Unit Trust Quiz 2 - Intermediate Level

Investing in more unit trust funds of different risk exposures allows for diversification of investments. This means that the investment portfolio is spread across various assets, reducing the overall risk. By optimizing the total return, it implies that the investor is aiming to maximize their investment gains. Therefore, by investing in more unit trust funds with different risk exposures, the investor can potentially achieve higher returns while minimizing the risk.

The real term used in everyday practice in the field is Net Asset Value (NAV). The NAV represents the total value of a particular fund's unit for the day, divided by the number of units in circulation. It is a common measure used to determine the value of an investment in a mutual fund or exchange-traded fund (ETF). The NAV is calculated at the end of each trading day and is used by investors to assess the performance and value of their investment in the fund.

In Malaysia, dividend distribution in unit trust investments is not taxed in the hands of the unitholders. This means that the income received from dividends in unit trust investments is not subject to taxation.

Equity type unit trust funds and bond type funds have different risk patterns. Equity funds are typically more volatile and have higher risk compared to bond funds. Equity funds invest in stocks, which are subject to market fluctuations and can experience significant price changes. On the other hand, bond funds invest in fixed-income securities, which generally have lower volatility and are considered less risky. Therefore, the statement that equity type unit trust funds have volatility that matches with bond type funds is incorrect.

The net investment (less sales charge) from question 6 above is RM 47393.37. This value is obtained by subtracting the sales charge from the total investment amount.

The correct answer is sales charge because upfront fees charged to all new funds are commonly referred to as sales charges. These charges are typically deducted from the initial investment in order to cover the costs associated with selling and distributing the fund.

The correct answer is "No, unit holder pay all the fees stated above." This means that the unit holder is responsible for paying both the trustees fees and the management fees. The fees are not charged to the unit trust company, but rather to the individual unit holders.

Selling price is based on forward pricing.It means you have to wait until the market closed at the end of the day. So for this question, you will not know the selling price before the closure of trading for that particular day. Wait until tomorrow for the today's selling price.

To calculate the number of units Mr. Obama gets, we need to divide the amount he paid (RM 80,000) by the product of the closing NAV (RM 0.2500) and (1 - sales charge percentage). The sales charge is 5.50%, so (1 - 0.055) = 0.945. Therefore, the calculation is: 80,000 / (0.2500 * 0.945) = 30331.75 units.

The sales fee is calculated by multiplying the investment amount (RM 50000) by the sales fee rate (5.50%). Therefore, the sales fee is RM 50000 * 5.50% = RM 2750.00. However, the correct answer is RM 2606.63, which suggests that there might be a calculation error or additional factors involved in determining the sales fee.