Professional AG912 Study Companion |
Practice Questions with Reliable Solutions |
2025 Guide
Which one of the following is not part of a bond covenant?
A. Dividend restrictions
B. Collateral
C. Subordination clause
D. Sinking Fund
E. Closed-end Fund - ✔✔E. Closed-end fund
Which three of the following are not open to the general public in the UK?
I. Hedge Funds
II. Mutual Funds
III. Pension Funds
IV. Sovereign Wealth Funds
V. unregulated collective investment schemes (UCIS)
A. II, III and V
B. I, IV and V
C. II, III and IV
D. I, II and III
E. I, II and IV - ✔✔e. I, IV and V
The London Stock Exchange (LSE) operates:
A. an order-driven market
B. a quote-driven market
C. a hybrid order-and quote driven market
,D. all of the above
E. none of the above - ✔✔D. all of the above
A market in which financial intermediaries operate is characterised as direct financing.
A. True
B. False - ✔✔b. False
According to Rock (1986), initial public offerings (IPOs) are underpriced to ensure participation of
investor in primary markets.
A. True
B. False - ✔✔
In UK IPOs, at least 25% of shares must be available for trading.
A. True
B. False - ✔✔a. True
Which of the following is a disadvantage of a pay-as-you-earn state pension scheme, such as the one in
the UK?
A. Low administration costs for employees
B. Funds available even as population ages
C. Fewer contributors relative to beneficiaries as aging population increases
D. Low age at which people qualify for state pension
E. Availability of a sovereign wealth fund - ✔✔
Which one of the following is a function of the Financial Conduct Authority (FCA}?
A. protecting and enhancing the resilience of the UK financial system
B. setting exchange rates
C. regulating the conduct of banks
D. setting UK tax rates
,E. setting interest rates - ✔✔C. regulating the conduct of banks
The UK introduced legislation that prohibits universal banks.
A. True
B. False - ✔✔B. False
A type of deposit taking financial institution is a:
A. building society
B. retail bank
C. universal bank
D. wholesale bank
E. all of the above - ✔✔
The rule which states that a similar set of goods and services produced in various countries should have
equal price is known as:
A. law of similar mortgage rate
B. law of one type manufacturing
C. law of similar labour rules
D. law of one price
E. volatile power parity - ✔✔D. law of one price
The form of efficiency which considers the speed and accuracy with which information is incorporated
into security prices is called:
A. allocative efficiency
B. informational efficiency
C. operational efficiency
D. expensive market efficiency
E. none of the above - ✔✔
, UK government bonds are issued by the:
A. FCA
B. PRA
C. DMO
D. LSE
E. none of the above - ✔✔
As compared to non-putable bonds, the yield on equivalent putable bonds is:
A. relatively lower
B. relatively higher
C. relatively zero
D. relatively discounted
E. the same - ✔✔
Credit rating agencies when rating corporate bonds are paid for their services by:
A. The government
B. Chamber of Commerce
C. The bond issuer
D. The SEC
E. The bond buyers - ✔✔
Futures are what type of financial instrument?
A. A bond
B. A preferred share
C. A derivative
D. life insurance
E. certificate of deposit - ✔✔A. A bond
Practice Questions with Reliable Solutions |
2025 Guide
Which one of the following is not part of a bond covenant?
A. Dividend restrictions
B. Collateral
C. Subordination clause
D. Sinking Fund
E. Closed-end Fund - ✔✔E. Closed-end fund
Which three of the following are not open to the general public in the UK?
I. Hedge Funds
II. Mutual Funds
III. Pension Funds
IV. Sovereign Wealth Funds
V. unregulated collective investment schemes (UCIS)
A. II, III and V
B. I, IV and V
C. II, III and IV
D. I, II and III
E. I, II and IV - ✔✔e. I, IV and V
The London Stock Exchange (LSE) operates:
A. an order-driven market
B. a quote-driven market
C. a hybrid order-and quote driven market
,D. all of the above
E. none of the above - ✔✔D. all of the above
A market in which financial intermediaries operate is characterised as direct financing.
A. True
B. False - ✔✔b. False
According to Rock (1986), initial public offerings (IPOs) are underpriced to ensure participation of
investor in primary markets.
A. True
B. False - ✔✔
In UK IPOs, at least 25% of shares must be available for trading.
A. True
B. False - ✔✔a. True
Which of the following is a disadvantage of a pay-as-you-earn state pension scheme, such as the one in
the UK?
A. Low administration costs for employees
B. Funds available even as population ages
C. Fewer contributors relative to beneficiaries as aging population increases
D. Low age at which people qualify for state pension
E. Availability of a sovereign wealth fund - ✔✔
Which one of the following is a function of the Financial Conduct Authority (FCA}?
A. protecting and enhancing the resilience of the UK financial system
B. setting exchange rates
C. regulating the conduct of banks
D. setting UK tax rates
,E. setting interest rates - ✔✔C. regulating the conduct of banks
The UK introduced legislation that prohibits universal banks.
A. True
B. False - ✔✔B. False
A type of deposit taking financial institution is a:
A. building society
B. retail bank
C. universal bank
D. wholesale bank
E. all of the above - ✔✔
The rule which states that a similar set of goods and services produced in various countries should have
equal price is known as:
A. law of similar mortgage rate
B. law of one type manufacturing
C. law of similar labour rules
D. law of one price
E. volatile power parity - ✔✔D. law of one price
The form of efficiency which considers the speed and accuracy with which information is incorporated
into security prices is called:
A. allocative efficiency
B. informational efficiency
C. operational efficiency
D. expensive market efficiency
E. none of the above - ✔✔
, UK government bonds are issued by the:
A. FCA
B. PRA
C. DMO
D. LSE
E. none of the above - ✔✔
As compared to non-putable bonds, the yield on equivalent putable bonds is:
A. relatively lower
B. relatively higher
C. relatively zero
D. relatively discounted
E. the same - ✔✔
Credit rating agencies when rating corporate bonds are paid for their services by:
A. The government
B. Chamber of Commerce
C. The bond issuer
D. The SEC
E. The bond buyers - ✔✔
Futures are what type of financial instrument?
A. A bond
B. A preferred share
C. A derivative
D. life insurance
E. certificate of deposit - ✔✔A. A bond
