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Worksheets1. Chapter 1 - Theory (Quiz 1)
Total questions: 10
Worksheet time: 10mins
Unit trusts offer an effective way to pursue lifetime financial goals with advantages that would be difficult to achieve by lay persons who invest on their own. The advantages include:
I. On-going professional fund management
II. Diversification of assets with reduced risks
III. Can be bought and sold easily
IV. More favourable transaction costs for unit trusts due to large investment amount
V. Flexibility to switch between different type of funds (applicable to certain unit trusts)
I, II & III
I, II, III & IV
I, II, III, & V
All the optional answers are correct
One of the major benefits of investing in unit trusts is to gain access to the experience of a professional fund manager. Which term best describes a professional fund manager?
Someone who has bought and sold many investments in his lifetime
A friend who always recommends the best stocks to buy
Someone who always manages in excess of RM500 million
Someone who has been professionally trained in the field of fund management
Below is/are the responsibilities of UTMC, EXCEPT
Maintain proper accounting record of unit trust
lssue unit trust certificate or statement for unit holder
Process sales and repurchase unit trust
Act as custodian for the assets of unit trust
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
Which of the following is the most appropriate thing to do if you meet a person who has never invested in unit trusts and does not feel comfortable to invest in unit trusts?
Let the potential investor have a prospectus and walk through with her
Comfort her by letting her know that unit trust is an investment with no risk
Show her the marketing brochure and take them back as you need to show the brochure to another investor
Show her the excellent performance record of the unit trust fund and tell her that the performance will repeat in the future
The main purpose of a prospectus is:
To provide potential and existing investors with all the necessary information to make an informed decision
To outline the marketing plan of the unit trust scheme
To highlight the projected returns of the unit trust scheme
To outline the profile of the target investors
Responsibilities and obligations of UTMC:
I. process application
II. custodian of assets of unit trust scheme
III. maintain holder registrar
IV. regulates the unit trust industry
I, II, III & IV
I & III
I, III & IV
I only
Under whose name would the assets of unit trust scheme have registered?
Investor
Stockbroking company
Trustee
UTMC
Which of the following is true for a Deed?
I. Deed stipulates the rights and obligations of the manager, rights and duties of the trustee and the right of the unit holders
II. Deed stipulates the maximum fees UTMC can charge to investor
III. The life span of a deed is normally 10 years
IV. Deed must be registered with Securities Commission.
I, II, IV
I, II, III
III only
All the optional answers are correct
What is the principal documents that governs the UTS?
Certificate of Entitlement
Auditor Report
Deed
Investigating Accounting Report
