UUTB Quiz - Chapter 1

Puan Rose decided to withdraw some of her savings to invest in unit trusts. She would like to invest all of her money in a fund at one time and let it grow irrespective of the market condition. Whereas for Puan Sarina, she has very little savings but every month she is willing to cut some of her expenses and invests in unit trusts. Name the respective ways that can be used by them to invest in unit trusts.

• Spot and Instalment Plans

• Lump Sum Investment and Regular Savings Plan

• Lump Sum Investment and Contractual Plans

• Fixed Investment and Instalment Plans

Generally, what are the possible forms of return on investment can an investor expect from investing in unit trusts?

I. Distribution

II. Capital appreciation

III. Interest Income

• I & II

• I & III

• II & III

• All of the optional answers are correct

Dollar-Cost Averaging is:

• A strategy that entails buying low and selling high

• A way to purchase unit trust funds and minimize the service charge

• A systematic way of regular investment with fixed amount of money

• A way to sell unit trust funds and to minimize the capital gains

Which of the following is not the right of unit holders?

• To obtain information about the unit trust scheme and its performance

• To receive profile of board of directors

• To redeem units

• To select shares for the unit trust scheme’s portfolio

What is the most important benefit you will get from creating a diversified portfolio that includes stocks, bonds and money market funds?

• A guarantee that your portfolio won’t suffer if the stock market falls

• Higher returns than you will get from a portfolio that isn’t diversified

• The ability to balance both risks and returns in achieving your financial goals

• All of the optional answers are correct

The best way for investors to minimize the impact of the initial service charge on unit trust investments is to:

• Buy and sell units as they can

• Invest as regular as possible and avoid lump-sum investments

• Adhere to a long-term buy and hold strategy; making sure that the units purchases match their long-term investment objectives

• Only purchase aggressive growth fund

Which of the following should be included in the computation of net asset value of a unit trust fund?

• The value of the equity investments in the unit trust scheme

• Trustee fees

• Auditors’ fees

• All of the above

An investor had invested a single amount of money in a unit trust fund at RM 0.80 per unit in the first year and subsequent purchase another 20,000 units in second year. At the end of third year, he decided to redeem all his investment at Buying price RM 0.90 per unit and total proceed was RM 79,200.

How many units was he entitled for the investment he made in the first year?

• 68,000

• 79,200

• 88,000

• None of the above