Question 1

A developer is promoting a large new suburban shopping centre and decides to establish a publicly listed unit trust to attract investors. Which type of unit trust would likely be established?

A mortgage trust

A property trust

An equity trust

A cash management trust

Question 2

A general insurance company:

Typically sells life insurance policies

Has very predictable outflows

Invests mainly in capital market securities

Typically sells motor vehicle and house and content insurance

Question 3

If you invest $47,000 for five years at 9.7% p.a. compounded annually, what is the value of your investment at the end of the five-year period?

$81,910.13

$74,667.39

$56,560.22

$62,046.56

Question 4

In an accumulation superannuation fund:

the employee is promised an allocated benefit based on earnings and years of service.

the amount of funds available at retirement consists of contributions plus earnings less taxes and expenses

if the funds in the plan exceed the promised amount, the excess remains with the issuing firm or institution.

all of the earnings' taxes are paid by the employer.

Question 5

The interest rate where interest is charged at the same frequency as the quoted interest rate is the:

nominal interest rate

real interest rate

compound interest rate

effective interest rate

Question 6

As at 2013which non-bank financial institution has the largest share of assets?

Superannuation funds

Finance companies

Insurance companies

Credit Unions

Question 7

What is the difference between daily and monthly compounding for a nominal interest rate of 7% per annum?

0.06%

0.04%

0.02%

0.01%

Question 8

In which of the following areas is simple interest typically applied?

Treasury Notes

Bills of Exchange

in both Treasury Notes and Bills of Exchange

none of the above

Question 9

Which of the following statements about superannuation is false?

Australia introduced a Superannuation Guarantee Surcharge (SGC)in 1992.

The SGC isa compulsory superannuation scheme designed to increase the level of retirement savings for the working population.

The current level of the SGC is 12%

None of the given answers

Question 10

A defined benefit superannuation plan:

is always fully funded, with no shortfall requirement.

may have a shortfall, but the Commonwealth government will make good the shortfall.

may have a shortfall, but the employer will make good the shortfall.

is where the employee bears the risk if the performance of the investment is bad.