Set 2 Questions & Answers 201912

Set 2 3. Mr. Dave invested regularly for the past 3 months. His total
investment is RM4,500. What is the average price of his
1. Arrange accordingly from the highest risk fund to the lowest risk investment?
fund.
A. RM0.60 C. RM0.43
i. Equity Fund B. RM0.59 D. RM0.56
ii. Money Market Fund
iii. Balanced Fund
iv. Hedge Fund

A. i, ii, iii, iv C. iii, iv, ii, i

B. iv, i, iii, ii D. i, iv, iii, ii

2. The unit trust funds that are available in the market could be
designed to meet the following investor’s requirement: 4. How many units Mr. Dave had by the end of May?
A. 5,500 C. 4,500
A. Long term savings C. Retirement Fund B. 7,643 D. 4,000
B. Children’s Education D. All of the above

For question 3 & 4, please refer to the data given below.

5. A 20 year old employee, who belongs to Stage 1 of the client type,
Month NAV/unit has very little savings but possesses low commitments and is v ery
April RM0.50 skeptical in investing unit trust. However he has high toleration for
May RM0.60 risk. Which of the following should he invest in?
June RM0.70
A. Growth Fund C. Income Fund
B. Hedge Fund D. Balanced Fund

He or she can start building a small nest egg by investing into

growth oriented UTS. Perhaps some additional risk can be t aken
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Set 2 Questions & Answers 201912
and supply in Bursa Malaysia.
6. Capital Market Masterplan introduced a host of recommendations C. Prices remain unchanged throughout trading day.
to further spur the Islamic capital market. Parts of the efforts were D. Forward pricing is practiced.
to enhance awareness of the Malaysian Islamic capital mark et t o
domestic and international levels. Which recommendat ion d oes
this belong to?

A. Recommendation 77
9. Which of the following propositions a UTC should not practice?
B. Recommendation 66
C. Recommendation 65 A. “The market is going up, you should come in now and
D. Recommendation 73 capital appreciation is assured”.
B. “If you can’t invest it doesn’t matter, you can always loan
from the bank”.
C. “Invest in equity fund now; you stand a chance to win a
free welcome gift”.
Recommendation 65 – efforts to introduce more competitive and
D. All of the above
innovative Islamic financial products and services will be actively
pursued.

Recommendation 66 – efforts to introduce & pro mot e a wid er 10. Which of the following has the highest volatility of price?
range of Islamic collective investment schemes will be facilitated.
A. Bond Fund
Recommendations 73 – increased efforts to enhance the
B. Aggressive Growth Fund
awareness of Malaysia’s Islamic capital market at t h e d omest ic
C. Money Market Fund
and International levels will be pursued.
D. Income Fund
Recommendations 77 – Incentives to encourage the entry of
foreign intermediaries & professionals with expertise in I sla mic
capital market-related businesses should be provided.

7. Kumpulan Guthrie Bhd launched its first international co rp orat e

bond in
11. Rahim and Kajai invested RM64,000. Rahim received ret urns o f
8.5% per annum. As the yea rs went by, both doubled their
A. 2000 C. 1997
B. 1999 D. 2002 investment. Kajai received his returns faster by 1.27 years. What is
Kajai’s rate of return?

A. 8.5% C. 10%
B. 12% D. 17%
8. Which of the following best describes a closed-end fund?

A. Units are not quoted in an exchange.

B. Prices are determined by the market forces of demand
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Set 2 Questions & Answers 201912

15. The unitholder’s rights in UTS include the following except:

A. To receive UTS annual and interim reports.

B. To call meetings for unit holders.
12. What do you understand about 1:2 unit split? C. To receive distribution from UTS.
D. To change the investment portfolio.
A. The units in circulation will be doubled
B. The price will be doubled
C. The prices will proportionally decreased
D. All of the answers are incorrect

16. Tax rate = 20%

Inflation rate = 5%
Rate of return = 10%
13. Which statement is correct? Please calculate the effective rate of return after tax and inflation.

Fund X Fund Y A. 3% C. 10%

80% Equity 20% Equity B. 5% D. 20%
20% Fixed Income 80% Fixed Income

A. If the market falls, X will be more negatively affected than Y.

B. If the market rises, both X & Y will be negatively affected.
C. If the market falls, X will be more positively affected than Y.
D. None of the above is correct.

17. When comparing the performance of a fund over a period of time,

14. Mr. A wants to invest RM150,000. What is the maximum amount a decreasing MER will indicate?
can he borrow from the financial institution?

A. RM200,000 C. RM100,500
B. RM66,000 D. RM120,000

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Set 2 Questions & Answers 201912

A. The UTMC is not managing the total fees and expenses 20. Dollar cost average is:
well.
B. The UTMC is managing the total fees and expenses well. A. Buy low sell high
C. The NAV of the fund is rising. B. Buy high sell low
D. The NAV of the fund is falling. C. Regular investment at a fixed amount of money
D. Buy fixed unit every time

18. One of your friends tells you, “By the time I retire in year 2 0 40 , I
believe KLCI will be many times what it is today. I am happy with
that. Give me a fund that can best deliver the same resu lt .” What 21. Mr. Ahmad made his first investment at the price of RM0.2 0. H e
would you recommend to him? puts in more money on the second investment and got 10,000
units. He made redemption a month after that and receives
A. Buy a growth fund because it can give him a return better RM15,000 for RM0.25 per unit. How much d id h e in v est a t h is
than KLCI by year 2040. first investment?
B. Buy a balanced fund because the investment return is less
volatile than the KLCI. A. RM15,000 C. RM5,000
C. Buy an index trading fund using KLCI as benchmark. B. RM10,000 D. RM20,000
D. For such a long investment horizon, don’t worry buy any
fund.

19. What is the meaning of liquid advantage offered by unit trust

scheme?
A. As liquid as cash.
B. Able to purchase or redeem on any business day.
C. Buys more unit trust on rising and less on falling market.
D. None of the above.

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Set 2 Questions & Answers 201912
22. What is the purpose of UT performance table? 25. What is the NAV per unit of Fund A cum-D?
A. For SC to regulate the funds.
B. For FIMM (Old Term: FMUTM) to regulate the funds.
C. Segregation of funds into different categories according to A. RM1.50 C. RM1.40
the fund size. B. RM1.45 D. RM1.38
D. To provide investors with the same means to monitor and
evaluate the performance of the fund.

26. What is the NAV per unit of Fund A ex-distribution?

23. Islamic UT invest only in halal counters such as: A. RM1.50 C. RM1.40
B. RM1.45 D. RM1.38
A. Conventional banking
B. Telecommunications
C. Gambling
D. Alcohol

24. Which of the below describes open-end funds?

27. This fund invests mostly in stocks in listed companies, which
A. The price fluctuates within the day. emphasizes more in capital growth than fixed income and
B. The fund manager has to buy back from the investor. distributions.
C. Transactions are through stock broker.
D. They are property trust. A. Equity Fund
B. Balanced Fund
C. Bond Fund
D. Money Market Fund

Question 25 & 26 are to be answered based on the following

NAV cum-distribution of Fund A is RM150,000,000. Unit in

circulation is 100,000,000. The fund declared distribution RM0.1 0
per unit, and the fund manager is charging 5% for service charge.

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Set 2 Questions & Answers 201912

Question 28, 29 & 30 30. How long does it take to increase the investment amount to
Lump sum investment : RM100,000 RM200,000 with the effective rate of returns from quest io n 2 8 &
Initial entry cost : 6.5% 29?
On-going management fee : 1.4%
Rate of Return : 11% A. 4.8 years C. 7.5 years
28. What is the return of the investment after 10 years? B. 6.3 years D. 7.2 years

A. RM233,839.11 C. RM233,547.23
B. RM234,831.27 D. RM234,098.95

31. The published NAV in newspaper today is RM0.65. Th e p rice a t

the end of the day is RM0.66. If Mr. Eddie in v est ed RM10 ,000
today, how many units is he getting if forward pricing is a p p lied.
(Assume the 5% of service charge is applied)

A. 14,430.02 units C. 15384.62 units

B. 16,666.67 units D. 15,151.52 units

29. Assume that the initial entry cost decreased to 6%, what is the
value of the investment after 10 years?

A. RM233,839.11 C. RM235,938.96
B. RM235,089.59 D. RM234,098.95
32. In Annual Report of ABC Millennium Fund, expenses incurred b y
the fund during the financial year:-
Annual Management Fee : RM3,528,673
Trustee : RM150,326
Auditor’s Remuneration : RM16,300
Administration expenses : RM28,418
Average Fund Size : RM235,300,528
What is the MER of this fund?

A. 1.50% C. 0.07%
B. 1.58% D. 0.01%

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Set 2 Questions & Answers 201912

35. Mr. A chooses Real Estate Investment Trust (REIT) that invests in
real property which provides him with an opportunity to participate
in property market in a way which is normally impossib le f o r a n
individual investor like him as he only has RM 1,000. The
statements below are valid about REIT except:

33. Mr. Abraham invested RM5,000 into ABC Growth Fund managed A. All REITs are open-end fund, and the units are not list ed
by ABC Unit Trust Management Bhd. Mr. Abraham now owns in the stock market.
A. RM5,000 worth of units of entitlement in the ABC B. Returns from property comprise net rental income, plus or
Growth Fund minus any change in the value of the p rop ert y o v er t h e
B. RM5,000 worth of shares in ABC Unit Trust Management period.
Bhd C. Units in the listed REIT can be bought and sold t h rough
C. RM5,000 worth at direct ownership of investment stockbrokers, and UTC would not normally arrange to
portfolio held by ABC Growth Fund buy or sell units for an investor.
D. RM5,000 paid up capital of ABC Unit Trust Management D. The prices at which units in REIT trade on Bursa Saham
Bhd will reflect the returns.

34. How many times would an investor receive report/reports in a

financial year? 36. Besides the daily prices, the investors need to consider the
distribution being declared by the fund manager when they
A. 1 time evaluate the performance of the fund. Ho w d oes t h is a ffect t he
B. 2 times NAV?
C. 3 times
D. 4 times A. The NAV of the fund is adjusted downward.
B. The NAV of the units of the particular fund remains
unchanged.
C. The NAV per units has gone up.
D. The tax rate will decrease when distribution is declared.

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Set 2 Questions & Answers 201912

After receiving distribution, the NAV of the fund falls by the 39. Assume that Mr. Z wants to repurchase 20,000 units of his
amount of the distribution. (Chapter 1, page 1-46) investment in Fund XYZ after distribution. Calculate t he amo unt
that he will get from the repurchase.
37. A gradually decreasing MER over a period of several years
indicates that A. RM29,800.00 C. RM30,000.00
B. RM28,000.00 D. RM29,200.00
A. The Fund Manager is reducing the annual management
fee.
B. The Management Company may be managing its
operating costs efficiently for its fund size.
C. The performance of the fund is getting better than
previously. 40. For investor who is unable or unwilling to do research and
D. The performance of the fund is getting worse than before. analyzes investment market on his or her own, UTS is an ideal way
of investing. There are numbers of other significant benefits of
investing that should be noted such as:

I. Professional Management
II. Ready access to funds
III. Opportunity cost
IV. Investment exposure
Question 38 & 39 V. Diversification
38. A distribution of RM0.04 per unit has been distrib ut ed f or Fu n d A. I, II, III only
XYZ, the NAV cum distribution was RM1,500,000 while un it s in B. I, II, III and IV only
circulation was 1,000,000 units. Calculate the NAV per unit ex C. I, II, IV and V only
distribution. D. All of the above

A. RM1.49 C. RM1.50
B. RM1.46 D. RM1.40

41. The functions of the Securities Commission include

I. To regulate all matters relating to unit

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Set 2 Questions & Answers 201912

trust industry. a distribution entitlement for the full period by acquiring units just
II. To ensure that the provisions of securities laws before the ex-D date. Technique A is known as
are complied with. A. Automatic Reinvestment
III. To license and supervise all licensed persons as B. Suspension
may be provided for under any securities law. C. Spread
IV. To act as a custodian of assets of a UTS. D. “Buying” a distribution

A. I, II, III C. II, III, IV

B. I, II, IV D. IV only

42. At age 25, Unitholder C, an aggressive investor is willin g t o t a k e

high risk in investing in UTS B that is aggressive UTS. A few 44. Dollar cost Averaging (DCA) can affect the average cost of
years later, Unitholder C is married with young children and he investment. Which statement clearly explains the DCA effect?
feels his personal circumstances has changed and that he prefers to
invest in medium to low risk type of UTS. What is the best A. With fixed amount of money, investor can acquire more
exercise for Unitholder C to do as a result of his changing personal units in a rising market over a short term period.
circumstances? B. With fixed amount of money, investor can
acquire lesser units in a fluctuating market over long term
A. Repurchase Units period.
B. Suspension C. With fixed amount of money, investor can
C. Switching acquire more units at lower price and fewer units at higher
D. Cooling-Off Right price which can reduce the average cost o v er lo n g t erm
period.
D. With fixed amount of money, investor can acquire regular
amount of units at lower price which can reduce the
average cost over long term period.

43. Technique A operates in a way which the period of ownership

prior to the ex-D date is irrelevant. It is therefore possible to “buy”

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Set 2 Questions & Answers 201912

45. What is the real value for a single storey house costing RM75,000
today in 6 years’ time with an inflation rate of 4%pa.?

A. RM95,874.93 C. RM98,695.93 48. To meet challenges posed by sophisticated customer, UTC must
B. RM93,000.93 D. RM94,898.93 strive to do the following EXCEPT:

A. Maintain high ethical standard

B. Hard sell
C. Acquire professional qualification
D. Good product knowledge

46. Which of the below must you NOT say to a potential investor? 49. When was FIMM (Old Term: FMUTM) formed?
A. Unit trust is as safe as fixed deposits. A. July 1992 C. Aug 1993
B. The market value of your capital may be lower than B. Aug 1992 D. Aug 1994
initially invested.
C. Return in unit trust is not fixed.
D. You should diversify your portfolio and have some fixed
deposits.

50. UTMC uses forward pricing method when computing t h e sellin g

and repurchase prices. Assuming at 9.30am today, the NAV of t h e
fund was RM180,000,000.00 and units in circulation was
200,000,000. At the end of the day the NAV has increased to
RM190, 000,000.00 and units in circulation unchanged. If a
47. Which of the following best describes the equity fund? customer wants to redeem today, how much is the repurchase price
per unit if no repurchase fee is charged and the repurchase price is
A. Mainly invest in the equity market at NAV per unit.
B. Mainly invest in bond and equity market
C. Mainly invest in money markets A. RM0.95 C. RM1.11
D. Mainly invest in property markets B. RM1.05 D. RM0.90

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Set 2 Questions & Answers 201912

53. “Investment benchmark” is

E. Fund management objective that selects securities based
on a specified Stock Exchange Composite Index.
F. A standard measurement for comparing investment
performance.
G. Shifting investment portfolio from stocks to fixed-income
51. Which of the following charges is the fee levied by managers on securities.
investment to cover the cost of distributing the unit trust? H. A strategy that entails buying low and selling high.
A. Management Fee C. Trustee Fee
B. Initial Service Charge D. Repurchase Fee

54. Miss Amelia spent RM25,000 last year and this year she spent
RM26,125 with the same purchasing power. How much Miss Am elia
1-29) does has to spend if she wants to maintain it for the next year?
52. Mr Hadi holds 5,000 units of Fund XYZ before u nit sp lit o f 1 : 2 A. RM27,301 C. RM27,250
with an investment value of RM10, 000.00. After the unit split B. RM28,001 D. RM30,350
issue, his fund XYZ account will have

A. 2,500 units at investment value of RM10, 000

B. 5,000 units at investment value of RM15, 000
C. 7,500 units at investment value of RM15, 000
D. 7,500 units at investment value of RM10, 000

55. If an investor secures maximum loan financing for unit trust

investment, and the amount of investment on his own is RM 4 0 , 0 0 0,
what will be his total investment?

A. RM19, 701 C. RM81, 212

B. RM59, 701 D. RM121, 212

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Set 2 Questions & Answers 201912

59. Under whose name the assets and investments o f t h e u n it t ru st

scheme would be held under?

A. Trustee C. Investor
B. UTMC D. Stock broking house
56. introduces new licensing frame work allows
capital market intermediaries to hold one license to carry o n a ny
one or more regulated activities.

A. Capital Markets and Services Act

B. Securities Commission Act 60. NAV per unit of Fund C is RM0.89, assuming there are 5% service
C. Guidelines on Unit Trust Funds charge and no redemption charge, how much Mr. Kumar is go in g
D. Securities Industry Act to get if he redeem 5,000 units of his investment in Fund C?

A. RM4,450 C. RM4,672.50
B. RM4,227.50 D. RM4,500
57. A UTS intends to increase the level of its management fees. Who
must approve this change?

A. The scheme’s officers

B. The scheme’s management company
C. The scheme’s custodian
D. The scheme’s unit holders

58. Azita just bought 5,000 units of ABC Growth Fund from her UTC,
Miss Anne. Who paid the initial sales charge?

A. Azita
B. Anne
C. The fund manager of the ABC Growth Fund
D. The ABC Growth Fund

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