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Trainee Exam > IM Questions > Flashcards

IM Questions Flashcards

1
Q

What service would you use for Non-Equity exposure?

A

Alternative Allocation, Alternative Income, UK Fixed Income

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2
Q

Maximum sector allowance within Global Large Cap

A

30%

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3
Q

Minimum market cap for not covered/monitored investment -

A

$20 Billion or £10bn FTSE 100

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4
Q

What is the maximum exposure to an individual equity?

A

10%

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5
Q

What is the maximum equity allocation in a Cautious AIA ?

A

40%

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6
Q

Which AIA correlates to a medium NATR?

A

Balanced or Steady Growth

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7
Q

What is the minimum Fixed Income requirement for Cautious ?

A

50% of total portfolio has to be in Fixed income and that equates to £35,000 (min £70k for MIS)

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8
Q

Name the core stocks?

A

Unitedhealth, ASML, Alphabet, Linde, Danaher, Orsted, Nestle, Visa, Thermo Fisher, Costco, Amazon & Microsoft [AAACUNMOLDTV]

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9
Q

3 growth buckets in which our model portfolio equities fall into?

A

Fast Growth, Cyclical & Defensive

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10
Q

Economies of scale?

A

When a firm gets larger - costs decrease

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11
Q

FX Charge ?

A

0.5% for trades under £30,000 and 0.35% thereafter

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12
Q

Pricing power

A

The ability to raise prices without affecting demand (monoply in an industry) ASML, LINDE.

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13
Q

Operational Gearing

A

The effect that fixed costs can have on the relationship that exists between sales and your operating profits - good example - https://moneyterms.co.uk/operational_gearing/

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14
Q

What are the segregated services for MIS? N.B segregated services are now called INVESTMENT STRATEGIES All

A

Global Emerging Markets, Global Smaller Companies, Global Technology Innovation, Large Cap Global Equity, Global Mid Cap Equity, PMS, Sustainable PMS, Special Situations

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15
Q

Name 3 cyclical sectors?

A

Financials, Industrials, Materials

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16
Q

Name 3 defensive sectors?

A

Utilties, Consumer staples, Health care

17
Q

Name 3 fast growth sectors?

A

Tech, Consumer discretionary, Communication services

18
Q

Last time to trade?

A

LSE opens 8am to 4.30pm

19
Q

What is systematic risk?

A

Is the risk inherent to the entire market, attributable to a mix of factors including economic, socio-political, and market-related events. N.B cannot be eliminated by diversification. e.g - inflation, interest rates, war, recessions, currency changes etc

20
Q

What is un-systemic risk?

A

Is the risk that a company or industry level risk could trigger a huge collapse. N.B can be dwindled through diversification.

21
Q

What form has to be completed by all US persons

A

W9

22
Q

What is modified duration?

A

Modified duration is a formula used to express the change in value of a bond from a 1% change in interest rates, illustrating that bond prices and interest rates move in opposite directions- higher interest rates lower bond prices, and lower interest rates raise bond prices.

23
Q

If interest rates rise, bond prices…

A

Fall

24
Q

If inflation rises, fixed coupon bond yield will

A

Rise

25
Q

Objective of Fixed Income Service

A

To provide a reasonable and predictable level of income with less risk of investing in direct equities

26
Q

What is a callable bond

A

Is when the issuer can redeem the bond before maturity (it is just an option, not obligation)

27
Q

Min investment for FI

A

£30K

28
Q

What happens to corp bond yields if Gilt yield rise

A

Corp bond yield also rises

29
Q

What is perpetual bond

A

No maturity date

30
Q

What is the income yield

A

The annual income on a bond as a % of its price

31
Q

Name three credit ratings

A

Fitch, Moody’s, S&P

32
Q

Characteristics that make a bond more susceptible to movements in interest rates

A

Long maturity, low coupon

33
Q

purpose of W8 Ben

A

A W8-Ben allows the client to receive 85% of dividends from US companies instead of the 70% without. This is due to US Witholding taxes.

34
Q

A client moves residency to the US from the UK. What documents do we need?

A

Change of circumstance form, W9-BEN, Passport, address confirmation

35
Q

Who needs to complete a W8 BEN E

A

Company Accounts and Trusts that hold US securities

36
Q

Do corp bonds have voting rights

A

No

37
Q

Bond holder or shareholder rank first in liquidation

A

Bond holders

38
Q

What is a derivative

A

Asset which derives value form price of another asset such as gold, or index

Trainee Exam (13 decks)

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