Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

PCIAM > PCIAM > Flashcards

PCIAM Flashcards

1
Q

Allowance amounts

X 5

A
  • share purchases and loans to companies, involving loans to small close companies / or shares in them
  • partnership investment where partner pays interest on a loan to benefit partnership
  • payment of iht where a loan was taken to pay. 1 years benefit
  • ISA
  • pension
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Powers of regulatory decisions committee (RDC)

X 7

A
  • private warnings
  • variation of permissions
  • withdrawal of authorisation
  • withdrawal of approval
  • prohibition of individuals
  • public censure and statement if misconduct
  • financial penalties

Upper tribunal with 28 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Business asset rollover

A
  • cgt deferral can be claimed by incorporated and unincorporated businesses when they sell assets send buy new assets
  • must be trading
  • new asset must be purchased staring one year before and three years after disposal
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Dividend yield

A

Dividend per share /
Share price

X 100

  • assess current yields with previous to determine progress
  • cannot compare like to like as will have different div policies
  • growth stocks may not pay a dividend
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Equity based options

X 7

A
  • Predetermined expiry dates quarterly
  • physically settled
  • through ICE futures Europe on around 100
  • expiry date is American style
  • pricing is pence per share
  • call option holder - not eligible fir dividend unless exercised prior to ex- dividend
  • stock specific risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Margins futures

X 5

A
  • Initially- deposit
  • variation- loser pays each day
  • spot month
  • intra-day - if initial too low on volatile day
  • maintenance - higher initial
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Holding period return / mwr

A

(D + V1 - V0) / Vo

(D + v1 - v0 - c) / Vo + ( c x n/12)

V0 = starting 
V1 = selling
D = income 
C = net new money in or out
N = no of months remaining in year when taken or added
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

VCT

A

Income tax free
CGT free
30% tax relief on £200k
Held 5 years
- listed on stock exchange
- income must be from shares / securities
- 70% qualifying holdings
- not more than 15% in one company
- at least 30% of qualifying holdings must be new ordinary shares and at least 10% per company
- cannot invest more than £1m in any single qualifying conpany each year
- not exempt from IHT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Preference shares types

X 5

A
  • cumulative
  • non cumulative
  • participating
  • redeemable
  • convertable
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

FSA

A

FSMA 2000

Financial service act 2012

2013
Split to fca and pra

Retail distribution review
Level 4 by 31/12/12

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

LSE listing requirements by fca

X 8

A
  • market cap of 700k+ & 25% shares free
  • market cap of bonds 200k
  • no restrictions on shares
  • no more than 30% voting rights
  • 3 years audited accounts
  • directors experience
  • pre-vetted prospectus by UKLA
  • less stringent in science based
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Capital requirement directive

3 pillars 1/1/14

A

To ensure that firms (eg banks, building societies and investment firms) hold adequate resources and have adequate systems and control to manage both business and associated risks

1 - quantification of risks arising for financial firms trading and credit business

2- robust requirements on public disclosure to encourage stronger market discipline in ensuring firms hold appropriate capital for their business

3 - stronger constructive dialogue between firms and regulator on risks and the level of capital which should be held

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Business asset disposal relief

5 qualifying

A
  • Introduced in April 2008
  • cgt at 10% up to £10mill now £1mill
  • disposal of sole trader business
  • disposal of partnership share
  • dis of shares in trading g company where they are employed and gave 5% share or more
  • assets that have been loaned to business
  • shares bought through enterprise management scheme
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Chattels CGT

A

Exempt if value less than £6k or wasting assets (less than 50 years)

If sold for less than 15,000 gain limit

5/3 (sale price - 6000)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Treynor ratip

A

(Rp - Rf) / B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Six stage performance review

A
  • benchmark
  • benchmark asset allocation
  • asset class returns
  • comparison of asset classes
  • compare benchmark with portfolios
  • compare stock selection
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Formula of profi loss of a future

A

No of ticks × tick value × no of futures

Ftse 100
Tick size 0.5 point
Tick value £5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Backwardation

A
  • future price is below cash price

- bid price is greater than ask price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

REITS

A
  • closed ended
  • listed on recognised exchange
  • uk resident
  • 1 class of share
  • 75% profits from rental
  • at least 3 properties
  • min interest cover 1.25

Ring fenced property let

  • exempt from corporation tax
  • 90% rental profits paid 12 months
  • payments paid net 20%

Non ring fenced
- subject to 19% corporation tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Covered warrant

A

Gives the right to buy or sell underlying asset a specified price on or before date

Option issued by 3rd party will cover / hedge exposure by buying underlying stock or futures/options

Cover ratio eg 25 :1 share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Working capital ratio (current ratio)

A

Current assets /
Current liabilities

1.5 and 2 acceptable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

ORB - order book for retail bonds

X 5

A
  • London stock exchange 1/2/10
  • liquid and transparent market in retail bonds
  • all listed on London main markets
  • provides a similar facility to that which is used for share dealing for a select number of gilts
  • directly as sophisticated or via broker
  • fixed interest T+2
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

New issue methods

X 6

A
  • fixed price offer
  • tender offer
  • offer for sale
  • offer for subscription - invest trusts
  • placing (selective marketing)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

P/E Price earning ratio

A

Market price for shares /
EPS earning per share

High ratio indicates do well and grow, low lower growth more established. Extremely low could mean undervalued

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Index based options

X 7

A
  • available for monthly expiry dates for first 3 months then quarterly to 24 months
  • no physical asset
  • available through ICE futures Europe, FTSE 100 options, FTSE index flex options
  • FTSE index have European style expiry dates
  • £10 per index point (tick size 0.5 tock value £5)
  • no dividends
  • diversifed risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Modified duration

A

Mod duration =

  • macaulay duration / (1+GRY)

Md = bond with highest duration is the bond whose price will move the most given any change in interest rates

Minimise risk by buying higher coupon shorter term

Overestimates fall and underestimate rise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Junk bond

X 3

A
  • below investment grade
  • below BBB standard and poor
  • high yielding
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Financial policy Committee FPC

X 3

A
  • a Committee of BOE
  • identify, monitor and take action to reduce or prevent systematic risk with a view of protecting and enhancing uk financial system
  • 2nd support economic policy of government
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Business relief

X 2 rates

A

100%

  • interests in unincorporated business
  • shareholding in unquoted or AIM

50%

  • shares controlling more than 50% voting rights in fully listed company
  • land, buildings, plant and machinery used for business controlled by donor

Needs to have owned fir 2 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Fit and proper

X 3

A
  • honesty, integrity and reputation
  • competence and capability
  • financial soundness
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Drawbacks of emerging markets

X 6

A
  • restriction on foreign ownership
  • foreign exchange restrictions
  • taxation
  • additional costs
  • lack of transparency and info
  • corporate governance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Insider dealing

Explain

3 x defence

A

Dealing on the basis of price sensitive info that has not been made public

Criminal offence 1980 7 years

  • did not expect to make a profit
  • reasonable grounds to believe info disclosed widely enough
  • would have dealt anyway

Market abuse - civil with unlimited fine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Standard deviation

A
  1. 26% one standard deviation
  2. 5% in two
  3. 75% in three

Square root of variance

Measures how much it differs around its mean

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Discretionary trust tax

A 
£1000 standard rate
7.5 % / 20 %
38.1% / 45%
CGT £6,150
Expenses can be relieved
Must make sure enough in tax pool
30% of trust charge 20% = 6% 10 year
Exit x/40 3 month periods x 30% of effective rate
Stamp duty add 3%
Cost are grossed up
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

When can invest managers accept goods or services from brokers when carrying out transactions for clients

A

No

  • executes orders through a broker or another person
  • passes these charges to the customer
  • is offered goods and services in return fir these charges

Yes

  • linked to arrangement and conclusion of transaction
  • provided between invest man making invest decision and been carried out

Re research

  • capable of adding value
  • represents original thought
  • intellectual rigour
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Permissable orders

X 8

A
  • at best
  • limit (upper and lower limits)
  • execute and eliminate (can be partial)
  • fill or kill
  • market
  • iceberg
  • hidden limit orders
  • hidden pegged orders
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Accumulation tryst

A
  • can accumulate income and add to trust capital

- can pay income out like discretionary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Fca

1 x strategic objective

3 x operational

A
  • ensure relevant markets function well
  • protection for customers
  • protect and enhance integrity of financial system
  • effective competition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Investment trust

A
  • public limited company
  • board of directors
  • closed end funds
  • able to gear
  • conventional - indefinite
  • Split capital
    Income / capital / zero div pref
  • 10 % max into other trusts
  • Corp 19% tax on foreign or unfranked
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

CFDs

X 7

A
  • can be on companies as well as indices
  • don’t buy underlying asset. Hard to purchase index
  • rising or dropping (short)
  • geared products
  • no stamp duty
  • CGT payable
  • stop losses available
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

130/30

A
  • Ability to short a % of portfolio to improve performance
  • rank shares in order of expected returns
  • then short sell securities at bottom to raise up to 30% of fund value
  • money raised buys more of top ranking
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Dividend cover

A

Earnings per share EPS /
Dividend per share DPS

  • Ability to maintain current dividend that is paying out
  • useful for income investors
  • high could mean retaining profits for future
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Earnings per share EPS

A

Profits after interest, tax and pref div /

Number of ordinary shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Legal requirements of valid trust

X 3

A

3 certainties

  • intention
  • subject
  • object
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

What is beta

A

Measure of sensitivity compared to market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Arbitrage

A

Seek low risk profits by exploiting price anomalies in the market

Professionals - keeps markets efficient

Eg sell asset and buy future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Fundamental investing

A
  • value investing - Ben Graham 1930s
  • concentrates on balance sheet ratios like price to book
  • results, profits, balance, cash flows
  • GAR
  • top down / bottom up
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

EIS

A 
Tax free in product
Dividends taxable
CGT free if held 3 years
30% tax relief max cont £1mill
Unlisted
Qualifying trade
Gross assets must not exceed 15mill /16mill after
Fewer than 250 employees
IHT exempt after 2 years
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

TWR - fund manager return

A

V1/V0 x V2/(v1 +c) - 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Capital employed

X 4

A
  • share capital
  • reserves
  • loans
  • overdrafts
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Bare trust

X 5

A
  • Single beneficiary
  • entitled to capital and income at 18 if full mental capacity
  • can buy stocks and shares
  • parental settlement rules for tax 100
  • prevent 3% additional property duty
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Gilts coupon

A

%/2 X Index ratio % is changed to decimal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Types of domicile

X 4

A
  • Origin
  • Choice
  • dependency
  • deemed

Leave uk resident lose deemed after 3 years for iht and income cgt 6 years

54
Q

POA

A
  • enduring (old)

- lasting poa ( heath and welfare / property and financial affairs)

55
Q

MiFID II updated areas

X 7

A
  • suitability and appropriateness
  • costs and charges
  • illustrations
  • governance
  • 10% drop
  • research
  • reporting
56
Q

Limitations of indices

X 5

A
  • don’t take into account costs or tax
  • most track price movements not including div reinvestment. If total div is quoted as being reinvested on ex div date
  • assumes investor is fully invested in constituent companies at all times
  • survivorship bias
  • weightings by market cap leads to high covariance portfolio where favoured sectors do over present
57
Q

Investment styles

X 6

A
  • growth
  • value
  • thematic
  • fashion led
  • contrarian
  • lifestyle
58
Q

Classification of trusts

X 5

A
  • express
  • implied
  • resulting
  • constructive
  • secret
59
Q

What is pure expectation theory

A
  • states that long term yields are the geometric average of expected short term rates.
  • yield curve is a reflection of market expectations of interest rates
60
Q

Monetary policy Committee MPC

X 4

A
  • committee of BOE
  • set inflation target - open letter of 1% out
  • set interest rates
  • 9 members with 4 external
61
Q

What is Sharpe ratio

A
  • measures excess returns for every unit of risk measured by standard variation

Sharpe = (Rport - Rf) / standard dev

62
Q

RDR / MIFID charges

A
  • RDR - adviser and platform charges

- Mifid 11 - more transparent fees. Effects of costs and charges on investment

63
Q

Aggregation and allocation

X 5

A

A firm aggregates orders with its own

  • no client disadvantage
  • disclosed to the client
  • order of aggregation policy established
  • likely to benefit client
  • could disadvantage
64
Q

Convertables

A
  • hybrid of debt/pref share and equity
  • pure bond or preference share with a call option
  • option cost on top of purchase price - lowers yield
  • conversion premium is excess of conversion price over equity price
  • subject to cgt unlike corporate debt

Cov price = market price / conv ratio

65
Q

Sharpe ratio

A

(Rp - Rf) / sd

66
Q

Conversion price / premium

A

Conversion price

Market price / ratio

Premium

Conversion - share

67
Q

Debt to equity ratio

A

(Int bearing loans + pref share capital)/

Ordinary shareholder funds

68
Q

KIDS

X 4

A
  • aims
  • your commitment / investment
  • risks
  • questions and answers
69
Q

PP communication

X 6

A
  • can’t dictate future
  • not more prominent than other info
  • covers at least five yrs
  • affects of charges and commission
  • explain simulation
  • promotions completed by approved person
70
Q

What are ETF

A
  • Trades like a normal share on LSE
  • invests in diversified mix
  • low cost
  • shares / commodities/ fixed income
71
Q

Share price - Gordon growth

A

Share price =

Dividend/(return required - div growth)

20p/ 0.1 - 0.05 = 400p

72
Q

Term assurance

X 7

A
  • level term
  • increasing term
  • renewable- no more uw
  • convertible - wol / endowment
  • decreasing
  • family income benefit
  • unit linked - sell units to fund life
73
Q

Price / book ratio

A 
Current price of share /
Book value (nav/no of shares)
74
Q

Info ratio

A

(Rp - Rb) / tracking error

75
Q

Contribution to return formula

A

(Actual - bench) x bench asset distribution

76
Q

Endowments

5 x types

5 x qualifying rules

A
  • non-profit - fixed some on death or may
  • with profit - guarantee + bonuses
  • low cost - DTA element
  • low start
  • unit linked endowment
10 years or more
Payable at least annually
Sum assured not less than 75% of total premium over term
Not more than twice of any other year
Not more than 1/8 of over term
77
Q

Return of equity ROE

A

Profit after tax and pref div /
Capital and reserves (shareholder)
X 100

% return company is achieving on amount of funds provided by shareholders. Above average rates is a good company

78
Q

Fair, clear not misleading

5 points

A
  • if fca mentioned must note activities not covered
  • must state if capital at risk
  • yield quotes balanced
  • complex investment must be clearly explained
  • packaged product - provider accurately described
79
Q

Indices - weightings or constituents of share

X 3

A

Price weighted arithmetic- price per share
Average of all prices of stocks on index (dow Jones 30 Industrial/ nikkei 225)

Unweighted geometric
(Sp 500 equal weight)

Market value weighted arithmetic
Average of market capitalisation
(Ftse 100 / S&P 500)

Free float - amount of securities available for outside investors. Takes away institutional and government holdings in banks.
Capped - upper limit to weighting on market capitalisation
Fundamental- data such as cash flow, book value, earnings rather than market cap

80
Q

What is stagging

A
  • buying intital Public offerings and selling at profit when trading begins
81
Q

SRI / Esg

A

Continued indefinitely without causing harm to current or future generations or exhaust natural resource.

Principles focused

Styles

  • meet certain standards
  • change agents - env message is clear
  • responsible ownership policy - good business practices

Positive / negative screening

ESG - returns focused
- no negative screen

82
Q

Earnings yield

A

Earnings per share /
Current market price

X100

83
Q

Adjusted net income

A
  • Personal allowance
  • child benefit
  • calculate net income
  • take off pension from net pay or gift aid
84
Q

Gilts

Flat/interest/running yield calc

Redemption yield

A

1 Flat yield =

(Ann gross coupon / clean price) x 100

2 Red yield
(Red value - current price)/yrs left

Divide by current price then x 100

Then 1 minus 2

85
Q

Interest cover

A

Profit before interest and tax /
Net interest paid

X 100

How many times interest will be paid from current profits

86
Q

Splitting rights / max subscription at nik cost

A

(No of rights x subscription price) / theoretical ex rights price

If nil paid rights less than £3k or less than 5% of value of holding proceeds are deducted from original cost and cgt deferred

87
Q

Wol

X 4

A
  • non profit
  • with profits - reversionary / terminal bonus , MVRs
  • low cost
  • unit linked - reviews 10 then 5
88
Q

Alpha

A

Actually return - CAPM

89
Q

CAPM

A

Er = Rf + B(rm - Rf)

Provides amount of compensation and investor needs for taking additional risk of the market

90
Q

Reinvestment relief into EIS shares

A
  • similar to business rollover
91
Q

Liquidity or quick assets ratio

A

Current assets - stock /

Current liabilities

92
Q

Power of appointment / flexible trusts

A
  • power of appointment to appoint or vary beneficiary dependent on how they are drafted
  • default beneficiary who has right to income (interest in possession) and possibly capital
  • common for life insurance. Can change beneficial interest and trustees
93
Q

CREST

4 x services

A
  • guarantee settlement of crest member transactions up to debut cap
  • record each members obligation on cash memorandum account real time
  • settle members position at end of day
  • act as collector of transfer tax SDRT
94
Q

Credit default swap

X 2

A
  • derivative that pays on bond default event

- rate gives a measure of credit risk

95
Q

AER

A

AER = (1 + r/n)n - 1

n (1+r)-1

96
Q

Rule 72

A

72/ interest rate

Approx length if time to double

97
Q

Trustees act 2000

X 6

A
  • investment powers
  • duty of care
  • investment duties
  • delegation of trust functions
  • paying fees to trustees
  • insuring a trust
98
Q

Available NSI

X 6

A
  • premium bonds 1%
  • junior isa 1.5%
  • income 0.01%
  • investment account 0.01%
  • direct saver 0.15%
  • direct isa 0.1%
99
Q

What is information ratio

A
  • risk adjusted return to measure fund managers performance rather than closet indexing

info = (Rport - Rbench) / tracking error

100
Q

Return of capital employed ROCE

A

Profit before interest and tax/
Capital employed

X 100

Better comparison between companies than ROE as ROE is heavily by differences in capital structure some of which have higher debt funding

101
Q

SEIS

A 
tax free in product
Dividends taxable
CGT free after 3 years
50% tax relief up to £100k
Fewer than 25 employees
UK based
Under 2 years old
Trade in approved sector
Not raise note than 150k via seis
No more than 200k gross assets
Not controlled by investor receiving their capital
Investors can't have more than 30%
102
Q

What is asset and liability management

A

Risk management technique to earn adequate return, while maintaining a comfortable surplus of assets beyond liabilities

Gap, scenarios and duration analysis

103
Q

What is Alpha ratio

A
  • risk adjusted measure of active return
  • measure of stock picking skill

Alpha = actual - CAPM

104
Q

Risks of emerging markets

X 5

A
  • political
  • volatility
  • liquidity
  • safekeeping
  • currency
105
Q

Contango

A

If futures price is higher than spot

106
Q

Interest in possession trust

A
  • right to income or use assets
  • sometimes from a will
  • legislation enacted in 2006 treats these in same way as discretionary trust for IHT
  • 7.5% and 20% income
107
Q

Fca notices x 6

A
  • warning
  • decision
  • further decision
  • discontinuance
  • final
  • supervisory
108
Q

Tracking techniques

X 4

A
  • full replication
  • Stratified sampling
  • optimisation - comp modelling
  • synthetic - swaps / derivatives
109
Q

Hmrc penalties

A

Filing

Miss deadline £100
3 months £10pd up to 900
6 months 300 or 5%
12 months 300 or 5%
12 months and withholding info 100% / 70% or 300

30 day late payment 5% of tax
6 months 5% or 300
12 months 5%

2.6 % interest charge / 0.5% overpayment

110
Q

Future or present value

A

FV = PV(1+r)n

111
Q

Priority order liquidation

X 8

A
  • liquidators fees
  • fixed charge
  • preferential creditors
  • floating charge holders
  • unsecured creditors,
  • subordinate creditors
  • preferential shareholders
  • ordinary shareholders
112
Q

Hold-over relief

A
  • form of cgt deferral
  • gifts of certain assets
  • acquisition cost is reduced by held over gain
  • both donor and donee must claim and donee is resident in uk
113
Q

Benefits of emerging markets

X 6

A
  • faster economic growth
  • savings rates usually high
  • inefficient pricing
  • industry representative
  • attractive valuations
  • low correlation to developed
114
Q

Charitable trusts

X 3

A
  • Promote a purpose and do not primarily benefit an individual
  • charitable purposes only
  • charities act 2006 states 13 purposes
115
Q

Adjusted income

Threshold

A 
Adjusted
Total gross income
\+ pension contributions from net income
- personal contributions 
- lump sum death benefits subject to tax
Threshold
Total gross income
- tax reliefs 
- lump sum death benefits subject to tax
\+ Salary sacrifice entered and pension lost
116
Q

Residence test

A

Non

  • less than 16 days or 46 if not been classed as resident for 3 years
  • work full time abroad, in uk less than 91 days and worked less than 30

Yes

  • 183 days or more
  • only home is in uk spent at least 91 days there of which 30 this tax year
117
Q

What is Treynor ratio

A
  • risk adjusted return based on systematic risk
  • beta for volatility

Treynor = (Rport - Rf) / Beta

118
Q

Smart beta

A
  • combine passive and active strategies
  • uses alternative index construction to traditional market- cap indices
  • empathises capturing investment factors or narjet inefficiencies in a rules based transparent way
  • may uses alternative weighting schemes such as volatility, liquidity, quality,value, size
  • 2019 $880 billion
119
Q

Regulatory reporting

X 8

A
  • benchmarks
  • method and frequency of valuation
  • delegation of discretionary
  • types of investment and transactions
  • management objectives and risk
  • custodian details
  • transparency of costs
  • 10% rule
120
Q

Options terminolgy

X 7

A 
Buyer
Seller
Intrinsic value - current price minus exercise
Time value - premium minus intrinsic
In the money 
At the money
Out the money
121
Q

Split capital trusts

X 4 types of share

A

Zero div preference

  • limited life no income
  • right to capital on wind up
  • high priority
  • utilise CGT

income shares

  • may have pre set maturity value
  • could offer high income and nominal redemption
  • offset CGT loss

income and residual

  • ordinary or highly geared ordinary
  • high and rising income
  • surplus assets at wind up

Capital shares

  • no income surplus assets
  • potential for capital growth
122
Q

Market abuse

X 7

A
  • insider dealing
  • improper disclosure
  • misuse of info
  • manipulating transactions
  • manipulating devices
  • dissemination/ pumpn dump trash n cash
  • distortion or misleading behaviour
123
Q

Structured products

X 6

A 
Index linked- long or undated
Accelerated - growth (say 200%) but could lose 
Reverse - bear tracker 
Digital- coupon based on two references 
Capital secured
Scarps
124
Q

What is liquidity preference theory

A
  • investor in longer dated bonds has to wait longer for money to be repaid therefore greater risk which requires greater return
  • upwards sloping normal curve
125
Q

B and C shares

A

B - same as ordinary but Dividends are given as shares instead. Taxed as recieved cash div

C - converted to ordinary shares when bulk of new cash has been invested converted on nav basis

126
Q

Types of ETF

X 7 + 2

A
  • index
  • commodity
  • bond
  • currency
  • actively managed
  • hedge fund
  • leveraged
  • smart beta
  • physical / synthetic
127
Q

Number of days

A

30 days hath Sept, April, June and nov

128
Q

Ppf

06/04/05

A 
90% subject to cap £41,462 age 65
100% if already reached NRA or in recept of suvivors benefit
21 years long service 3% increase
50% spouse
25% child
5/4/97 cpi 2.5% nothing before
129
Q

Isa limits

A

H2b 3k bonus on 12k
Lifetime 4k pa 18/40 25% bonus age 60 house under 450m
JISA 9k

130
Q

Corporate debt

X 9

A 
Convertibles
Warrants - 
eurobond- diff currency
Eurosterling- non uk comp 
Bullet / balloon
Foreign bonds - issued by overseas com
Callable
Puttable
Debentures
131
Q

DMO hm treasury

A
  • carry out governments debt management policy of minimising costs over the long term, taking account of risk, whilst ensuring consistency with monetary policy
  • DMO approved investors
132
Q

PRA

A
  • promotes safety and soundness of firms it regulates

- insurers - degree if protection to policy holders

PCIAM (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions