Unit Trust Quiz 1 Beginners Level

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| By Vjdevan
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Quizzes Created: 2 | Total Attempts: 2,252
Questions: 10 | Attempts: 1,507

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Unit Trust Quiz 1 Beginners Level - Quiz

Here are some simple questions on unit trust investment. Test your knowledge and find out how you fare yourself.
There are 10 questions and each carry 10 points. If you do better here, please go to Quiz 2 Intermediate level and
subsequently to Quiz 3 Advance level. If you don't find Quiz 2 and 3 probably they are under construction by me.
Questions are centred around Malaysian context, however non-malaysians are welcome to try their knowledge.


Questions and Answers
  • 1. 

    What is Unit Trust?

    • A.

      A trust signed between you and the Unit trust company.

    • B.

      Shares traded on the local market.

    • C.

      Units comprises of various securities traded in local or overseas trading house.

    Correct Answer
    C. Units comprises of various securities traded in local or overseas trading house.
    Explanation
    The correct answer is "Units comprises of various securities traded in local or overseas trading house." This means that a unit trust is made up of different securities that are bought and sold in either the local or overseas trading market. This explanation clarifies that a unit trust is not a trust agreement between an individual and a unit trust company, nor does it involve shares traded on the local market.

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  • 2. 

    Is Unit Trust investment regulated by Bank Negara of Malaysia?

    • A.

      Yes

    • B.

      No

    • C.

      Both Bank Negara and Security Commission are regulators in Malaysia.

    Correct Answer
    B. No
    Explanation
    The correct answer is "No" because while Bank Negara of Malaysia is a regulator in Malaysia, it does not regulate Unit Trust investments. The regulation of Unit Trust investments in Malaysia is done by the Securities Commission. Therefore, both Bank Negara and the Securities Commission are regulators in Malaysia, but Bank Negara does not regulate Unit Trust investments.

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  • 3. 

    Unit Trust investment is for short term period only (1 to 2 years). True or False?

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because Unit Trust investment is not limited to a short term period of 1 to 2 years. Unit Trusts are a type of collective investment scheme that pool funds from multiple investors to invest in a diversified portfolio of assets. The investment period for Unit Trusts can vary depending on the investor's objectives and the specific fund they invest in. Some Unit Trusts may have a short term focus, while others may be designed for longer term investment goals. Therefore, the statement is incorrect.

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  • 4. 

    Choose which one of the below answers reflects well of Unit Trust Investment.

    • A.

      It is an investment that promises future financial freedom.

    • B.

      It is an investment that promises the possiblity to become rich in future.

    • C.

      It is an investment that has lower risk than fixed deposit account.

    • D.

      It is an investment that does not provide unit split.

    Correct Answer
    A. It is an investment that promises future financial freedom.
    Explanation
    The correct answer suggests that Unit Trust Investment promises future financial freedom. This implies that investing in Unit Trust can potentially lead to a secure financial future and provide individuals with the means to achieve their financial goals and independence.

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  • 5. 

    Unit trust funds provides us 3 types of income,i.e Capital gain, Dividend and Unit split.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Unit trust funds do indeed provide three types of income: capital gain, dividend, and unit split. Capital gain refers to the increase in the value of the units held in the fund, which can be realized when the units are sold. Dividends are payments made by the fund to its unit holders from the income generated by the underlying investments. Unit split occurs when the fund decides to increase the number of units held by each unit holder without affecting the total value of their investment. Therefore, the statement is true.

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  • 6. 

    Money that you make in Unit trust investment is guaranteed by the unit trust company.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because the money you make in Unit trust investment is not guaranteed by the unit trust company. Unit trusts are investment funds that pool money from multiple investors and invest in a diversified portfolio of assets. The value of the investment can fluctuate based on market conditions and the performance of the underlying assets. There is no guarantee of returns, and investors bear the risk of potential losses.

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  • 7. 

    What is the minimum money you can invest in any one fund if you are buying fot the first time.

    • A.

      RM 100

    • B.

      RM 500

    • C.

      RM 1000

    • D.

      Any amount is accepted

    Correct Answer
    C. RM 1000
    Explanation
    The minimum amount of money that can be invested in any one fund when buying for the first time is RM 1000. This means that if someone wants to invest in a fund, they must invest at least RM 1000.

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  • 8. 

    As in any other legal savings scheme, money in Unit trust investment is guaranteed by the PIDM (Perbadanan Insurans Deposit Malaysia).

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because money in a Unit trust investment is not guaranteed by the PIDM (Perbadanan Insurans Deposit Malaysia). The PIDM only guarantees deposits in banks and Islamic banks in Malaysia. Unit trusts are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of assets, such as stocks, bonds, and other securities. The returns on unit trusts are subject to market risks and are not guaranteed.

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  • 9. 

    Which of the below is true?

    • A.

      I can invest using cash money.

    • B.

      I can withdraw from EPF to invest in unit trust funds.

    • C.

      Both the above are correct

    • D.

      Withdrawal from EPF is not allowed at all for this purpose.

    Correct Answer
    C. Both the above are correct
    Explanation
    Both statements are correct. The first statement states that one can invest using cash money, which is generally true as cash is a common form of investment. The second statement states that one can withdraw from EPF (Employees Provident Fund) to invest in unit trust funds, which is also true as EPF allows for partial withdrawals for investment purposes. Therefore, both statements are accurate.

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  • 10. 

    I need to pay tax for all the profit i made out of unit trust investment.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because tax on profit from unit trust investments is not applicable in all countries. The tax laws and regulations vary from country to country, and in some cases, the profit from unit trust investments may be exempt from taxes or may be subject to different tax rates. Therefore, it cannot be generalized that tax needs to be paid for all profits made from unit trust investments.

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