Wealth Mangement

Day-1 / Quiz -1

1. Specific needs of high net worth individuals and general retail investors
that cannot be met by standardised financial instruments available in the
market are met with _____________________.
A. Derivatives
B. Collective Investment Schemes
C. Structured Products
D. None of the above options

2. Services of this category of banks are normally targeted at clients with a

minimum sum of investible cash or minimum net worth.
A. Commercial banks
B. Investment banks
C. Public banks
D. Private banks

3. Which of the following are valid goals of wealth management?

A. Helping clients become wealthy
B. Gracefully accepting losses
C. Preserving and enhancing a clients wealth
D. Ensuring the client earns more than what fund management
might offer.

4. Which of the following statements reflects wealth management as a

business?
A. Standardised Products
B. Investment in mutual funds
C. High-end banking
D. Tailor-made solutions

5. Which of the following is NOT a part of wealth management services

bouquet?
A. Customised banking products
B. Investment Management
C. Trusts and Estate Planning
D. Tax and Estate Planning
E. Checking Accounts
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 Day-1 / Quiz -2

6. Which details about the client are necessary to obtain for an adviser to
the able to determine the client needs?
A. Assets and Liabilities
B. Family assurance or protection plans
C. Family circumstances
D. Health status
E. Future plans and expectations
F. All of the above

7. Which of the following is true?

A. The bank makes recommendations and investors decide
B. The investors makes decisions and the bank carries them out
C. The bank decides on its own regarding the clients investments
D. Any of these is possible

8. Which of the following situations is a clear case of conflict of interest?

A. The salesperson advises buying an investment which her own
firm is also buying for itself
B. The salesperson advises buying an investment which her own
firm is not buying for itself
C. The salesperson advises buying an investment which her own
firm is selling for itself
D. The salesperson advises buying an investment which her own
firm does not own

9. Which of the following makes wealth management an attractive business

for banks?
A. Earning margin on deposits placed with banks
B. Earning brokerage and commissions on trades
C. Earning investment management fees
D. Earning low-risk margins on the loans taken against assets
E. All of the given options

10. An advisor has a fiduciary duty to the client that requires him to observe
the highest standards of personal conduct and fully respect the
confidence and trust implicit in that relationship.
A. True
B. False

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11. Which of the following is NOT the responsibility of an investment advisor -
wealth manager?
A. Help clients to decide on and prioritise objectives
B. Document the client
C. Determine and agree an appropriate investment strategy
D. Maximising client returns by investing in potentially high return
investments
E. Act on behalf of the client
F. Where agreed, to keep the products under review.

Day-1 / Quiz -3

12. Which of the following products are targeted at High Net Worth
Individuals (NRIs)?
A. Relationship banking
B. Private banking
C. Preferred Banking
D. Priority Banking
E. Wealth Management
F. All of the above

13. Which of the following is true of the scope of operations of a typical large
retail bank?
A. It will not offer additional products like asset management and
insurance
B. It will offer additional products like asset management and
insurance
C. It will offer insurance but not asset management
D. It will offer asset management but not insurance

14. This is done for ensuring that an individual takes appropriate steps to
ensure that their accumulated wealth passes to their intended
beneficiaries and in as tax-efficient a method as possible.
A. Tax planning
B. Estate planning
C. Trust planning
D. Beneficiary planning

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15. Which of the following does not reflect a sub-category of client in wealth
management?
A. Mass retail
B. Mass affluent
C. High net worth
D. Ultra high net worth

16. The creation of various products with combinations of risk and returns is
important to __________________.
A. Savers looking to invest
B. Businesses looking for various forms of capital
C. Both savers as well as businesses
D. Show that the economy is vibrant

17. Services of this category of banks are normally targeted at clients with a
certain minimum sum of investible cash or minimum net work.
A. Commercial banks
B. Investment banks
C. Public banks
D. Private banks

18. Which of the following range of offerings reflect the select world of wealth
management?
A. A narrow range of products
B. A wide range of products
C. A select range of products
D. A few high end products

Day-1 / Quiz - 4

19. The ________________ market provides capital to the issuer and the
____________ market provides liquidity to the investors.
A. Primary / Secondary
B. Secondary / Primary
C. Primary / Primary
D. Secondary / Secondary
E. None of the above

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20. The source of capital when business is proven to be technically viable but
commercial production is yet to begin is _________________.
A. Angel investors
B. Venture capitalists
C. Private equity
D. IPO market

21. Owners of shares are exposed to ____________.

A. Market / Price risk
B. Liquidity risk
C. Issuer risk
D. All of the above

22. Corporate benefits such as dividends accrue to those shareholders who

are on the registers of the company as on ___________ date.
A. Ex-date
B. Record date
C. IPO date
D. Declaration date

23. Investors in a public limited company have ______________ liability

towards the companys financial failure.
A. Unlimited
B. Zero
C. Limited
D. Absolute

24. If a company has totally 1000 shares and Mr. X owns 250 of them, then
___________.
A. He is 250% owner.
B. He is 2.5% owner
C. He is 25% owner
D. He has full ownership
E. He has no ownership

25. Which of the following represents liquidity as an investor requirement?

A. Money available for the short term
B. Money available for investment
C. Money which is needed in the immediate period
D. Money which is needed in the long run

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26. As a wealth management professional an assessment of the direction of
the economy ________________.
A. Adds to the confusing excess of information already prevalent
B. Helps target clients
C. Helps access investment strategies and asset allocation.

27. The decision to allocate your investments among various asset classes is
known as _________________.
A. Asset allocation
B. Stock picking
C. Class allocation
D. Class grouping

28. A wealth management client is seeking maximum return through a broad

range of investment strategies that may involve a high level of risk. The
adviser will classify this clients investment objective as
_____________________.
A. Income
B. Income and Growth
C. Growth
D. Outright Growth

Day - 2 / Quiz - 1

29. The financial services provider engaged in selling mutual fund units is
known as _________________.
A. Sell-side
B. Buy-side

30. Which part of the investment bank brokerage house interacts with
clients in the trade life cycle?
A. Front office
B. Middle office
C. Back office
D. All of the above
E. None of the above

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31. This mechanism enables the entire trade process for capital markets and
payment transactions to be conducted electronically without the need for
re-keying or manual intervention - subject to legal and regulatory
restrictions.
A. Straight-Through-Processing (STP)
B. Central Counter-party Clearing (CCP)
C. SWIFT
D. Financial Information Exchange (FIX)

32. Which of the following differentiates the exchange system from other
types of the market?
A. Availability of Trade Settlement
B. Guaranteed Trade Settlement
C. Services of Broker-Dealers
D. Electronic Trading Platforms

33. In a Trade Life Cycle _______________ denotes determining buy-sell

obligations of exchange members.
A. Order Initiation
B. Order Routing
C. Clearing
D. Settlement
E. Payment

34. Securities market prefers netting because __________________.

A. It reduces work
B. It reduces counter-party risk
C. It increases returns on investment
D. All of the above

35. This is a process whereby securities are delivered against payment of

money to fulfil contractual obligations.
A. Settlement
B. Clearing
C. Pay-Out
D. Pay-In

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36. This refers to any trading platform or method by which the firm
completes buy-sell orders in the market place.
A. Trading system
B. Buying system
C. Selling system
D. Margin system

37. Which part of the Investment bank brokerage house is responsible for
risk management and order routing?
A. Front office
B. Middle office
C. Back office

38. Which of the following can be potential reason for trades fail?
A. Instructions not received by custodians
B. Instructions remain unmatched on value date
C. Insufficient cash collateral credit line
D. Insufficient securities
E. All of the given options

Day - 3 / Quiz - 1

39. In legal entity terms - the fund is structured in the form of

__________________.
A. Unit trusts
B. Investment companies
C. Both A and B
D. Neither A nor B

40. The fund that invests primarily in Government Securities is known as

__________________.
A. Cash fund
B. Bond fund
C. Gilt fund
D. Equity fund

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41. This is the price at which investors can enter or exit an open ended fund.
A. Fund value
B. Sum of stocks value
C. Net investment value
D. Net Asset value

42. When a Hedge Fund goes insolvent _______________.

A. Investors losses are limited to original investment
B. Investors losses are infinite
C. Fund manager losses money
D. Investors do not lose money

43. Which of the following is NOT a feature of a typical Hedge Fund?

A. They are unregulated collective investment schemes
B. They have high investment entry levels
C. Hedge fund manager levy performance related fees
D. They are listed on a stock exchange.

44. This allows investors to buy an entire basket of stocks through a single
security.
A. Provident
B. Exchange Traded Funds (ETF)
C. Hedge Fund
D. Pension Fund

45. Which of the following is not a feature of Investment Mandate for an

investment manager?
A. It specifies the investment style
B. It specifies the asset classes in which investment is permitted
C. It specifies percentage allocation to each asset class
D. It specifies indicative returns

46. Collective Investment Schemes such as Mutual Funds are administered

by a __________________.
A. Fund Manager
B. Account Manager
C. General Manager
D. Exchange Manager

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47. For managing the fund, the Hedge Fund Manager charges ____________.
A. Fund Management Fees
B. Share in Profits
C. Both
D. None of the above

48. Hedge Funds are not marketed to private individuals because they are
considered too risky for the less financially sophisticated investors.
A. True
B. False

49. The fund that invests primarily in short-term money market

instruments is known as ________________.
A. Cash Fund
B. Index Fund
C. Sectoral Fund
D. Equity Fund

50. The fund that invests primarily in stocks of particular sectors such as IT
or Pharma etc., is known as ________________.
A. Cash Fund
B. Index Fund
C. Sectoral Fund
D. Equity Fund

51. A ______________ is a state owned investment fund composed of financial

assets such as stocks, bonds, or other financial instruments and invests
globally.
A. Hedge Fund
B. Mutual Fund
C. International Fund
D. Sovereign Wealth Fund

52. A fund of Hedge Fund is ________________.

A. A fund which invests in other funds
B. A fund in which other funds have invested
C. Available only in the Hedge Fund world
D. A long only fund

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53. These are the high risk funds which try to perform regardless of market
situations.
A. Mutual Funds
B. Pension Funds
C. Hedge Funds
D. Exchange-Traded Funds

Day - 3 / Quiz - 2

54. This financial institution holds customers securities for safekeeping so as

to minimise the risk of their theft or loss.
A. Stock brokerage
B. Custodian
C. Investment bank
D. Stock exchange
E. Regulatory

55. Exchange of securities against funds when the large financial institutions
transact (bought or sold) securities is typically carried out by
___________________.
A. Custodial banks
B. Exchange
C. Depositories

56. Which of the following services are offered by Global Custodians?

A. Safekeeping of a variety of securities in a range of jurisdictions.
B. Making arrangement for the receipt and delivery of securities
and cash
C. Collecting and repatriating dividends and interest
D. Notifying clients of corporate actions and executing their
instructions
E. All of the above

57. The entity processing cross border securities trades keeping financial
assets safe and servicing the associated portfolios is __________.
A. Depository
B. Global Custodian
C. Exchange
D. Regulator

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58. The main Central Securities Depository in the U.S. is the
___________________, which is responsible for corporate stock, bonds,
municipal bonds and money market instruments.
A. Euroclear
B. JASDEC
C. LCH.Clearnet
D. Depository Trust Company (DTC)

59. Custodians provide services to _________________.

A. Mutual Funds
B. Investment Managers
C. Retirement Plans
D. Bank Fiduciary and Agency Accounts
E. All of the above

60. Which of the following services are provided by the Custodian Banks?
A. Settlement Services
B. Asset Services
C. A and B
D. None of the above

61. Which of the value added services do custodians provide to their clients?
A. Valuation
B. Performance Management
C. Tax reclaims processing
D. Compliance reporting
E. Securities Lending
F. All of the above

Day - 4 / Quiz - 1

62. Which of the following is a non-cash Corporate Action?

A. Dividend payment
B. Coupon payment
C. Stock mergers
D. Redemption of matured investments

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63. The Corporate Actions that have a direct financial impact on the
shareholders and bondholders is called ________________.
A. Cash CA
B. Non-Cash CA
C. One-Off CA
D. None of the above

64. The entity processing cross-border securities trade - keeping financial

assets safe and servicing the associated portfolio is called ____________.
A. Depository
B. Global Custodian
C. Exchange
D. Regulator

65. In Corporate Action Lifecycle event settlement and reconciliation is

___________ stage.
A. Computing entitlements
B. Response gathering and instructions
C. Information gathering stage
D. Post payment reconciliation

66. Cash distribution of profits earned by the company to its shareholders is

called _____________________.
A. Bonus
B. Rights
C. Profit-Sharing
D. Dividend

67. The income statement of a custodian shows earnings from

______________.
A. Assets taken over by the custodian
B. Extra money left in the account by customers
C. Appropriation of excess securities of customers
D. Fees charged for custodial services.

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68. When a company announces a corporate action registered shareholders
are informed about the event by the companys __________________.
A. Investment banker
B. Broker
C. Company Secretary
D. Registrar

69. The concept of Stock Lending facilitates _______________.

A. Stock trading
B. Derivatives trading
C. Buying on margin
D. Short Selling

70. FATCA is an effort to combat ____________ by U.S. through the use of

offshore accounts and offshore intermediaries.
A. Insurance Premium avoidance
B. Tax avoidance
C. Money laundering
D. None of the given options.

71. Corporate Action data vendors use __________ messaging network to

stream Corporate Action related data.
A. SWIFT
B. Instant
C. Telephone
D. Android

72. Which of the following is not a core function of a Custodian?

A. Safe keeping of cash and securities
B. Settlement
C. Investment Research
D. Record keeping
E. Asset servicing
F. Reporting

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73. This is a type of Corporate Action initiated by the corporation that affects
all shareholders and participation of shareholders is mandatory.
A. Mandatory CA
B. Voluntary
C. Mandatory with Options
D. Statutory CA

74. Company ABC Inc., goes in for a spin-off of its telecom infrastructure
subsidiary. What type of corporate action is ABC Inc., going in for?
A. Return of Profits
B. Influence the stock price
C. Corporate Restructuring

75. A centralised location in which security certificates are placed and stored
for later transfer is known as __________________.
A. Central Depository
B. Custodian
C. Exchange

76. Repos and SBL are in essence

A. Very similar if the collateral in some other security
B. Very similar if the collateral is cash
C. Different
D. Same in flows but the structure is different

77. Collateral for SBL transactions in most geographies of the world is

___________________.
A. A minimum of 100%
B. Exactly 100%
C. Can be any number acceptable to the lender
D. Unregulated

78. Extent of lending to one counter-party level is typically restricted to

A. The borrowing counter-party
B. The issuer of the collateral accepted
C. Either of these
D. Both of these

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79. The value of the collateral can change due to
A. Change in the market prices only
B. Change in current rates only
C. Both of these where cross border exposures are involved

80. Manufactured Dividend in the normal course is ______________.

A. Payable by lender to borrower
B. Collateral acceptor to collateral giver
C. Payable by borrower to lender
D. Any of these

81. When a custodian lends securities as agent of more than one customer,
segregation refers to ________________.
A. Keeping securities separate in a physical sense
B. Knowing which securities are the subject of lending in a legal
sense
C. Keeping securities in a legal sense
D. Knowing which securities are the subject of borrowing in a legal
sense

82. Insolvency of a security borrower in SBL:

A. Requires insolvency proceedings
B. Is an automatic event of default

83. Which of the following asset does not qualify as collateral for the purpose
of Securities Lending?
A. Cash
B. Securities
C. Assets in kind
D. Letter of Credit

84. In the context of securities lending - a custodian is most likely a

______________ of the security.
A. Beneficial owner
B. Agent lender
C. Borrower
D. End User

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85. Who among the following are not the lenders of securities (on the supply
side of the securities)?
A. Investment funds
B. Pension funds
C. Prime Brokers
D. Insurance Companies

86. Who among the following are typically the end users of the borrowed
stocks?
A. Hedge funds
B. Mutual funds
C. Proprietary traders
D. All of the given options

87. This mechanism facilitates the members to meet the settlement

obligations by borrowing the securities from the members willing to lend
securities.
A. Automatic lending and borrowing mechanism
B. Stock borrow program
C. A and B
D. Collateralised borrowing and lending mechanism
E. Stock loan mechanism

88. In which case is the interest rate risk highest?

A. Bonds issued by weak borrowers
B. Long dated bonds
C. Short dated bonds
D. Bonds issued by strong borrowers

89. The infeasibility of certain investment options based on the investment

horizon of the client can also be understood as _________________.
A. Asset allocation
B. Liquidity planning
C. Risk planning
D. Feasibility planning

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90. Which of the following represents lowest risk?
A. A highly diversified portfolio of high risk instruments
B. Owning a single stock
C. A thinly diversified portfolio of high risk instruments
D. Owning a randomly selected portfolio of stocks

91. This risk cannot be diversified away.

A. Systematic risk
B. Specific risk
C. Non-systematic risk
D. None of these

92. Between a AAA rated bond and a BBB rated bond which of the following
is true?
A. AAA is safer and BBB will provide lower returns
B. BBB is safer and AAA will provide lower returns
C. AAA is safer and BBB will provide higher returns
D. BBB is safer and AAA will provide higher returns

93. Which of the following hampers portfolio diversification?

A. If stocks in the portfolio are inversely correlated
B. If stocks in the portfolio are strong correlated
C. If stocks are inversely related to market
D. If stocks are directly related to market

94. Diversification of equities and that of bonds are ___________.

A. Similar because both involve investing in a wider range
B. Different because in equity price risk is being diversified while in
bonds it is interest rate risk
C. Different because in bonds price risk is being diversified while in
equity it is interest rate risk
D. Similar because both are based on portfolio theory

95. The risk of price movements in a one stock is called ___________.

A. Systemic risk
B. Specific risk
C. Non-systemic risk
D. None of the above

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96. The challenge in portfolio rebalancing is in finding _______________.
A. When to buy and sell
B. A portfolio manager who knows this concept
C. Assessing inflexion points in the market
D. The best investment strategy

97. In managed portfolios asset allocation ______________.

A. Is pre-determined
B. Is decided dynamically
C. Is managed by the client
D. Is managed by the fund manager

98. Discretionary portfolios operate on the basis of _______________.

A. Discretion of the client
B. Discretion of the portfolio manager
C. Discretion of the fund
D. Discretion of the market

99. Which of the following is a valid statement?

A. Highly diversified portfolio offers better returns
B. Concentrated portfolios offer better returns
C. Highly diversified portfolios are more risky
D. Concentrated portfolios are less risky

100.

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