6. Which of the following is not a closed-ended investment vehicle?
An ETF investing in India
An exchange traded fund investing in North American/Canadian Commodities Markets
A UCITS fund investing in North American/ Canadian Commodities company
An investment trust investing in oil and gas companies
7. In which of the following documents will you, as a prospective investor in a fund, typically see details of any leverage or borrowing that the fund might use?
Investment advisory agreement
Offering memorandum
Custodian Agreement
Subscription Agreement
8. What is a 'close ended' fund?
A fund where new shares are created when new money is invested
A fund that has closed or fixed number of shares that vary
A fund that has a fixed number of shares which remains constant
e.g. unit trust or OEIC
9. A pairs trading strategy is one in which a fund will seek...?
Highly correlated stocks that are temporarily diverging in price
Highly correlated stocks with prices moving in tandem
Low correlated stocks with prices moving in tandem
Low correlated stocks temporarily diverging in price
10. What is an 'open ended' fund?
e.g. unit trust or OEC where the funds are active
e.g. unit trust or EIC where the funds follow an index such as FTSE 100
e.g. unit trust or OEIC where new shares are created when new money is invested while existing shares are cancelled when money is disinvested
e.g. unit trust or OEIC where their is a fixed number of shares which remain constant
11. What is the difference in terms of role for a custodian and a prime broker?
Prime broker safe-keeps the funds's cash/assets while the custodian acts as a bank that services the funds dealing in shares etc
A custodian facilitates trades that the fund enters into while the prime broker acts as a bank
Custodian safe-keeps the funds's cash/assets while the prime broker acts as a bank that services the funds dealing in shares etc
There is not much difference, they both safe-keep
12. What is the purpose of a prospectus?
To protect the fund manager
To protect the investors
To protect both the investors and the fund manager
13. What us a close-ended investment fund?
collective investment model based on issuing a fixed number of shares which are redeemable from the fund
collective investment model based on issuing a constant number of trusts which are not redeemable from the fund
collective investment model based on issuing a fixed number of shares which are not redeemable from the fund
collective investment model based on issuing a constant number of shares which are not redeemable from the fund
14. A passive investment fund is one which...
Holds only cash
Asset allocation and stock selection is set by its investment manager
Tracks a particular investment index
Invests directly into the markets
15. Funds are usually classified by...
Their structure, their strategy and their value
Their size, their value, and their type
Their structure, their strategy and their type
Their value, their strategy and their type
16. An investor looking to ensure a fund has a good track record of compliance with regulatory rules is likely to look for...
A suitably qualified Chief Legal Officer
A suitably qualified Chief Executive Officer
A suitably qualified Chief Compliance Officer
A suitably qualified Chief Finance Officer
17. Which of the following scenarios is likely to be considered by a potential investor in a fund as representing the best compliance practice?
The fund has a COO, good systems and compliance policies
The fund has an experienced senior team consisting of the CEO, COO and CCO
The fund has a CCO, good systems and a comprehensive compliance manual
The fund has a COO, a comprehensive compliance manual and compliance policies
18. What is a fund?
A 'pool of money' that is managed by both the investors and the manager with the goal of increasing the value of the fund
A 'pool of money' that is managed by the investors with the goal of increasing in value
A 'pool of money' that is managed by a manager with the goal of increasing in value
A type of fund whereby there is there is little diversification
19. Which of the following not considered to be an example of capital structure arbitrage trade?
Purchase of Nike senior secure debt, and sale of Adidas secured debt
Purchase of Shell senior secured debt and sale of Shell junior secured debt
Sale of ford holding company equity, and purchase of Ford subsidiary convertible stock
Purchase of junior Sony debt and sale of senior Sony debt
20. Alternative funds have traditionally levied on investors a fee structure comprising of?
