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CISI International Certificate in Wealth & Investment Management Sample Questions (Q67-Q72):
NEW QUESTION # 67
The ongoing charges figure for a mutual fund should be included in its:
- A. Terms of business
- B. Prospectus
- C. Key features document
- D. Key investor information document
Answer: D
Explanation:
The ongoing charges figure (OCF) of a mutual fund is included in its Key Investor Information Document (KIID). The KIID provides standardized and essential information about a fund's costs, risks, and performance, ensuring transparency for investors.
NEW QUESTION # 68
Negotiable bearer securities issued by commercial banks in exchange for fixed-term deposits are known as:
- A. Commercial Paper
- B. Certificates of Deposit
- C. Bills of Exchange
- D. Treasury Bills
Answer: B
Explanation:
A Certificate of Deposit (CD) is a negotiable bearer security issued by banks, representing a fixed-term deposit with a specified interest rate.
* Key Features of CDs:
* Issued by commercial banks.
* Fixed-term investment (e.g., 3 months to 1 year).
* Can be traded in secondary markets, making them a liquid investment.
* Why Not Other Options?
* A (Treasury Bills) # Issued by governments, not banks.
* B (Commercial Paper) # Issued by corporations, not banks.
* C (Bills of Exchange) # Used for trade finance, not fixed-term deposits.
# Reference: Bank of England (Certificates of Deposit), CISI Wealth & Investment Management.
NEW QUESTION # 69
A market that employs an electronic order book to match buyers with sellers in strict order by price is known as:
- A. Quote-driven
- B. Order-driven
- C. On-exchange
- D. Over-the-counter
Answer: B
Explanation:
An order-driven market relies on an electronic order book to match buy and sell orders based purely on price and time priority.
* Example: The London Stock Exchange (LSE) uses SETS (Stock Exchange Electronic Trading Service) for order-driven trading.
* Key Features:
* Buyers and sellers place limit orders and market orders.
* No market makers-orders are matched electronically.
* Used for high-liquidity securities.
# Reference: LSE Trading Mechanisms, CISI Wealth & Investment Management.
NEW QUESTION # 70
Once an offshore foundation is established, who will normally be responsible for making ongoing decisions regarding the operational use of the foundation's assets?
- A. The beneficiaries
- B. The board of directors
- C. The trustees
- D. The council
Answer: D
Explanation:
# Reference: Offshore Financial Centres (OFCs), CISI Wealth & Investment Management.
NEW QUESTION # 71
Which index tracking method requires a swap agreement?
- A. Synthetic Replication
- B. Stratified Sampling
- C. Optimisation
- D. Full replication
Answer: A
Explanation:
Synthetic replication involves tracking an index using derivatives such as swaps. A swap agreement allows the fund to replicate the index performance without holding the actual underlying assets, reducing transaction costs and increasing efficiency.
NEW QUESTION # 72
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