please please help a. Sample Multiple Choice Questions has caused the growth n m
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please please help
a. Sample Multiple Choice Questions has caused the growth n managed and sructured a The ncreste 2 wnisoh of the foiewing slanemerm about assssing munuat tund performance a) Funds with lower hisloncai standard feviatons "re mo·ikely to b) Camparing the begineing and ending values of a uual tued ia the preferred c) investor a d Cods butons ans windsis from a fund during te yeuhave ne impact on - ouid only salect the top pe-torming funds from the previous year far fund's ovnral retun 3. Each tme sacurities are iasued a naw prospactus funds are in a stane of contnuoa datribuion er, since mutuai must be f have to fi le a proapectus every two years if there has been no materiai chng b) The fund muat provide investors only with a simplfñed praspechus and t le an annu c) The fund must provide investors with anriual and interim financial statements in addtion d) The fund must provide unitholders with annual and imecim nancial stmements in adcition to the simplfied prospectus and the annusi infarmation form (AIF). 4. The ABC Fund has a 4% back-end load based en the investors nital mestment The XYZ Fund has a 4% back-end icadbased on the vah of the fund at the time of redemption. Both funds have What would happen # the fund was redeamed today? decreased in value s nce frst a) The investor would pay a larger dolar lee with ABC than with XYZ b) The investor would pay a smaler dellar foe with ABC than with XYZ e) The investor would pay a larger dollar fee with XYZ than with ABC. d) The investor would pay the same dolar fee with elther fund 5. What is one of the main reasons advisors have switched to fee-based programs? a) it is becoming unethical to charge on a per transaction basis b) Advisors have been forced to become fund of fund managers. d) Advisors quickly realized they could double their revenue charging fees instead of c) Clients have become more ikely to make their own trading decisions. commissionsExplanation / Answer
1)
There are many reasons for growth in structured products. Though Investor sophistication and knowledge have contribute to their growth, the main reason for interest and growth in these products is the search for higher yields given the low yields prevailing in plain vanilla assets.
Answer : B
2)
Funds with lower standard deviation will typically have less variation from the expected values than with higher standard deviation, This makes it more probable to generate returns closer to their historical values
Answer : A
3)
The fund must provide unitholders with annual and interim financial stataments in addtion to prospectus and AIF
Answer :D
4)
If we assume that the investor has invested same amount in both funds and both fund have decreased to the same value, then the investor with ABC fund would pay a larger dollar fees as it is tied to initial investment than with XYZ which is tied to redemption value. For example, If $100 each is invested in each of the funds and the funds' value decreases to $ 95, then for ABC , the fees is $4 and for XYZ , the fees is 4%*95 = $ 3.8
Answer : A
5)
One of the major advantages of fees based model is the recurring revenue and constant revenue streams unlike in a commision model which though comes with a huge upfront amount can never be predicted. The lower costs with a fess based model with recurring revenues makes it more powerful in terms of equity and the net benefit could go as high as more than 2 times the commission based revenue.
Answer : D
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