Structured Products Quiz Questions

50 Questions | Total Attempts: 66

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Structured Product Quizzes & Trivia

Questions and Answers
  • 1. 
    1 Which of the following is a similarity between structured product, bond & option?
    • A. 

      The principal is guaranteed.

    • B. 

      Provide stability in returns.

    • C. 

      They have fixed maturity dates.

    • D. 

      They have upside participation.

  • 2. 
    2. Which of the following most describe a structured fund?
    • A. 

      It is only distributed by the bank channel.

    • B. 

      The main disclosure document is the factsheet.

    • C. 

      It has low administration cost.

    • D. 

      It has a trust structure.

  • 3. 
    3. Which of the following is the PRIMARY RISK relating to the return component of a structured product?
    • A. 

      Market Risk

    • B. 

      Interest Rate Risk

    • C. 

      Counterparty Risk

    • D. 

      Liquidity Risk

  • 4. 
    4. Which of the following best describe Bonus Certificate and Airbag Certificate?
    • A. 

      Bonus certificate may be knocked-out only at maturity.

    • B. 

      Bonus certificate's investor bears full downside of the underlying asset.

    • C. 

      Airbag certificate has limited upside potential.

    • D. 

      Airbag certificate was created to reduce the impact of price decline.

  • 5. 
    5. Which of the following applies to a structured ILP fund?
    • A. 

      Banking Act

    • B. 

      Company Act

    • C. 

      Deposit Insurance Act

    • D. 

      Code on Collective Investment Scheme

  • 6. 
    6. Which of the following cannot be use to mitigate liquid risk of a portfolio bond?
    • A. 

      Invest in publicly traded products.

    • B. 

      Invest in shares with high trading volume.

    • C. 

      Ask counterparty for margin.

    • D. 

      Invest in shares that are high in demand.

  • 7. 
    7. When institution has insufficient cash to meet it cash flow obligations, the institution has problem with its
    • A. 

      Liquidity

    • B. 

      Credit worthiness

    • C. 

      Interest rate

    • D. 

      Structure

  • 8. 
    8. Which of the following cannot be use to mitigate counterparty risk of a portfolio bond?
    • A. 

      Invest in publicly traded derivative products.

    • B. 

      Go into private negotiation with counterparty for collaterals

    • C. 

      Invest via the subsidiaries of the counterparty

    • D. 

      All of the above.

  • 9. 
    9. The additional amount required to restore the account is called...
    • A. 

      Initial Margin

    • B. 

      Margin Call

    • C. 

      Variation Margin

    • D. 

      Maintenance Margin

  • 10. 
    10. There are 2 main types of market participants in the future market — hedgers and speculators. For the hedgers, their objective is...
    • A. 

      To profit from the rising prices.

    • B. 

      To profit from the falling prices.

    • C. 

      Achieve protection against unfavourable price changes.

    • D. 

      All of the above.

  • 11. 
    11. Which of the following describe a non-standardised contract?
    • A. 

      Forward contract traded over the counter

    • B. 

      Commodity future contracts

    • C. 

      Financial future contracts

    • D. 

      All of the above.

  • 12. 
    12. The strike price of the put option is $10. The market price is $15. The intrinsic value of the put option is...
    • A. 

      In-the-money

    • B. 

      At-the-money

    • C. 

      Out-of-the-money

    • D. 

      Under-the-money

  • 13. 
    13. John long a put option, he is..
    • A. 

      Bullish about the market.

    • B. 

      bearish about the market.

    • C. 

      neutral about the market.

    • D. 

      intending to hold the stock.

  • 14. 
    14. The following statements are true for call option:
    • A. 

      The seller of call option pays the premium.

    • B. 

      The holder of call option has the right to buy.

    • C. 

      The buyer of the call option has unlimited downside.

    • D. 

      The seller decides on the exercise price.

  • 15. 
    • 15. A swap will not result in the change in
    • A. 

      Cash flow

    • B. 

      Ownership

    • C. 

      Level of risk

    • D. 

      Credit risk

  • 16. 
    16. A 5-year structured ILP has the following features: 1. Death Benefit = 102% of initial investment 2. Maturity Benefit = 100% of initial investment 3. Maturity Payout = 20% if the 3 of the stock as listed went up by 10% from the initial stock price The product is likely to comprise of:
    • A. 

      Bond + Insurance

    • B. 

      Fixed deposit + Insurance

    • C. 

      Bond + Derivative + Insurance

    • D. 

      Equity + Bond + Insurance

  • 17. 
    17. Which of the following best described price which units of portfolio bond are subscribed?
    • A. 

      Forward pricing

    • B. 

      Offer price

    • C. 

      Bid price

    • D. 

      Historic pricing

  • 18. 
    18. John invest in a US$ structured product issue by Bank A with a credit rating of AA. The fund size is US$8mil. John is concern about getting his money when he needs, he is most concern about which of the risk?
    • A. 

      Foreign exchange risk

    • B. 

      Interest rate risk

    • C. 

      Liquidity risk

    • D. 

      Credit risk

  • 19. 
    19. Which of the following applies to portfolio rebalancing?
    • A. 

      It can only be performed by fund managers.

    • B. 

      It can be done in portfolio bond.

    • C. 

      It can only be done on a quarterly basis.

    • D. 

      The desired level of performance is not adversely affected

  • 20. 
    20. Which of the following has the least impact on the price of the derivatives?
    • A. 

      The current spot price of the underlying asset.

    • B. 

      The number of investor for the underlying asset.

    • C. 

      The market demand for the underlying asset.

    • D. 

      The volatility of the underlying asset.

  • 21. 
    21. The coefficient of correlation of 2 securities that are not correlated is
    • A. 

      . +0.5

    • B. 

      0

    • C. 

      -0.5

    • D. 

      1

  • 22. 
    22. Hoi Seng is thinking about investing in stocks but he is not expecting the market to move much in either direction. What strategy should he adopt?
    • A. 

      Bull straddle

    • B. 

      Bear straddle

    • C. 

      Long put

    • D. 

      Long call

  • 23. 
    23. Which of these least describe an issuer-specific risk?
    • A. 

      Internal operation of Company A

    • B. 

      Regulatory impact on the industry which Company B is in

    • C. 

      Down grade in credit rating of Company C

    • D. 

      Exchange rate of the securities in which Company D is traded in

  • 24. 
    24. Which will track the opposite direction of an index?
    • A. 

      Bonds

    • B. 

      Derivatives

    • C. 

      Fixed Income instruments

    • D. 

      D Warrants

  • 25. 
    25. Which is true about Structure ILP's death benefit?
    • A. 

      Death benefit is the same amount as the single premium invested

    • B. 

      Death benefit is more than the single premium invested

    • C. 

      Death benefit is lower than the single premium invested

    • D. 

      Death benefit is capped at 110% of the single premium invested

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