CMFAS Securities Products M2 3

Question 1

What is a Singapore Government Security (SGS)?

Accepted Answer

A debt instrument issued by the Singapore Government

Answer

SGS are bonds issued by the Singapore Government, considered among the safest investments as they are backed by the government's full faith and credit.

Question 2

What is the difference between a secured and unsecured bond?

Accepted Answer

Secured bonds are backed by specific assets; unsecured bonds have no asset backing

Answer

Secured bonds are backed by specific collateral (assets), giving bondholders a claim on those assets. Unsecured bonds rely solely on the issuer's creditworthiness.

Question 3

What is a Real Estate Investment Trust (REIT)?

Accepted Answer

A listed trust that invests in income-generating real estate

Answer

A REIT is a trust listed on the stock exchange that owns and manages income-generating real estate, distributing most of its rental income to unitholders.

Question 4

What is an Exchange-Traded Fund (ETF)?

Accepted Answer

A fund traded on the stock exchange that tracks an index or basket of assets

Answer

An ETF is a fund that trades on a stock exchange like a share and typically tracks a market index, commodity, or basket of assets.

Question 5

What does 'ex-dividend' mean?

Accepted Answer

The stock trades without entitlement to the declared dividend

Answer

When a stock goes ex-dividend, buyers after that date will not receive the declared dividend. The dividend goes to whoever held the shares before the ex-date.

CMFAS Practice Test

CMFAS Practice Test

CMFAS Securities Products M2 3