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Question 1

What are the 4 ways to measure risk?

Answer 1

Standard deviation (market volatility)

Alpa (Outperformance vs benchmark)

Beta (movement compared to market)

Sharpe ratio (return per unit of risk)

Question 2

List the different types of life assurances?

Answer 2

With profit fund (you invest into fund, you get returns and possible bonus)

Unitised profit fund (Similar to with profit fund, you get units instead)

Unit linked fund (You buy units linked to movements of stock market, real time up and down)

Distribution bonds (regular payouts if you want more income focussed)

Question 3

What are the different endowment policies?

Answer 3

Life assurance, term assurance, unit linked endowment policy and surrender value.

Question 4

There are three split capital investment trust terms you need to know. What are they?

Answer 4

Redemption yield- how much you would make if held to maturity

Hurdle rate- minimum amount needed for firm before paying investors

redemption- total investors will make at the end of an Itrust life.