Beruflich Dokumente
Kultur Dokumente
CEILI - SET 2
Anticipated Questions with Answers
1
A
B
C
D
2
Risk can be classified into two particular categories in relation to investment. They include
_________________.
I.
II.
III.
IV.
A
B
C
D
3
I & II
I & III
II & IV
III & IV
A
B
C
D
4
reducing the risks of investment by putting the fund under management into several
categories of investment
reducing the risks of investment by putting all ones eggs in one basket
putting all the funds under management into one category of investment
spreading the risks of investment by not putting the fund into several categories of
investment
I.
II.
III.
IV.
A
B
C
D
I, II & III
I, III & IV
I, II & IV
II, III & IV
Page 1
Three elements affect the accessibility of the funds. They include __________________.
I.
II.
III.
IV.
A
B
C
D
6
I, II & III
I, II & IV
I, III & IV
II, III & IV
I.
II.
III.
IV.
A
B
C
D
7
warrants give the holder the option to subscribe for ordinary shares at a
predetermined conversion ratio
warrants give the holder the option to subscribe for ordinary shares at a
predetermined exercise price
warrants are usually detached from the loan stock and traded separately in
securities market
warrants are issued on their own
I
I, II & III
I, III & IV
I, II, III & IV
The following characteristics of shares at a predetermined conversion ratio warrants are true,
EXCEPT
A
B
C
D
8
warrants gives the holder the option to subscribe for ordinary shares at a
predetermined conversion ratio
warrants gives the holder the option to subscribe for ordinary shares at a
predetermined exercise price
the life span of a warrant can be varied at the discretion of the holder
the option attached to the warrants can be exercise by subscribing for ordinary shares
in cash, by exchanging the loan stock or by a combination of both
A
B
C
D
investor have to put in a large initial outlay to establish an exposure to the shares
on expiry, warrants which are not exercised lose their value completely
like ordinary shares, there is no chance for price recovery
by selling the warrants given to an investor in the first instance; the investor cannot
benefit from the capital gain
Page 2
Rank the following investment vehicle in terms of their level of risks, from the least risky to the
most risky.
I.
II.
III.
IV.
A
B
C
D
10
I, III, IV & II
I, IV, III & II
I, II, III & IV
I, IV, II & III
A
B
C
D
11
I.
II.
III.
A
B
C
D
12
I, II
I, III
II, III
I, II & III
I.
II.
III.
A
B
C
D
13
I, II
I, III
II, III
I, II & III
Which one of the following investment vehicles are for capital appreciation purpose?
A
B
C
D
Page 3
14
I.
II.
III.
A
B
C
D
15
B
C
D
A
B
C
D
18
17
I, II
I, III
II, III
I, II & III
A
B
C
D
16
markets which quote prices referred to the current market price of an item available for
immediate delivery
markets for deferred delivery of commodities
markets that are traceable only from the late 20 century
known to establish forward contracts featuring the contract price and future delivery
dates
Which of the following fixed income securities yield the highest return?
A
B
C
D
government bonds
corporate bonds
convertible bonds
unsecured non-convertible bonds
Page 4
Which of the following statements about fixed income securities are FALSE?
I.
II.
III.
A
B
C
D
20
cash
bond
futures
ordinary shares
23
Which of the following investment options has all the advantages of capital appreciation,
liquidity and inflation hedge?
A
B
C
D
22
I & II
I & III
II & III
I, II & III
A
B
C
D
21
one whereby investor buy units in the trust itself and not shares in the company
an organisation registered under the Societies Act which usually invests in a wide
range of equities and other investment
a closed-end fund and does not have to dispose off its assets if large number of
investors sell their shares
established by a trust deed which enables a trustee to hold the pool of money and
assets in trust on behalf of the investor
Which one of the following statements about diversification in portfolio management is FALSE?
A
B
C
D
Page 5
A
B
C
D
25
A
B
C
D
26
B
C
D
provides for payment of the sum assured when the life assured survives a specific
period
is one that if the life assured survives the specified period, the policy ceases and no
return of premiums is given
is the most complex and expensive of all the life insurance
provides for surrender or cash values on early termination of the insurance
Whole life and endowment policies are known as ______________________, because they
may be for a guaranteed return only.
A
B
C
D
29
ensuring that the fund manager adhere to the provision of the trusts deeds
acting generally to protect the unit-holders
holding the pool of money and assets in trust on behalf of the investors
managing the portfolio of investments and administering the buying and selling of
shares in the unit trust itself
28
A
B
C
D
27
The first new generation investment-linked life insurance product was ______________.
A
B
C
D
Page 6
The introduction of the _____________________ is one of the factors which contributed to the
expansion of the investment-linked insurance business in Singapore.
A
B
C
D
31
the formation of the Investment Scheme by the Central Provident fund in 1997
the requirement of the Securities Exchange Act 1934 that all insurance agents and
agency office employees dealing in variable life insurance must pass an examination in
securities business
the introduction of the Enhanced Investment Scheme by the Central Provident fund in
1993
the regulation of investment companies management and operation including that of
insurance companies underwriting variable life
I.
II.
III.
IV.
A
B
C
D
32
I, II & III
I, II & IV
I, III & IV
II, III & IV
Apart from the investment management charges, what other kind of charges do single premium
investment-linked policy charge?
I.
II.
III.
A
B
C
D
33
policy fees
administrative and mortality charges
assurance charges
I & II
I & III
II & III
I, II & III
I.
II.
III.
IV.
A
B
C
D
I, II & III
I, II & IV
I, III & IV
II, III & IV
Page 7
34
The initial units form of charge under the investment-linked life insurance policies _________.
I.
II.
III.
IV.
A
B
C
D
35
I, II & III
I, II & IV
I, III & IV
II, III & IV
A
B
C
D
36
I.
II.
III.
IV.
A
B
C
D
premium top-ups and holidays, subject to the life offices administrative rules
are usually allowed
life protection is the main objective of the plan with investment as a nominal
purpose
withdrawals and surrenders, usually after the payment of a few years premium
are allowed
a one-off premium contribution is made to the policy which uses the premium
to purchase units in an investment-linked fund and to provide certain level life
cover
I, II & III
I, II & IV
I, III & IV
II, III & IV
Page 8
I.
its cash value and protection benefits are determined by the investment
performance of the underlying assets
its protection costs are generally met by implicit charges
its commissions and office expenses are met by a variety of explicit charges
with normally 6 months notice given by the life offices prior to any change
its cash value is normally the value of units allocated to the policyowner,
calculated at the bid price
II.
III.
IV.
A
B
C
D
38
I, II & III
I, II & IV
I, III & IV
II, III & IV
Which of the following statements about the characteristics of investment-linked policies are
TRUE?
I.
II.
III.
A
B
C
D
39
I & II
I & III
II & III
I, II & III
Which of the following is/are the main characteristic(s) of investment-linked life policies?
I.
the policies can be used for investment, as source of regular savings and
protection
the cash values and protection benefits are determined by the investment
performance of the underlying assets
the net cash values of the policies are the gross cash values shown in the
policy that includes reversionary bonus up to the date of surrender, less all
indebtedness include interest
II.
III.
A
B
C
D
40
I
II
I & II
I, II & III
A
B
C
D
Page 9
42 The fundamental differences between traditional with-profit life insurance policies and investmentlinked life insurance policies include ___________.
I.
II.
III.
IV.
A
B
C
D
investment-linked life insurance policies are less likely to offer more choice in
terms of the type of investment funds
the investment element of investment-linked life insurance policies is made
known to the policyowner at the outset and is invested in a separately identifiable
fund which is made up units of investment
investment-linked life insurance policies offer the potential for higher returns
traditional with profits life policies aim to produce a steady return by smoothing
out market fluctuation
I, II & III
I, II & IV
I, III & IV
II, III & IV
I, II & III
I, II & IV
I, III & IV
II, III & IV
44 Investment-linked funds can be structured into two ways, namely accumulation units and
distribution units. In accumulation units, the investment income of the funds is _____________.
A
B
C
D
ploughed back into the fund, thus the unit prices will increase over the long term
ploughed back into the fund, thus the unit prices will decrease over the long term
used to purchase additional units to be distributed to the policyowners, thus the unit price
remains unchanged but the policyowners gets more units
used to purchase additional units to be distributed to the policyowners, thus the unit price
decreases and the policyowners get more units
Page 10
switching facility allows a policyholder the liberty to move part or all of his money
from one fund to another
switching facility can be useful for retirement and education fees planning
if the company offers only one fund to its policyholders, it will normally include a
switching facility
it is advisable for policyholders to switch assets in the bond type funds (which are
more variable in returns)
I & II
II
III
III & IV
46 The switching facility under investment-linked life insurance policies is very useful ________.
A
B
C
D
47 Which one of the following funds comprises a higher proportion of equity and a lower proportion
of fixed income instruments?
A
B
C
D
Bond funds
Mixed funds
Property funds
Managed funds
48 Which of the following funds normally include a provision for the deferment of unit redemption by
the manager, for up to 12 month, except for death?
A
B
C
D
Property funds
Managed funds
Equity funds
Government bond funds
Page 11
I.
II.
III.
IV.
A
B
C
D
I, II & III
I, II & IV
I, III & IV
II, III & IV
50 Investment-linked funds can be invested in any financial instruments including cash funds, bond
funds, property funds, specialised funds and diversified funds.
Equity funds ________________________.
A
B
C
D
invest in stocks and shares and the magnitude of the change in unit prices will depend on
the quantity only of the equities held
invest in stocks and shares and are inherently of lower risk in nature and the prices of the
stocks and shares are stable
invest in stocks and shares and investor who buy such assets usually aim for capital
appreciation
invest in stocks and shares and during market recession, such assets are usually the last to
depreciate
51 In risk-return profile of cash funds, bond funds, balanced funds, managed funds and equity funds,
a risk-return graph will show that _______________.
I.
II.
III.
IV.
A
B
I, II & III
I, II & IV
C
D
I, III & IV
II, III & IV
Page 12
C
D
I, II & III
I, II & IV
I, III & IV
II, III & IV
54 Under an investment-linked life insurance policy, if a policyowner pays a regular payment to the
insurance company; this is normally for _________________.
A
B
C
D
the policyowner buys the units at the life offices buying price and sells the units at the life
offices selling price
the policyowner buys the units at the offer price and sells the units at the bid price
there is only one price quoted whether the policyowner is buying or selling his units
the bid price is always higher than the offer price
56 Under the single pricing method of single premium policies, the number of units that can be
bought is equivalent to ___________.
A
B
C
D
Page 13
Agnes had allocated an amount of RM4,000 premium to buying units. The number of units that
Agnes holds is 4,000. After 10 years, the offer price is now RM1.97. The bid-offer spread is 5%.
The mortality charge is 1% and the policy fee is RM100. The ending value of investment, the
return on gross premium and the annual yield under Agness policy are ____________.
A
B
C
D
59 The number of units under a single pricing method single premium investment-linked life
insurance policy is 3,800 with a sum assured of RM5,000. The offer price when the policyowner
first pays his premium is RM1.00. The units price at the time of the policyowners death is
RM1.22. Under the unit value plus sum assured type of death benefits, this will result in a death
benefit of ___________.
A
B
C
D
RM9,636
RM8,800
RM5,000
RM4,636
61 Which of the following statements about single premium investment-linked policies are TRUE?
I.
II.
III.
A
B
C
D
I & II
I & III
II & III
I, II & III
Page 14
the risk of insolvency of the life insurance company due to the depletion of the
life funds
the risk of fluctuations of the unit price of the policy that may rise or fall,
depending on the current market situation
the risk of the cash and maturity values of the policy being adversely affected if
the bid price of the units falls
I & II
I & III
II & III
I, II & III
63 Which one of the following BEST describes the policy benefits of investment-linked policies?
A
B
C
D
64 Which one of the following statements about the benefits in investment-linked fund is FALSE?
A
B
C
D
the fund provides a highly diversified portfolio, thus, lowering the risk of investment
the fund relieves the investor from the hassle of administering his/her investment
the fund ensures definite high yield for an investor since it is managed by professionals
who are well-versed in the management of risks of investment portfolios
the fund enables small investor to participate in a pool of diversified portfolio in which
he/she, with low investment capital is unlikely to have acceded to
I & II
I & III
II & III
I, II & III
Page 15
I, II & III
I, II & IV
I, III & IV
II, III & IV
67 Which one of the following statements about the flexibility features of investment-linked policies
is FALSE?
A
B
C
D
policyholders have the flexibility of switching from one fund to another provided it satisfies
the companies switching criteria
policyholders may request for a partial surrender of the policy and the withdrawal amount
will be met by cashing the units at bid price
policyholders can take loans against their investment-linked policies up to the entire cash
value of their policies
policyholders have the flexibility of increasing or decreasing their premiums for regular
premium investment-linked policies
policyowners can easily change the level of sum assured and switch their
investment between funds
policyowners can easily take premium holidays and add single premium top-ups
investment-linked life insurance products have a simple product design with a
clear structure with caters separately for investment and insurance protection
policyowners can easily change the level of their premium payment
I, II & III
I, II & IV
I, III & IV
I, II, III & IV
Page 16
administration of their investment. All that are required of them include ____________.
I.
II.
III.
IV.
A
B
C
D
I & II
I, II & III
I, II & IV
I, II, III & IV
policyowners who are risk averse should not purchase life insurance policies with high
protection and guaranteed cash and maturity values
policyowners who invest in unitised funds with high equity investment face greater risk but
can expect to achieve higher return than the traditional life insurance product over the long
term
investment in unitised funds which are fully invested in units of equity funds are not
suitable for policyowners who can tolerate the risks of short term fluctuation in their cash
value
policyowners who are risk averse should buy investment-linked life insurance policies with
high equity investment
71 The administrative fee, insurance charge, fund management fee and the like under an
investment-linked life insurance policy are ______________.
A
B
C
D
usually guaranteed
not subject to review
subject to change by the life office after written notice is given
always up-front charges
Page 17
I.
II.
III.
A
B
C
D
I
I & III
II & III
I, II & III
74 The criteria for comparing traditional life insurance products with investment-linked life insurance
products include _____________.
I.
II.
III.
IV.
A
B
C
D
I, II & III
I, II & IV
I, III & IV
II, III & IV
life office will carry out a valuation of its funds yearly and any surplus may be allocated to
with-profits policyholder as reversionary bonus
investment-linked life insurance policies offer investors policies with values indirectly
linked to the investment performance of the life office
the investment element of investment-linked policies varies according to underlying assets
of the portfolio
both Whole Life and Endowment policies can be used as an investment media with
benefits than become payable at a future date
Page 18
I.
II.
III.
A
B
C
D
I & II
I & III
II & III
I, II & III
77 Which one of the following statements describe the differences between investment-linked
products and with products?
I.
II.
III.
A
B
C
D
I
I & II
I & III
I, II & III
78 With traditional with-profit life insurance products, the allocations to policyowners in the form of
bonuses __________.
I.
II.
III.
IV.
A
B
C
D
I, II & III
I, II & IV
I, III & IV
II, III & IV
Page 19
A
B
C
D
80 The death benefit under regular premium investment-linked life insurance policies is either
______________.
I.
II.
III.
IV.
A
B
C
D
81
I & II
II & III
III & IV
I & IV
The following statement about surrender value under traditional with-profit life insurance
products is TRUE.
A
B
C
D
82
the sum assured chosen by the life assured or the value of the units in the fund
at the bid price, whichever is higher
the sum assured chosen by the life assured plus the value of units in the fund at
the bid price
the minimum sum assured or the value of the units in the fund at the bid price,
whichever is higher
the minimum sum assured plus the value of the units in the fund at the bid price
the amount of surrender value is usually higher that the amount under without-profit
policies and it varies with the age of the assured, being lower at older age
in the case of with-profit policies, the net cash surrender value includes the surrender
value of the reversionary bonus up to the date of surrender
other than term insurance of more than 20 years, limited payment is made when such
insurance policies are surrender
when a with-profit insurance policy is surrendered, the surrender value is calculated by
multiplying the bid price with number of units
The following statement about surrender value under investment-linked life insurance is
TRUE.
A
B
C
D
the amount of surrender value is always higher than the amount under with-profit
policies
for dual pricing policies, the surrender value is the offer price multiplied by the number
of units
for single pricing policies, the surrender value is the market price multiplied by the
number of units
the amount of surrender value varies with the age of the policyowner, being higher at
older ages
Page 20
The following statement about option to top-up under investment-linked life insurance products
is FALSE.
A
B
C
D
84
policyowners are normally allowed to top-up their policies at any time, subject to a
minimum amount
to top-up a policy, the policyowner pays further single premium at the time to top-up
policyowners may buy additional units of the investment-linked fund and these units will
be allocated to new investment-linked life insurance policies
further premiums at time of top-up will be used in full, after deducting charges for topups, to purchase additional units of the investment-linked fund
I.
II.
III.
A
B
C
D
85
The principal legal document regulating income tax in Malaysia is the ___________.
A
B
C
D
87
I & II
I & III
II & III
I, II & III
A
B
C
86
A
B
C
D
Page 21
In order to encourage national thrift and promote individual financial independence particularly
in old age, tax relief is allowed in respect of premiums paid on life insurance and deferred
annuities which is on the ________________.
I.
II.
III.
IV.
A
B
C
D
89
B
C
D
Effective from the year of assessment 1997, the sum of tax relief allowable ____________.
A
B
C
D
91
I, II & III
I, II & IV
I, III & IV
II, III & IV
90
in respect of payment of life insurance premiums for a life insurance policy is subject to
the limit of 7% of the capital sum assured of the policy
in respect of separate assessments for married couples, the limit of 7% in respect of
payment of life insurance premiums is the same in total
is RM2,500 plus RM2,000 for education and medical insurance
in respect of payment of life insurance premiums for a life insurance policy is no longer
subject to the limit of 7% of the capital sum assured of the policy
Which one of the following statements about investment-linked policies are TRUE?
I.
II.
III.
A
B
C
D
92
Individuals life
The life of the spouse of the individual
The joint lives of the individual and his/her spouse
The lives of the individual and his/her immediate family members
I & II
I & III
II & III
I, II & III
A
B
C
D
The principles of investment-linked policies vary but all operate on the same features
Investment-linked policies can be classified single premium assurance plans or regular
premium assurance plans or investment-linked annuities
Investment-linked policies can be used for investment, regular savings and protection
The cash value and protection benefits are determined by the investment performance
of the underlying assets
Page 22
93
I.
II.
III.
A
B
C
D
94
I & II
I & III
II & III
I, II & III
BNMs circular JPI:1/1997 on Specification of Assets for the purpose of a Licensed Insurers
Margin of Solvency _________________
I.
II.
III.
IV.
A
B
C
D
95
I, II & III
I, II & IV
I, III & IV
II, III & IV
Which one of the following statements are true for investment-linked policies?
I.
II.
III.
A
B
C
D
I & II
I & III
II & III
I, II & III
Page 23
I.
II.
III.
IV.
A
B
C
D
97
Sales-oriented basis
Hard sales basis
Market oriented basis
Varied product basis
Why is it so important that the customer must understand the recommendation in full?
A
B
C
D
99
I & III
I & IV
II & III
III & IV
Owing to changes in the market environment, many insurance companies now sell their
products on a ___________.
A
B
C
D
98
relevant knowledge and understanding of the technical aspects of investmentlinked life coverage
ability to give financial advice according to clients needs
general idea only of investment-linked life coverage
good marketing strategy with promising talk
The objective of satisfying customers needs profitably can be achieved by an agent through
_________.
I.
II.
III.
IV.
A
B
C
D
I, II & IV
II, III & IV
I & III
II & III
Page 24
Why is the personal delivery of policy regarded as an important aspect of providing after-sale
service?
I.
II.
III.
IV.
A
B
C
D
101
I, II & III
II, III & IV
I, III & IV
All
In Part II of the General Sales Principles of LIAMs Code of Conduct, intermediaries are
forbidden to ________________.
I.
II.
III.
IV.
A
B
C
D
102
I & II
II & III
II & IV
III & IV
I.
II.
III.
A
B
C
D
103
I & II
I & III
II & III
I, II & III
A
B
C
D
Page 25
A
B
C
D
105
Misrepresentation resulting in inducing policyowner to cancel or have his policy made paid-up
in order to purchase a new policy to earn more income for the agent is known as
A
B
C
D
switching
replacing
twisting
changing
Page 26