THINGS I GOT WRONG

Question 1

How to calculate flat yield

Answer 1

coupon payment / price paid

Question 2

What is a “registered title”, when relating to quoted equities?

Answer 2

Shareholder name shown on company register

Question 3

What type of product can be used to offset the risk that the price will rise before you can make the purchase?

Answer 3

Future

Question 4

The spread of a unit trust is the difference between what?

Answer 4

The selling and buying prices of the units

Question 5

What type of legal structure is an investment trust?

Answer 5

Limited company

Question 6

What do firms have to do to give individuals rights to to obtain information about themselves?

Answer 6

They have to respond to subject access requests

Question 7

What is the MAXIMUM compensation award the Financial Ombudsman can pay out?

Answer 7

£355,000

Question 8

What short term borrowing arrangement is funded through a current account?

Answer 8

Overdraft

Question 9

Which city does the trading of eurobonds primarily take place in?

Answer 9

London

Question 10

What is a key characteristic of an investment trust?

Answer 10

It has a fixed share capital - as it is a company, not a trust

Question 11

What is a key difference between money laundering and terrorist financing?

Answer 11

Sums of money are smaller in terrorist financing

Question 12

What is the function of a central bank?

Answer 12

Controlling the money supply

Question 13

What is the main aim of financial services regulators?

Answer 13

Reduce systemic risk

Question 14

What is the unit trust managers principal role?

Answer 14

Decides where the money is invested.

Question 15

Who oversees the actions of the unit trust manager?

Answer 15

The trustee

Question 16

A UCITS fund investor information document must include:

Answer 16

Ongoing charges figure
Audit fees

Question 17

What is a specific feature of credit card borrowing?

Answer 17

Balances can be transferred.

Question 18

Which document sets out the relationship between a company and its shareholders?

Answer 18

Articles of Association

Question 19

What does the memorandum of association state?

Answer 19

Company name, registered office, share capital, plc/llc

Question 20

How much of a REITs profits have to be reinvested for it to maintain it’s tax status?

Answer 20

90%

Question 21

Do government bonds fall under insider dealing legislation?

Answer 21

Yes

Question 22

What does SIPP stand for?

Answer 22

Self-invested personal pension

Question 23

What are covered bonds?

Answer 23

A type of asset backed security that have to stay on the company balance sheet.