Unit Trust Quiz 2 - Intermediate Level

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| By Vjdevan
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Vjdevan
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Quizzes Created: 2 | Total Attempts: 2,326
| Attempts: 753 | Questions: 10
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1. By investing in more unit trust funds of different risks exposure, i am able to optimize total return.

Explanation

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.

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About This Quiz
Unit Trust Quiz 2 - Intermediate Level - Quiz

Hi there!
I hope you have tried your hand on the Level 1 quiz. How did you do? You are in here because you have performed better in answering questions in Quiz 1. Quiz 2 questions are a bit tough but not impossible to answer.
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2. The total value of a particular fund's unit for the day, divide by the number of units in circulation is called fund's closing price. What is the real term used in everyday practice in the field?

Explanation

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.

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3. Dividend distribution in unit trust investment in Malaysia is not taxed in unitholder's hand.

Explanation

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.

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4. Equity type unit trust funds has volatility that matches with the bond type funds.

Explanation

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.

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5. What will be the net investment (less sales charge) from question 6 above?

Explanation

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.

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6. Upfront fees is charged to all new funds. What is the name given to this fees?

Explanation

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.

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7. Trustees fees and Management fees are charged to Unit trust company and not to the unitholders account.

Explanation

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.

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8. If i would like to sell a certain fund now, and the fund's NAV as yesterday's closing was RM 1.0105. I bought this fund at RM 1.0000 a few years ago. My selling price now is RM 1.0105. True or False?

Explanation

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.

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9. Mr. Obama bought unit trust fund B. He paid RM 80000 to you (assume you are his unit trust consultant). You told him the sales charge is 5.50% and the closing NAV is RM 0.2500 a unit. Calculate how many units Mr. Obama get? (NAV = Net asset value)

Explanation

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.

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10. If i invest RM 50000 in Fund A that charges 5.50% sales fee. Calculate how much my sales fee is in RM?

Explanation

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.

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By investing in more unit trust funds of different risks exposure, i...
The total value of a particular fund's unit for the...
Dividend distribution in unit trust investment in Malaysia is not...
Equity type unit trust funds has volatility that matches with the...
What will be the net investment (less sales charge) from question 6...
Upfront fees is charged to all new funds. What is the name given to...
Trustees fees and Management fees are charged to Unit trust company...
If i would like to sell a certain fund now, and the fund's NAV as...
Mr. Obama bought unit trust fund B. He paid RM 80000 to you (assume...
If i invest RM 50000 in Fund A that charges 5.50% sales fee. Calculate...
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