Are you familiar with CMF AS M9A, and would you be interested in taking this quiz? This statement may sound like gibberish, but it has to do with life insurance and investment-linked policies. This insurance is intended for those who need to comply with MAS requirements. Collective investment schemes are to test people on their knowledge and understanding of structured products' criteria. If you want to learn more, this is the quiz for you.
equities and bonds
Bonds and options
Bonds and notes
derivatives
These are unsecured debt securities of the issuer
They are equity securities
He payouts of the structured products may be based on equity price movements
They are also known as hybrid products
Structured deposits have low risks
Structured deposits are issued only by banks
Structured deposits are excluded in the Deposit Insurance Scheme in Singapore
Structured notes are unsecured debentures
They have limited downside protection
They have unlimited downside protection
They have capital protection
There is a cap on the upside return
Kick-in
Kick-out
Knock-in
Knock-out
Structured notes can be listed and traded on the Singapore Exchange (SGX)
All structured products are liquid
All listed structured products on SGX come under the generic umbrella of Exchange- Traded Funds
SGX requires that listed structured products have at least 75% of the securities spread out to a minimum of 100 investors for Exchange-Traded Notes and Certificates
older bonds that are near maturity
Rated lower than subordinated bonds by rating agencies
Given priority over shares and subordinated bonds during liquidation
also known as junk bonds
When the interest rate drops, the issuer is likely to exercise his right to ‘call’
Callable securities are more expensive than non-callable securities
The price of a callable bond is the price of a straight bond, plus the price of a call option
The call price is typically lower than the par value
Are typically outsourced by the issuer for their structuring
Are issued only by banks
Have higher administrative costs
Are distributed by a wide distribution network
Bold investments
Unworthy investments
Safe investments
rare gems
the ease of converting his investments into cash
being in a situation where he lacks cash and may not be able to stay invested
Price volatility
profit margin
Business risk
economic conditions
Foreign exchange risk
all of the above
liquidity risk
issuer-specific risk
Structural risk
interest rate risk
0
+1
-1
Between 0 and -1
the price movements of the underlying assets
the credit worthiness of the counterparty
foreign exchange movements
all of the above
Use of payment netting
Requiring the counterparty to put up collaterals
Using publicly traded derivative products
All of the above
Leveraging is used to decrease the risk exposure
One technique of leveraging is margin trading
In margin trading, the investor is borrowing from the broker to invest
Interest is charged on margin accounts
The decrease in market value of the collateral
the issuer of notes not receiving any payments because the notes counterparty defaulted
The issuer becomes insolvent
All of the above
Cash delivery
physical delivery
contract delivery
credit delivery
Kick-in
Backwardation
Contango
book-out
Loading
Cost of carry
Difference between the highest and lowest price for a given period
the average price for a given period
S$ 400
S$ 600
S$ 800
S$0
He puts money where he can make a profit from anticipated price change
He provides market liquidity
He buys or sells in the futures market to lock in the price to protect against movement in prices
He buys low and sells high
The portfolio holdings will increase by 1.1%
the portfolio holdings will increase by 1 %
the portfolio holdings will decrease by 1 %
the portfolio holdings will decrease by 1.2 %
A ‘put’ option gives the holder the right to buy
A ‘call’ option gives the holder the right to sell
An option has no maturity date
A holder of an option can choose not to exercise his contractual rights
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Here's an interesting quiz for you.