Unit Trust Quiz 3 - Advance
Hi there!
You have reached the final of 3 levels of Quizzes. This level is deemed tougher than the other prior Quiz 1 and Quiz 2 but it is not as tough as to accept fate of losing money in unit trust scheme due to ignorance. So, do summon all your intelligence and knowledge you have into answering these questions. Good luck!
- 1.
Why is the 'Dollar cost average' concept so important in unit trust investment scheme?
- A.
It minimizes lost by eliminating the systematic risk inherent in the funds.
- B.
It averages out the return which is anticipated from buying more than one fund
- C.
It reduces the holding cost of the funds, thus increasing potential of higher return during a bull market.
- D.
It increases the number of units in hand, thus decreases the potential of loses.
Correct Answer
C. It reduces the holding cost of the funds, thus increasing potential of higher return during a bull market. -
- 2.
You invested RM 50000 to buy Fund XYZ at 25 sen a unit on March 1,2012. During growth in market, the fund price moves up to 27sen on March 28,2012. You again buy this fund with an investment of RM20000. What is the per unit holding cost before and after March 28,2012.(Assuming there is no sales charges and redeemption of units)
- A.
Before: RM 0.2500 a unit / After: RM 0.2504 a unit
- B.
Before: RM 0.2600 a unit / After: RM 0.2700 a unit
- C.
Before: RM 0.2500 a unit / After: RM 0.2554 a unit
- D.
Before: RM 0.2600 a unit / After: RM 0.5200 a unit
Correct Answer
C. Before: RM 0.2500 a unit / After: RM 0.2554 a unit -
- 3.
From question 2, if the price on March 31,2012 is RM 0.2900 a unit and you redeem all units. How much money will you receive? (Assuming there is no tax)
- A.
RM 79481.48
- B.
RM 21481.48
- C.
RM 58000.00
- D.
RM 75451.28
Correct Answer
A. RM 79481.48 -
- 4.
The statement ' Regular topping up investment during market down promises low holding cost'. This is true because when the holding cost is low, the variance between it and the selling price when the market moves up is hugh. However, timing of market is quite impossible. How do you view this with respect of reaping high return?
- A.
I stop topping up during market up and continue top-up during market low.
- B.
I continue topping up on monthly basis irrespective of market condition.
- C.
If my holding cost is lower than current NAV fund price, i stop top-up, but if holding cost is higher than NAV, i continue top-up.
- D.
I stop topping up of funds and wait for the right time to sell.
Correct Answer
B. I continue topping up on monthly basis irrespective of market condition. -
- 5.
Mr. Thaksin has RM 120000 in his account 1 of his EPF savings and RM 80000 in account 2. According to the EPF rule, Thaksin has to keep basic savings of RM 60000 and anything excess of this can be invested in approved unit trust funds. Exactly, how much can he invest in unit trust scheme and how frequent can he do so?
- A.
RM 4000 every 3 calendar months.
- B.
RM 40000 every calendar month.
- C.
RM 12000 every 3 calendar months.
- D.
RM 60000 every other calendar month.
Correct Answer
C. RM 12000 every 3 calendar months. -
- 6.
When your return in unit trust investment sways farther from your aim, switching strategy is applied. Switching strategy cost money, therefore it should be used carefully to avoid depletion of income. Which of the statement below is true?
- A.
Switching is part of re-balancing method and should be practiced every time the return deviates from the target.
- B.
When return is rising rapidly above target, switch some equities fund into bond to lock in the gain.
- C.
Don't do switching while return is skyrocketing.The higher it goes, the more return we can get.
- D.
Switching in funds accepted by the EPF is exempted from any fees.
Correct Answer
B. When return is rising rapidly above target, switch some equities fund into bond to lock in the gain. -
- 7.
In your first year of unit trust investment, there is no positive return therefore you cannot achieve your aim. In your second year, if distribution is declared and re-invested, your units now increase. Subsequently, every year your units will increase as distribution is declared and re-invested. If you don't make any new top-up or redemption, your units will expand,irrespective of market condition. Investors practice this regular top-up because of the units expansion. However, throughout your holding period of the units, the cost per unit remain the same. It never changes eventhough the number of units expanded due to distribution declared and re-invested. True or false?
- A.
True
- B.
False
Correct Answer
A. True -
- 8.
Usually saving rate in the Fixed Deposit scheme in financial institutions is 3.10% per annum. The published inflation rate is about 4.00%. Would you still put all your savings in that Fixed Deposit account? Which of the below answers best suit the Investment's best practice?
- A.
I will continue to keep all in the same Fixed Deposit as the return is stable.
- B.
No, i will transfer all as the net income is -0.90%. I will keep in my saving's account.
- C.
Since the net return is negative, i will transfer all to other investment products that produces return more than 4.00%
- D.
I will withdraw from Fixed Deposit and i will invest in investmetn products that gives me return more than the inflation rate and covers my other long term saving rate.
Correct Answer
D. I will withdraw from Fixed Deposit and i will invest in investmetn products that gives me return more than the inflation rate and covers my other long term saving rate. -
- 9.
Your financial planner have told you that you have a shortfall of retirement fund and that you need to save now in an investment fund that can give you 9.50% return per annum. Anything lower than this would not be able to meet your retirement fund upon your retirement age 20 years from now. Which of this investment instrument would you choose to invest ?
- A.
Fixed Deposit account
- B.
Property,especially buy-sell houses.
- C.
Share market
- D.
Unit trust scheme
Correct Answer
D. Unit trust scheme -
- 10.
Your Unit trust consultant have told you that your risk tolerance profile is an aggressive type. This should match with the type of funds your consultant picked for you. Which one of the below best describes the funds chosen for an aggressive type investors?
- A.
50% of Bond and 50% of Balanced funds
- B.
20% of Bond and 80% of Equity funds
- C.
80% of Balanced funds and 20% of Equity type funds
- D.
100% exposure in Equity funds.
Correct Answer
D. 100% exposure in Equity funds. -
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Current Version
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May 18, 2022Quiz Edited by
ProProfs Editorial Team -
Mar 29, 2012Quiz Created by
Vjdevan
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