M9A Mock Exam 2 CMFAS
- 1.(C1/S1.1) 1. An equity-linked note combines zero-coupon bond with
- A.
an equity
- B.
a swap of an underlying equity asset
- C.
a warrant of an underlying equity asset
- D.
an option of an underlying equity asset
- 2.(C1/S1.1) 2. A 5-year note is linked to BBD Company and has a share price of S$ 100. 80% of the money of the investor is used to buy a zero-coupon with a par value of S$ 100 maturing in 5 years’ time. The remaining S$ 20 is used to buy a call option with a strike price of S$ 110. If the share price drops to S$ 50 on maturity, the investor would
- A.
Receive his capital of S$ 100 but lost S$ 20 on the price paid for the option
- B.
receive his capital of S$ 100
- C.
receive S$ 50
- D.
not receive any money
- 3.(C1/S1.2) 3. Which statement regarding wrappers is FALSE?
- A.
Different wrappers can have different regulatory restrictions on the issuers
- B.
Some wrappers are subject to more specific investment restrictions than others
- C.
Wrappers, regardless of their formats, are subject to the same costs
- D.
None of the above
- 4.(C1/S3.3) 4. A ________ comes with conditional downside protection which depends on a pre-determined barrier.
- A.
Contract for differences
- B.
Bonus certificate
- C.
Discount certificate
- D.
Tracker certificate
- 5.(C1/S1.2/T1.1) 5. Investors of structured deposits
- A.
Are protected against loss of their capital
- B.
get higher returns on their investments
- C.
are unsecured creditors of the issuer in the event liquidation
- D.
are provided with insurance coverage
- 6.(C1/S2.2/Fig1.3) 6. Those investments that carry a low probability of returns while carrying a low probability of loss can be said to be:
- A.
Safe instruments
- B.
Rare gems
- C.
Unworthy investments
- D.
Bold investments
- 7.(C1/S3.3b) 7. When a bonus certificate is knocked-out it means that
- A.
The investor will not be paid anything on maturity
- B.
the investor is paid the principal investment amount and the contract is terminated
- C.
the protection no longer applies and the investor is paid the value of the underlying asset at maturity
- D.
the investor has to top up cash
- 8.(C1/S3.2b) 8. Which of the following products have a cap on their upside potential ?
- A.
Air-bag certificates
- B.
Discount certificates
- C.
Bonus certificates
- D.
Tracker certificates
- 9.(C1/S3.1) 9. Which of the following structured products is designed to protect capital?
- A.
Credit-linked notes
- B.
structured funds
- C.
structured notes
- D.
structured ILPs
- 10.(C1/S2.2/Fig1.3) 10. Investments that offer high return at high risk are called
- A.
Bold investments
- B.
worthy investments
- C.
safe investments
- D.
rare gems
- 11.(C1/S4.4a) 11. Listed products in Singapore are under the oversight of the
- A.
Associated Banks of Singapore
- B.
Singapore Exchange
- C.
Investment Managers of Singapore
- D.
Brokers Association of Singapore
- 12.(C1/S5.1) 12. Which of the following statements is TRUE?
- A.
The market fair value of structured products are not easy to determine
- B.
One of the advantages is that structured products are liquid
- C.
Structured products are generally not as complicated as they are made out to be
- D.
All structured products can be cashed out anytime
- 13.(C2/S4) 13. In 2006, a US$ investment that is denominated in Singapore dollars was issued at the exchange rate of US$ 1 = S$ 1.5336. In 2010, the investment income earned in the foreign currency is US$ 50, but the US$ exchange rate has dropped against the S$ to US$ 1 = S$ 1.2875. The rate of return of the initial investment when converted back to S$ is ______
- A.
lower than that in US$
- B.
higher than that in US$
- C.
the same as that in US$
- D.
not ascertainable
- 14.(C2/S5.2) 14. An investment technique used to increase the potential rate of return is
- A.
Switching
- B.
short selling
- C.
gearing
- D.
forward pricing
- 15.(C2/S5) 15. If the exercise price of an option is S$ 15 and the spot price of a stock is S$ 20, what is the intrinsic value of the option?
- A.
S$ 2
- B.
S$ 5
- C.
S$ 25
- D.
S$ 35
- 16.(C2/S5) 16. The spot price of a particular company’s share is S$ 12. An option to buy it at S$ 8 has an intrinsic value of S$ 4. What is the percentage change in the intrinsic value of the option if the share price rises 10%?
- A.
10%
- B.
12%
- C.
20%
- D.
30%
- 17.(C2/S5.5) 17. A collateral risk occurs when
- A.
The collateral increased in value after it was pledged
- B.
the risk exposure was not adequately collateralised from the start
- C.
the risk exposure is reduced
- D.
the contract has been terminated
- 18.(C2/S6.2) 18. Two securities are perfectly correlated if
- A.
The prices of both move up or down in the same direction, by the same percentage
- B.
the prices of both move up or down in opposite directions, by the same percentage
- C.
the prices move up in the same direction, by different percentages
- D.
the prices of the securities move at random
- 19.(C2/S6.4) 19. The early redemption of units feature in structured products may be triggered when
- A.
The kick-in levels are breached
- B.
the knock-out levels are breached
- C.
callable bonds are called
- D.
all of the above
- 20.(C2/S1) 20. Which of the following is NOT an issuer-specific risk?
- A.
Business risk
- B.
Regulatory action
- C.
Interest rate risk
- D.
Operational risk
- 21.(C3/S1) 21. The value of a derivative contract depends on the value of the underlying assets. These underlying assets could be
- A.
Agricultural products
- B.
currency
- C.
energy
- D.
all of the above
- 22.(C3/S2) 22. Futures contracts have specified
- A.
settlement dates
- B.
delivery price
- C.
quantity
- D.
all of the above
- 23.(C3/S2.2b) 23. In a forward contract, Cost-Insurance-Freight (CIF) means that
- A.
the total cost of the contract including delivery is known to the buyer
- B.
the buyer of the forward contract has to arrange for delivery
- C.
the seller of the forward contract will arrange for delivery
- D.
the seller of the forward contract will pay for the delivery arranged by the buyer
- 24.(C3/S2.5) 24. When the futures price is higher than the spot price, the situation is called a
- A.
Backwardation
- B.
contango
- C.
mark to market
- D.
kick-in
- 25.(C3/S2.5) 25. If the futures price of a commodity in March is S$ 3.00 and its spot price is S$ 2.70, the basis is said to be
- A.
30 cents on par
- B.
30 cents over March
- C.
30 cents under March
- D.
15 cents on average
Questions: 50 | Attempts: 4208 | Last updated: Jan 11, 2021
-
Sample QuestionC1 / S1 / Pg2) 1. Which of the following investment assets is the usual make-up of structured products?
Questions: 50 | Attempts: 1821 | Last updated: May 24, 2017
-
Sample Question(C1/S1.1) 1. An equity-linked note combines zero-coupon bond with
Questions: 50 | Attempts: 1019 | Last updated: May 24, 2017
-
Sample Question(C2/S5.4) 1 One of the ways to reduce concentration risk is __________.
Back to top