Which statement about diversification in portfolio management is FALSE?

People generally invest their money to provide:

What are the DISADVANTAGES of investing in cash and deposits?

I. The safest type of investment.

II. They provide the lowest return.

III. There is reinvestment risk.

Which of the following are fixed-income securities?

I. Corporate bonds

II. Government bonds

III. Preferred shares

IV. Money Market instruments

V. Properties

Which of the following are types of corporate stocks?

I. Debenture Stocks

II. Government Stocks

III. Loan Stocks

IV. Money Market Instruments

V. Convertible Stocks

Which of the following investment options entitle the holder ownership and share of profits in the form of dividends?

Which of the following statements are the ADVANTAGES of money market instruments?

I. High liquidity

II. Long-term investment

III. Low returns

IV. Low risks

V. No-reinvestment risk

Which of the following statements are FALSE?

I. Higher capital gain is normally associated with lower risk.

II. One way to lower the risk in investment is to diversify.

III. One method of measuring risk is to determine the average return and its standard deviation from future data.

IV. Diversification can be achieved by investing in different countries and / or types of assets.

V. An investor can always choose an investment that is risk free.

Which of the following funds comprise a higher proportion of equity and a lower proportion of fixed-income instruments?

Factors to consider in buying Properties:

I. Quality of land

II. The location of land

III. The value of building on land

IV. The investment objective

V. Place of work

What are the basic types of real estate investment?

I. Rural Property

II. Domestic Property

III. Agricultural Property

IV. Commercial/Industrial Property

The amount of risk a person can take depends on:

I. Age

II. Investment objective

III. Financial condition

IV. Personality

Which of the following are the main characteristics of Variable Life insurance policies?

I. The policies can be used for investments, as a source of regular savings and protection.

II. The withdrawal and protection benefit are determined by the investment performance of the underlying assets.

III. The net withdrawal values of the policies are the gross withdrawal values shown in the policy which includes cash dividends up to the date of surrender, less all indebtedness includes interests.

Which statement about twisting is FALSE?

Which of the following statements are FALSE?

I. The policyholders may request a partial withdrawal of the policy and the amount will be met by cashing the units at the offer price.

II. The structure of charges and the investment content of a Variable life policy are specified in the policy document and the policy statement.

III. Some Variable Life policies grant loans to policyholders which is limited to a percentage of the cash value.

IV. Commissions and office expenses are met by a variety of implicit charges, some of which are variable.

Investing in bonds offers the following advantages EXCEPT:

A risk-return graph for the risk-return profile of cash funds, bond funds, balanced funds, managed funds and equity funds will show that:

I. Higher returns have lower risk.

II. Higher returns have higher risk.

III. Equity funds are at the top end of the graph.

IV. Cash funds are less risky and are at the bottom end of the graph.

Which of the following information must NOT be conveyed to the client in the sale of variable life insurance policies?

Which of the following is NOT a characteristic of a Variable Life policy?

Which of the following statements about the feature of Regular Premium Variable Life Policy are TRUE?

I. Top-ups are usually allowed.

II. The level of cover can be varied.

III. Premium holidays are usually allowed.

Which statement is NOT TRUE about the benefits of investing in a Variable life insurance policy?

This type of plan provides the sum assured at a maturity date or at death of the life assured before the maturity date.

Which of the following statements describe the difference between Variable Life insurance products and Traditional participating products?

I. Variable life insurance products allow policyholders to change the premium payments but traditional participating life products do not.

II. Variable life insurance products can take the form of Whole Life or Endowment policies but Traditional life policies cannot.

III. Variable life insurance products allow the policyholders to pay future single premiums from time to time

Which are some of the flexibility features of Variable life insurance policies?

I. Partial Withdrawal

II. Variation in sum assured

III. Guaranteed withdrawal values

Which of the following statements about single premium variable life policies are TRUE?

I. There is no fixed term in a single premium variable life policy and therefore, it is technically whole life insurance.

II. Top-ups or single premium injections are allowed.

III. Policyholders have the flexibility of varying the life coverage.

The benefits of investing in variable life fund include:

I. Policyholders have access to a pooled and diversified portfolio of investment.

II. The policyholder can easily change the level of premium payments as the product design of variable life insurance policies have clear structures which cater separately for investment and insurance protection.

III. Policyholders can gain access to variable life funds managed by professional investment managers.

IV. The policyholder is relieved of the day to day administration of his investment.

The flexibility benefits of investing in variable life funds include:

I. Policyholders can easily change the level of sum insured and switch their investments between funds.

II. Policyholders can easily take premium holidays and add single premium top-ups.

III. Variable life insurance products have simple product design with a clear structure which caters separately to investment and insurance protection.

IV. Policyholders can easily change the level of their premium payment.

Term insurance _______________

Which of the following statements describe the difference between variable life products and participating products?

I. Variable life products allow policyholders to pay top-up premiums from time to time to buy more units for his account unlike traditional participating life policies.

II. Variable life products allow policyholders to take premium holiday unlike traditional participating life products.

III. Variable life products can take the form of whole life or endowment policies unlike traditional participating life products.

Which statement about rebating is FALSE?

Variable Life funds can be invested in any financial instrument including equity funds. Equity funds _________?

A UNIT TRUST is ____________

Your client is a 35 year-old male, earning P35,000 a month, has savings, and with moderate risk tolerance. What product would you recommend?

Risk in investment can be categorized into two. These are:

I. The risk of not losing some or all of a person’s initial investment.

II. The risk of rate of return on the investment not matching up to the individual’s expectation.

III. The risk of rate of return on the investment matching up to the individual’s expectation.

IV. The risk of losing some or all of a person’s initial investment.

In a Unit Trust investment, the duties of a Trustee include all of these EXCEPT:

To the Policyowners, administration benefits under variable life include:

Which statement best describes Variable Life?

With traditional participating life insurance products, the allocations to policyowners of dividends:

I. Are not directly linked to the investment performance of the life company.

II. Have already been smoothened.

III. Do not have the highs and lows of investment returns as in good investment years of the life company.

IV. Are not fixed at the inception of the policy but are greatly dependent on the investment performance of the life company.

Which contributes to specific risks?

I. The amount of corporate taxes the company pays

II. Fraud by Senior Management.

III. Leverage Ratio of the Company.

The benefits of investing in variable life funds are:

I. Variable life funds give the policyholder access to a pooled and diversified portfolio.

II. The policyholder can vary his premium payments, change the level of sum assured, add single premium top-ups and take premium holidays easily.

III. Variable life policyholders have the access to a pool of qualified and trained professional fund managers.

Which statements are FALSE regarding the difference between endowment policies and variable life policies?

I. The benefits and risks of endowment and variable life policies directly accrue to the policyholders.

II. The premiums and benefits of the endowment policies are stated at its inception while those of variable life policies are flexible as they are account driven.

III. Their policy values directly reflect the performance of the fund of the life company.

Diversification in investment involves

Three elements affect the accessibility of the funds. These are:

I. The age and attitude of investor toward risk.

II. The initial cost in setting up or buying into the investment.

III. The time horizon when the fund is needed.

IV. The cost or penalty of realizing the investment before its maturity period.

What are the DISADVANTAGES of investing in common shares?

I. Shares can become worthless if company becomes insolvent.

II. Investors are exposed to market and specific risks.

III. Dividends are paid not more than the fixed rates.

Which statement about cash is TRUE?

These statements are true EXCEPT

Which of the following is NOT a type of fixed income securities?

What are the ADVANTAGES of investing in preferred shares?

I. It has priority on company assets during dissolution.

II. Has a benefit of capital appreciation.

III. The shareholder has the right to a fixed dividend.

Which of the following investment options has all the advantages of capital appreciation, liquidity, and inflation hedge?