FCA Sample Exam

FCA Sample Exam When a shareholder delegates the right to vote at an AGM to another person, which of the following statements is TRUE? - ✔✔They appoint a proxy Which of the following normally have voting rights attrib ...

FCA Sample Exam When a shareholder delegates the right to vote at an AGM to another person, which of the following statements is TRUE? - ✔✔They appoint a proxy Which of the following normally have voting rights attributed to them at the time of issue? - ✔✔Ordinary shares A fund manager has decided to adopt a `core-satellite` approach to its investment strategy. The key characteristic of this strategy is that it combines: - ✔✔active management with passive management The published spread of a unit trust price is the difference between which of the following? - ✔✔the selling and buying prices of the units What is the MAXIMUM compensation award that the Financial Ombudsman can make a firm pay? - ✔✔150,000 Which of the following is a measure of inflation in the UK - ✔✔Retail Price Index What does the seller of an option normally acquire? - ✔✔An immediate premium The profits made from full encashment of which ONE of the following products will be treated for tax purposes as income rather than capital gains? - ✔✔Investment bonds A capitalisation issue would have which of the following effects on an investor`s shareholding? - ✔✔The number of shares will change Capital Gains Tax is payable on which of the following assets? - ✔✔The sale of equities Spot FX is traded on Tuesday. When will the currency arrive in the recipients` bank - ✔✔Thursday The obligation to buy an underlying stock at an agreed price at a specified future date is known as a: - ✔✔future Which of the following financial activities is MOST likely to be carried out in the retail sector? - ✔✔Financial planning What protection product would be MOST suitable for a company that employs a consulting engineer because of his detailed knowledge of a particular project? - ✔✔Business insurance Which of the following is a characteristic of direct investment in property compared to other investments? - ✔✔It offers low volatility Who should private investors contact if they wish to buy shares in an investment trust? - ✔✔A stockbroker What does the S&P 500 provide? - ✔✔A broad view of the US stock market In which of the following circumstances would individuals be committing the offence of insider dealing? - ✔✔Dealing using information that was not available to the market, to make a profit A client holds an 8% bond which matures in 2016. It is currently trading at £124. What is the flat yield? - ✔✔6.45% Investing in bonds provides which of the following? - ✔✔Regular income If money laundering is suspected, to whom must employees report their suspicion? - ✔✔Money Laundering Reporting Officer What is a unit trust? - ✔✔A pool of investments managed collectively on behalf of its investors by a fund manager Which type of occupational pension scheme converts pensionable service into a benefit related to pensionable salary at or near retirement? - ✔✔Final Salary Scheme Treasury Bills are considered low risk investments because: - ✔✔they are government-backed The XETRA DAX index relates to stock market performance in which of the following countries? - ✔✔Germany Which of the following best describes an offset mortgage? - ✔✔When interest calculations on a mortgage are offset by increases in a property`s value What is the PRIME responsibility of the Bank of England`s Monetary Policy Committee (MPC)? - ✔✔Determining interest rates in accordance with inflation targets Fund A is an authorised fund and Fund B is an unauthorised fund. This means that: - ✔✔only Fund A can be marketed to the general public What fundamental factor usually dictates the price of goods and services within a market economy? - ✔✔Supply and demand What kind of securities trade on SETS? - ✔✔Shares in the largest UK companies What type of legal structure is an investment trust? - ✔✔Limited company The use of which type of investment wrapper means that the payments made by the investor will attract tax relief at outset? - ✔✔Pensions A transfer to which of the following is usually exempt from inheritance tax? - ✔✔Spouse A buyer of exchange-traded futures would be: - ✔✔going long All firms who wish to conduct financial services business in the UK have to undergo an authorisation process. The main reason for this is to ensure that the firm in question: - ✔✔is considered fit and proper What would be the economic impact of having higher inflation rates than other major industrialised countries? - ✔✔Loss of international competitiveness Which market would you use if you wished to trade in aluminium alloy? - ✔✔LME In which of the following ways can unit trusts be purchased? - ✔✔A private investor purchasing direct from the manager What is the meaning of "registered title" in relation to quoted equities? - ✔✔Shareholder name shown on the company register in relation to a shareholding Safekeeping of securities is a function BEST described as that of a: - ✔✔Custodian When a firm issues a complainant with its final response, what must the firm`s letter include? - ✔✔Details of the Financial Ombudsman Service Which of the following is a mandatory event? - ✔✔Dividend Which of the following investments is covered by the insider dealing legislation? - ✔✔Equities Which of the following indices contains only the largest companies, by capitalisation, listed on the London Stock Exchange? - ✔✔FTSE 100 Who is the legal owner of the unit trust assets? - ✔✔Trustee What are UK Government issued interest bearing securities known as? - ✔✔Gilts Which of the following statements regarding Exchange-Traded Funds in the UK is TRUE? They are: - ✔✔priced at or near net asset value Which of the following arrangements BEST describes an ISA? - ✔✔Tax-efficient wrapper for investments Commercial paper is: - ✔✔short term debt issued at a discount to par and repaid at par on maturity A life policy is essentially a contract between which two principal parties? - ✔✔An insurance company and an individual