SCA Financial Instruments

Question 1

What is a common share (ordinary share)?

Accepted Answer

An ownership stake in a company giving the holder voting rights and a share of profits (dividends)

Answer

A debt instrument issued by a company

Answer

A government-issued bond

Answer

A derivative contract

Question 2

What is a bond?

Accepted Answer

A debt instrument where the issuer borrows from investors and promises to repay principal with interest

Answer

An ownership stake in a company

Answer

A futures contract

Answer

A type of mutual fund

Question 3

What is the relationship between bond prices and interest rates?

Accepted Answer

They move in opposite directions — when rates rise, bond prices fall

Answer

They move in the same direction

Answer

They are not related

Answer

They are only related for government bonds

Question 4

What is a 'sukuk' in Islamic finance?

Accepted Answer

A Sharia-compliant financial certificate representing ownership in an asset or project, providing returns without interest

Answer

A conventional interest-bearing bond

Answer

A type of equity share

Answer

A commodity futures contract

Question 5

What is an Exchange-Traded Fund (ETF)?

Accepted Answer

A fund that tracks an index, sector, or asset class and is traded on an exchange like a stock

Answer

A single stock listed on an exchange

Answer

A type of bond issued by the exchange

Answer

A futures contract on an index

Question 6

What is a 'derivative' financial instrument?

Accepted Answer

A financial contract whose value is derived from an underlying asset such as a stock, commodity, or currency

Answer

A bond issued by a government

Answer

A type of savings account

Answer

A certificate of deposit