UUTB Quiz - Chapter 3

In Year 1995, Encik Jamal put RM50,000 in an investment that earned him 9.0% per annum. Suppose the investment is able to deliver the above yearly return for the past as well as the coming years, when will his money double?

• Year 2000

• Year 2003

• Year 2005

• Year 2007

Given data:

I. No. of units held before unit split: 18,000 units

II. Total value of the investment before unit split: RM6,000

III. Unit split ratio: 1 for 3

What is her total investment value after the unit-split exercise?

• RM2,000

• RM6,000

• RM8,000

• None of the optional answers is correct

What happens when a unit split of 1:2 is declared?

• The unit price doubled

• The units in circulation doubled

• The unit price decreases proportionately

• None of the optional answer is correct

A unit split in effect does not add value to the unit trust investors’ investment holding, but________.

• Makes sure that the fund managers are able to earn their fees

• Is used by unit trust management company to lower the NAV per unit, thus enabling new investors to invest in the fund

• Is used to enlarge the fund size in Ringgit term

• Is used to re-classify the fund to “Penny-Stocks” fund

How do investors overcome the impact of inflation?

• By reducing the tax rate

• Investors need to preserve the purchasing power of the original investment

• Hope to earn a return that is less than the inflation rate

• None of the optional answers are correct