things missed

Question 1

what is a feature of convertible bonds?

Answer 1

they are a cheaper source of finance

Question 2

what is an example of an instrument which has synthetic replication?

Answer 2

Swap

Question 3

what are the characteristics of investment trusts?

Answer 3

they are used for long-term borrowing and have fixed share capital

Question 4

what is a feature of imobolised bearers?

Answer 4

they are used for money laundering

Question 5

what is a characteristic of interest legs swaps?

Answer 5

one leg is fixed, other is floating

Question 6

what does a fund manager buy/sell to make profits?

Answer 6

sells future contracts, buys put options

Question 7

what are breeder documents?

Answer 7

identity theft

Question 8

what is a characteristic of a rights issue?

Answer 8

they are offered at discount, increases liquidity, brings lower share prices

Question 9

what is the term “exercised price” used for

Answer 9

option

Question 10

what does private equity allow individuals to do?

Answer 10

buy a direct stake in the company

Question 11

what are the features of hedge funds?

Answer 11

reduces market risk, has performance related fees, high fees

Question 12

what is the percentage for a high yield IA?

Answer 12

50%

Question 13

what is corporation tax used on?

Answer 13

adjusting profits

Question 14

what is a feature on money markets?

Answer 14

nominal value is preserved

Question 15

what will low employment cause?

Answer 15

increase gov income and decrease outgoings

Question 16

what are government bonds called?

Answer 16

strips

Question 17

what is the index for America tech?

Answer 17

NASDAQ COMPOSITE

Question 18

what are ordinary shares also called when the nominal value is paid?

Answer 18

Contributing shares

Question 19

who does the safekeeping of OEIC

Answer 19

Depositary

Question 20

what must new firms meet?

Answer 20

threshold conditions

Question 21

what do Index-linked bonds increase?

Answer 21

coupons and redemption amount

Question 22

how often do AGM need to be held?

Answer 22

Annually

Question 23

which type of instrument is treated as income rather than capital gains?

Answer 23

Investment trusts (real estate trusts)

Question 24

who does the registered title apply too?

Answer 24

the shareholders name on the company register in relation to shareholding

Question 25

how should ETF be priced?

Answer 25

Near their NAV

Question 26

what are the three exchange rate regimes?

Answer 26

target zone = exchange rate managed by a band crawling peg = has upper + lower limits managed = "dirty" float, occasional interference

Question 27

how are treasury bills issued? and commercial paper?

Answer 27

Issued at discount to par offered at zero-coupon

Question 28

how is settlement done on money markets?

Answer 28

Done by CREST, settled on the day or T+2

Question 29

The advantages of the money market? and risk?

Answer 29

investors get access to better assets, greater returns, MMM wont invest in funds unless AAA rating. But issuers risk

Question 30

differences between residential and commercial?

Answer 30

residential = landlord repairs, commercial = resident repairs residential = short leases, commercial = longer

Question 31

how can hedging be used?

Answer 31

selling future contracts and buying put options

Question 32

how is trading taken place on options?

Answer 32

Traded on the exchange if dealt on standardized terms, traded OTC for out of these terms

Question 33

how does trading take place for SWAPS?

Answer 33

Traded over-the-counter and negoatied between parties

Question 34

what does ICE futures Europe trade?

Answer 34

for UK derivatives, also trades (sugar, weed, cocoa)

Question 35

what does EUREX trade?

Answer 35

German deriviatives

Question 36

difference between OTC markets and Exchange markets

Answer 36

Exchange = standardized, involves intermediate central counterparty OTC = Traded directly between parties without exchange or brocker

Question 37

what does Intercontential markets trade?

Answer 37

ICE = electronics, energy, crude oil, jet fuel, electric power

Question 38

what does LME trade?

Answer 38

Plastics, aluminum, Tin, Zinc, Copper, Nickel, Lead

Question 39

what is single and dual pricing?

Answer 39

single = mid market single price (traditionally OEIC) dual = bid and offer price (traditionally AUT)

Question 40

in single pricing, how are costs recouped?

Answer 40

dilution levy

Question 41

what are the charges involved for OEIC, IT and AUT

Answer 41

UCITS in OCF = audit costs, registration, regulatory fees, does not include exit/initial fees or performance charges

Question 42

what does the TER of AMC include?

Answer 42

Performance related fees

Question 43

what's it called if shares include different share classes? what is zero-payment dividend

Answer 43

split-capital investment trust. zero-dividend payment = pays 0 dividends, gets return from difference in price paid and amount at future date.

Question 44

real-estate investment trust

Answer 44

investment that pools capital into residential and commercial property. no double taxation and REIT pay no PT or CGT, if 90% given to shareholders

Question 45

why do trading at discounts occur?

Answer 45

Markets view, or it could be winding-up, or merger/takeover happening

Question 46

what are the participants and roles in ETF

Answer 46

Authorized = financial institutions (create/redeem, maintains balance) Sponsor = (designing, manages)

Question 47

what are the different replication methods?

Answer 47

Physical = each part of index is traded with index weight optimization = using modern techniques synthetic replication = swap

Question 48

identity fraud and identity theft

Answer 48

IF = impersonating fraud, uses identify to obtain goods IT = Obtain goods by deception (documents, passport)

Question 49

what is the max sentence for bribery?

Answer 49

10 years

Question 50

what makes real-estate investment trusts less risky than direct property?

Answer 50

diversification

Question 51

what is the key structure of an offset mortgage?

Answer 51

the interest is charged on a reduced amount

Question 52

what happens in a buoyant economy

Answer 52

spending tends to be less than tax revenues

Question 53

why do firms seek commercial loans?

Answer 53

to buy new machinery

Question 54

why would firms increase their prices in short time?

Answer 54

high inflation

Question 55

why would decrease occur in cash deposit account?

Answer 55

inflation

Question 56

Baa to BA meaning

Answer 56

from investment grade to non-investment grade

Question 57

how often do UK government bonds get paid?

Answer 57

Half-yearly

Question 58

what does it mean if a bond is high quality?

Answer 58

it is the most liquid

Question 59

what is a short-term marketable security with a maturity up to five years and issued by commercial banks?

Answer 59

certificate of deposit = negotiable issued by commercial banks in exchange for fixed-term deposit

Question 60

what is a gig economy?

Answer 60

Treats workers as independent contractors

Question 61

what are fixed-income securities traded on?

Answer 61

SEATSq

Question 62

quote-drive system

Answer 62

provides bid and offer prices by market makers. It is used for NASDAQ and SEAQ

Question 63

order-driven system

Answer 63

provides market makers and electronic books. LSE SETS and NYSE