreement for ad valorem

    • D. 

      The lender can establish the assignment by implied conduct

  • 13. 
    In the case of an assignment of book debts, the implication of a debtor giving notice in writing is:
    • A. 

      The assignment passes the legal right to the debt togather with all remedies for non payments to the assignee.

    • B. 

      The bank has no reqourse against the debtor.

    • C. 

      The bank has no recorse against the creditor who has assigned his debts

    • D. 

      None of the above

  • 14. 
    One of the followings statements relating to a pledge is NOT true:
    • A. 

      Pledege means a transfer of chattel or a movable asset.

    • B. 

      In involves only actual delivery

    • C. 

      Possession of the assets is passed to the pledgee

    • D. 

      Legal ownership remains with the pledgor

  • 15. 
    The difference between a banker's lien and an ordinary lien is that:
    • A. 

      Ordinary lien gives power of sale while a banker's lien there is no power of sale

    • B. 

      Banker's lien gives power of sale while an ordinary lien there is no power of sale

    • C. 

      Ordinary lien the assets is with the borrower while for the banker's lien assets is wth the lender

    • D. 

      Banker's lien assets is with the borrower while for a ordinary lien assets is with the borrower

  • 16. 
    The key difference between a pledge and hypothecation is that;
    • A. 

      Unlike a pledge, in the case of hypothecation, the physical possession of the security is not with the lender

    • B. 

      In the case of pledge, physicalpossession is with the borrower, wihle for a hypothecation, physical possession is with the lender.

    • C. 

      In the case of a pledge there is constructive delivery while in the case of a hypothecation there is actual delivery.

    • D. 

      In the case of a pledge there is actual delivery while in the case of hypothecation there is constructive delivery.

  • 17. 
    A general power of attourney is best described by the following statement:
    • A. 

      It limits the power of the attorney to specific acts

    • B. 

      It authorizes the attorney to do virtully all acts and things which the principal can do in person.

    • C. 

      It has no time limit and can only be revoked with the consent of the donor.

    • D. 

      It is for a specified period and can be revoked by the donor unilaterally.

  • 18. 
    In a situation where the power of attorney has been revoked, a lender would be protected from liablity if:
    • A. 

      Teh lender obtained a statutory declaration that the power of attorney is still valid and has acted in good faith

    • B. 

      The lender had ensured that the power of attorey had been stamped

    • C. 

      The lender had ensured that the the official seal of the high court was present on the power of attorney.

    • D. 

      The lender had ensured that the power of attorney was attested by persons authorized by the Power of Attorney Ordinance 1949

  • 19. 
    A power of attorney may be revoked under the following situations:
    1. The donor gives notice of it's revovation
    2. The donee renounces his appointment in writing
    3. There is death or unsoundness of mind of either the donor or donee
    4. The donee is bankrupt
    • A. 

      I and ii

    • B. 

      Ii, iii and iv

    • C. 

      I, ii and iii

    • D. 

      I, iii and iv

  • 20. 
    Under section 52 of the Stamp Act 1949, instruments not duly stamped are:
    • A. 

      Void and cannot be enforced

    • B. 

      Invalid

    • C. 

      Inadmissible in evidence for any purpose

    • D. 

      Not recognized as principle documents

  • 21. 
    The key difference between a principal document and subsidary document under the Stamp Act 1949 is that:
    • A. 

      The principal instrument is stamped at market value while the subsidary instrument is stamped

    • B. 

      The principal instrument is satamped first while subsidary instrument is stamped later

    • C. 

      The principal instrument is stamped for a higher value

    • D. 

      Ad valorem stamp duty is payable on principal instrument while nominal stamp duty is payable on subsidiary instrument

  • 22. 
    Under the Stamp Act 1949, instruments chargable with duty are those specified in:
    • A. 

      First Schedule

    • B. 

      Second Schedule

    • C. 

      Third Schedule

    • D. 

      Fourth Schedule

  • 23. 
    The date for determining the market value of any property being transferred, settled or gifted shall be the:
    • A. 

      The date the transfer was registered

    • B. 

      The date agreement for sale was signed

    • C. 

      The date the instrument was stamped

    • D. 

      The instrument of transfer's execution dated

  • 24. 
    The penalty for late stamping is correct EXCEPT for:
    • A. 

      RM25 or 5% of the amount of deficient duty, whichever sum is greater, if stamped within 1 month after the time for stamping

    • B. 

      RM50 or 10% of the deficient duty, whichever sum is greater, if stamped within 6 months after time for stamping

    • C. 

      RM100 or 20% of the amount of the deficient duty, whichever sum is greater, if stamped after 6 months from the time for stamping

    • D. 

      RM25 or 5% of the amount of deficient duty, whichever sum is greater, if stamped within 3 months after the time for stamping

  • 25. 
    The ad valorem stamp duty payable on principal instruments would be:
    • A. 

      RM10 per thousand

    • B. 

      RM5 per thousand

    • C. 

      RM1 per hundred

    • D. 

      RM3 per thousand

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