Topic 7-9

Question 1

National Savings & Investments is one of the main asset classes.

Answer 1

False

Question 2

The most widely used type of direct investment is a deposit account.

Answer 2

True

Question 3

An investment bond is a means by which regular premiums are invested in a variety of dividend paying unitised funds

Answer 3

False

Question 4

There is a limit to the number of units that can be created by the manager of a unit trust.

Answer 4

False

Question 5

An investment trust is a public limited company whose shares are quoted on the stock exchange.

Answer 5

True

Question 6

Match the following statements with the appropriate product. (Pick only two)

Answer 6

Permanent interest-bearing shares : They are issued by building societies to raise capital.

Corporate bonds : They have a fixed redemption date.

Question 7

Match the appropriate taxation regime to the relevant product. (Pick only two)

Answer 7

National Savings and Investments Premium Bonds : Income is tax free.

Gilts : Interest is paid gross.

Question 8

Corporate bonds have a fixed redemption date, pay a variable rate of interest and can be bought and sold at prices that reflect market rates of interest.

Answer 8

False

Question 9

An offshore deposit that is denominated in euros is generally likely to expose the investor to greater risk than a similar onshore investment denominated in sterling.

Answer 9

True

Question 10

Match the following statements with the relevant type of share issue. (Pick only two)

Answer 10

Rights issue : A means of raising additional capital by offering additional shares to existing shareholders, generally at a discounted price.

Scrip issue : An issue of additional shares, free of charge, to existing shareholders which has the effect of proportionately reducing the price of shares already in issue.