FCE Sample 1

A conventional scheme and Shariah-compliant scheme may differ in the following area(s): i. Objective(s) of the fund ii. Documentation iii. Accounts and reporting iv. Investment avenues and activities

• All of the above

• I

• I, II and III

• I and II

In a comprehensive investment planning engagement, a consultant should: I. determine the client's financial objectives and order of importance II. analyse the client's financial position and cash flow III. identify investment options that provide guaranteed future returns IV. determine the risk and return characteristics of the client's current investments

• I, II and IV

• All of the above

• II, III and IV

• I, II and III

Which of the following are loan financing risks? I. The higher the margin of financing, the greater the potential losses/gains II. The servicing of loan repayments may become more onerous when interest rates rise III. Lack of experience, knowledge and expertise, as well as poor management of the Scheme will cause the investor to default on the loan IV. There could be potential losses from fluctuating foreign exchange rates

• II and III

• II and IV

• I and II

• I and III

Which of the following scenarios could happen when an organisation fails to inculcate a strong compliance culture? I. Increased client complaints and costs of restitution II. Increased risk of litigation by clients III. Decreased number of clients due to inability to create trust and confidence IV. Enhanced consultants' professional standards

• I

• All of the above

• I and II

• I, II and III

An investor makes contributions in a series of smaller investments into a scheme. This best describes:

• Reinvestment

• EPF savings

• Lump Sum Purchase

• Regular Saving

The following are characteristics of investment-linked funds: I. They are subject to monitoring by a Trustee and scrutiny by the SC II. They must meet Securities Commission disclosure provisions III. They are under the purview of the SC and BNM IV. They are a type of Unit Trust Scheme

• I and IV

• I and III

• II and III

• None of the above

Harry is a financial planner who wants to do income-tax planning for his client John. John cannot provide details and needs to speak to his tax agent. What should Harry do?

• Refuse to speak to the tax agent

• Advise John to hire a new tax agent

• Request John to introduce him to the tax agent so he may interact directly

• Get John to act as intermediary between Harry and the tax agent

Which of the following PRS withdrawal scenarios are exempt from the 8% tax penalty? I. Member wants to pay for house renovation II. Member is leaving Malaysia permanently III. Member wants to repay a housing loan IV. Member wants to pay medical expenses for a seriously ill dependent

• I, III and IV

• II, III and IV

• II, III and VI

• I, II and III

Which of the following fees and charges can affect PRS members’ investment returns? I. Commission II. Annual management fees III. Annual trustee fee IV. Investment-linked product charges

• III and IV

• I and III

• I, II and III

• II and IV

Index Fund is also referred to as _____ due to its modus operandi of “tracking” an index.

• Tracker Fund

• Securities Fund

• Composite Index

• Mixed Asset