CMFAS Collective Investment Schemes M3 2

Question 1

What is a fund's prospectus?

Accepted Answer

A legal document detailing the fund's objectives, risks, fees, and terms

Answer

A marketing brochure

Answer

A monthly performance report

Answer

A receipt for investment

Question 2

What is the sales charge (front-end load) for a unit trust?

Accepted Answer

A fee charged when you buy units, deducted from the investment amount

Answer

A fee charged when you sell units

Answer

A monthly service fee

Answer

A performance-based fee

Question 3

What is a money market fund?

Accepted Answer

A fund that invests in short-term, low-risk instruments like treasury bills

Answer

A fund that invests in stocks

Answer

A fund that invests in real estate

Answer

A fund that invests in commodities

Question 4

What is an equity fund?

Accepted Answer

A fund that primarily invests in stocks/shares

Answer

A fund that invests in bonds

Answer

A fund that invests in property

Answer

A fund that invests in currencies

Question 5

What is a balanced fund?

Accepted Answer

A fund that invests in a mix of equities and fixed income

Answer

A fund that only invests in bonds

Answer

A fund that only invests in one country

Answer

A fund with zero risk

Question 6

What is the bid price and offer price in unit trusts?

Accepted Answer

Bid is the price at which you sell units; offer is the price at which you buy units

Answer

They are the same price

Answer

Bid is the highest price; offer is the lowest price of the day

Answer

They are only relevant for bonds