M9A Structured Questions

79 Questions | By Jensen1980 | Updated: Mar 18, 2022 | Attempts: 288

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1.

Structured products are ________ of the issuer
- A.
  
  Unsecured debt securities
- B.
  
  Financial derivativies
- C.
  
  Fixed income instruments
- D.
  
  Equity - like products
2.

A structured product is a combination of
- A.
  
  Bond and a financial derivative
- B.
  
  Bond and an option
- C.
  
  Note and option
- D.
  
  All of the above
3.

In order to mitigate the credit risk of the fixed income instrument used in structured products, the issuer of the structured product may choose to
- A.
  
  Provid a guarantee by itself
- B.
  
  Provid a guarantee by third party
- C.
  
  Provide a guarantee by itself or a third party
- D.
  
  Use a fixed income issuer with better credit rating than itself
4.

One of the few structured products that may have no expiry date is
- A.
  
  Tracker certificate
- B.
  
  Bonus certificate
- C.
  
  Discount certificate
- D.
  
  Airbag certificate
5.

A __________ structured product means that it is linked to a certain basket of market indices.
- A.
  
  Interest rate-linked
- B.
  
  Equity-linked
- C.
  
  Credit-linked
- D.
  
  Market-linked
6.

A _______ product works like a term insurance plus a structured fund, where the term insurance provides insurance coverage and the other potion provides investment returns.
- A.
  
  A structured note
- B.
  
  A structured fund
- C.
  
  A structured ILP
- D.
  
  A structured deposit
7.

________ are also known as portfolio of investments with an insurance element
- A.
  
  Mutual funds
- B.
  
  Structured funds
- C.
  
  Bond funds
- D.
  
  Portfolio funds
8.

A structured ILP with valuation done ________ will pose a higher liquidity risk for investors
- A.
  
  Daily
- B.
  
  Every 2 weeks
- C.
  
  Monthly
- D.
  
  Quarterly
9.

The fund seeks daily investments results, before fees and expenses that correspond to twice the inverse of the daily performance of the market benchmark index. This best describles an
- A.
  
  ILP providing regular payments
- B.
  
  ILP linked to index returns
- C.
  
  ILP with capital appreciation potential
- D.
  
  ILP with term insurance component
10.

Which of the following is not a drawback of investing in structured ILP?
- A.
  
  A structured ILP has several layers of expenses like front -end charge, bid offer spread and cost of death benefit
- B.
  
  Extra layer of fees and expenses are incurred when insurer choose to invest in specially investment areas managed by external unit trusts
- C.
  
  It takes time for structured ILPs investment performance to make up for expenses charged
- D.
  
  Diversification of the fund minimizes the opportunity cost
11.

Which of the following statements is incorrect?
- A.
  
  Returns for structured deposits are generally lower due to cost of providing return of capital
- B.
  
  Design for structured funds are affected by investment restrictions
- C.
  
  Investors of structured notes are secured creditors of the issuer in the event of liquidation
- D.
  
  There is a wide and ready distribution network for structured ILPs
12.

Which of the following investors is not suitable to invest in structured ILPs?
- A.
  
  Jane has a medium to high tolerance to loss of capital and aims for capital appreciation.
- B.
  
  Tommy is interested to invest in hedge funds although he has little knowledge to invest in such niche area on his own
- C.
  
  Mary does not fully understand the risk and return trade of the product
- D.
  
  James buys a structured vILPv following the adfvice from his financail adviser.
13.

Which of the following is not considered a reason for investing in structured products?
- A.
  
  It is used as part of the asset allocation process to reduce risk exposure of a portfolio
- B.
  
  Structured products may suit investors particular investment needs.
- C.
  
  Structured products are used as an alternative to a direct investment in traditional asset classes.
- D.
  
  Structured products offer no access to exotic asset classes.
14.

The defination of structured note Is
- A.
  
  An intermediate term debt security whose interest payments are determined by a formula tied to a movement of a stock, commodity or currency.
- B.
  
  A structured product that is linked to certain market indices
- C.
  
  An investment instrument that combines the characteristic of a zero-coupon bond with a return component
- D.
  
  Structured as a security with an embedded credit default swap
15.

Structured products are dependent on their underlying assets, which are subjected to ________ risks.
- A.
  
  Counterparty risk
- B.
  
  Liquidity risk
- C.
  
  Market risk
- D.
  
  All of the above
16.

Why should a person choose to invest in structured products?
- A.
  
  Structured products can be issued quickly that enable investor to swiftly respond to market trends
- B.
  
  Structured products can be used as part of the asset allocation process to reduce price volatitly of a portfolio
- C.
  
  Structured products are extremely versatile instruments to deliver specific risk/return profile to suit the investors needs
- D.
  
  Structured products can replicate the performance of market that is closed to foreign investors
17.

Insurers who market structured products are subject to the following regulatory framework except the
- A.
  
  Futures act
- B.
  
  Insurance act
- C.
  
  Financial advisory act
- D.
  
  CIS code
18.

Below are the deails of a new structured investment linked life insurance policy being introduced: 1) insurer and guarantor = Company XYZ 2) Credit rating = C 3) Currency Used = SGD 4) Tenure = 2 years 4) Maturity = 100 % of initial amount of single premiun 5) Payout = 7 % of initial amount of single premiun per annum. What risk does an investor face when investing in this ILP?
- A.
  
  Currency risk
- B.
  
  Credit risk
- C.
  
  Liquidity risk
- D.
  
  Market risk
19.

Structured products are for investors who:
- A.
  
  Have knowledge of investment
- B.
  
  Want a customized product to suit their specific risk return profile
- C.
  
  Want a share of the issuers profit
- D.
  
  Have a demand for high market volatitily
20.

How often does the MAS 307 require the structured investment- linked policy sub-funds to be valued?
- A.
  
  Daily
- B.
  
  Weekly
- C.
  
  Monthly
- D.
  
  Yearly
21.

Which of the statements about structured deposits is/are true?
- A.
  
  They are issued by banks
- B.
  
  They are a form of wrapper
- C.
  
  They offer loer returns than most other structured products
- D.
  
  All of the above
22.

In order to inform the client of the inherent risk and key features of the structured investments linked life policy sub funds, the adviser should provide;
- A.
  
  Product summary sheet
- B.
  
  Benefit illustration
- C.
  
  Product highlight sheet
- D.
  
  Fund report
23.

Complete the sentence. Structured deposits :
- A.
  
  Are capable of generating high returns
- B.
  
  Are a form of investment products
- C.
  
  Are covered by deposit insurance scheme
- D.
  
  Generally have their capital guaranteed by an insurance company.
24.

Compared to an ILP, a structured ILP
- A.
  
  Has a more complex structure
- B.
  
  Has a higher insurance element
- C.
  
  Is not as heavily regulated
- D.
  
  Is less risky
25.

The advantages of investing in a structured ILP may include the following, EXCEPT
- A.
  
  Portfolio diversification
- B.
  
  Access to bulky investments
- C.
  
  Economies of scale
- D.
  
  Low fees and charges