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Securities Products M2 Flashcards

6 cards from real CMFAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Securities Products M2 flashcards as text

  1. What is a debenture?

    Answer: An unsecured bond backed only by the issuer's creditworthiness

    A debenture is an unsecured debt instrument backed only by the issuer's reputation and creditworthiness, not by specific collateral.

  2. What is the role of a custodian in the securities market?

    Answer: To safekeep securities and handle settlement on behalf of investors

    A custodian is responsible for the safekeeping of securities, settlement of trades, collection of dividends, and other administrative functions.

  3. What is a bonus issue of shares?

    Answer: Free additional shares given to existing shareholders from company reserves

    A bonus issue is when a company distributes additional shares to existing shareholders for free, funded from the company's reserves.

  4. What is the settlement cycle for equities traded on SGX?

    Answer: T+2 (two business days)

    Equities traded on SGX follow a T+2 settlement cycle, meaning the trade is settled two business days after the transaction date.

  5. What is an American Depositary Receipt (ADR)?

    Answer: A certificate representing shares of a foreign company traded on US exchanges

    An ADR is a negotiable certificate that represents shares in a foreign company, allowing US investors to invest in overseas companies through US exchanges.

  6. What is the net asset value (NAV) of a fund?

    Answer: The total value of the fund's assets minus its liabilities, per unit

    NAV is calculated by subtracting the fund's total liabilities from its total assets, then dividing by the number of units outstanding.

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Sources & references

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  1. ibf.org.sg — Eligibility, fees, score release, registration, retake policy, exam format, passing score, time limit · verified Oct 2026