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24-May-230 of 30 questions completed
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IIQE Paper 5 English Free Preview
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Which among the following should be given the copies of the CPD?
I. The insurer(s) of the existing insurance policy replaced/to be replaced within 7 business days of the issue date of the new policy.
II. The client together with the new policy.
III. The insurer(s) of the existing insurance policy replaced/to be replaced within 9 business days of the issue date of the new policy.
IV. The client together with current policy.
As specified under the “Code of Practice for Life Insurance Replacement” published by the HKFI, a “Customer Protection Declaration” (CPD) form must be completed before the policyholder agrees or makes a decision in relation to the purchase of a new policy.
The original of the CPD form shall be kept by the selling office and copies must be issued to:
(a) the client together with the new policy; and
(b) the insurer(s) of the existing insurance policy(ies) replaced/to be replaced (the Non-Selling Office) within 7 business days of the issue date of the new policy.
As specified under the “Code of Practice for Life Insurance Replacement” published by the HKFI, a “Customer Protection Declaration” (CPD) form must be completed before the policyholder agrees or makes a decision in relation to the purchase of a new policy.
The original of the CPD form shall be kept by the selling office and copies must be issued to:
(a) the client together with the new policy; and
(b) the insurer(s) of the existing insurance policy(ies) replaced/to be replaced (the Non-Selling Office) within 7 business days of the issue date of the new policy.
Which of the following is the principal objective of growth fund?
Growth Fund
Principal objective: to achieve maximum capital appreciation rather than a flow of dividends.
Special features: investing in growth stocks; and may invest in smaller, lesser known companies out of mainstream market which fund managers believe possess dynamic potential.
Advantages: higher growth rate; and full utilization of fund manager’s expertise.
Disadvantages: some fund managers may adopt highly aggressive/speculative strategy; extremely high risk; and no consistent income/dividend flow.
Growth Fund
Principal objective: to achieve maximum capital appreciation rather than a flow of dividends.
Special features: investing in growth stocks; and may invest in smaller, lesser known companies out of mainstream market which fund managers believe possess dynamic potential.
Advantages: higher growth rate; and full utilization of fund manager’s expertise.
Disadvantages: some fund managers may adopt highly aggressive/speculative strategy; extremely high risk; and no consistent income/dividend flow.
Which among the following define supra-nationals bonds?
Supra-nationals Bonds
These are issued by multilateral organisations such as the International Bank for Reconstruction and Development (commonly known as the World Bank), the Asian Development Bank and the International Monetary Fund. Bonds issued by such organisations carry very high quality with minimal default risk.
Supra-nationals Bonds
These are issued by multilateral organisations such as the International Bank for Reconstruction and Development (commonly known as the World Bank), the Asian Development Bank and the International Monetary Fund. Bonds issued by such organisations carry very high quality with minimal default risk.
Which among the following is true for investment advising?
I. It refers to the process of providing financial planning of their assets to the clients.
II. It refers to the process of providing investment advises to the clients.
III. It focuses on the investment objectives, needs of the clients and provides investment advises on investment products, investment strategies and so on.
IV. It is a process in which a financial planner evaluates a client’s financial needs in order to meet the client’s overall financial objectives.
Investment advising refers to the process of providing investment advises to the clients. There is a fine distinction between investment advising and financial planning. The latter is a process in which a financial planner evaluates a client’s financial needs such as insurance, retirement, investment, etc. in order to meet the client’s overall financial objectives. Investment advising however focuses on the investment objectives and needs of the clients and provides investment advises on investment products, investment strategies and so on.
Investment advising refers to the process of providing investment advises to the clients. There is a fine distinction between investment advising and financial planning. The latter is a process in which a financial planner evaluates a client’s financial needs such as insurance, retirement, investment, etc. in order to meet the client’s overall financial objectives. Investment advising however focuses on the investment objectives and needs of the clients and provides investment advises on investment products, investment strategies and so on.
What are the categories of money market?
I. Non-negotiable short-term debt instruments
II. Bank transactions
III. Negotiable short-term debt instruments
IV. Bank deposits
Money Market Instruments include highly liquid debt securities with maturities of less than one year. There are two categories of money market, namely
1. bank deposits; and
2. negotiable short-term debt instruments.
Money Market Instruments include highly liquid debt securities with maturities of less than one year. There are two categories of money market, namely
1. bank deposits; and
2. negotiable short-term debt instruments.
Which among the following defines M1 money classification of the Hong Kong Monetary Authority?
Money as defined by the Hong Kong Monetary Authority is classified as:
– M1: The sum of legal tender notes and coins held by the public plus customers’ demand deposits placed with banks.
– M2: M1 plus customers’ savings and time deposits with banks plus negotiable certificates of deposit (NCDs) issued by banks held outside the banking sector.
– M3: M2 plus customers’ deposits with restricted licence banks and deposit-taking companies plus NCDs issued by these institutions held outside the banking sector.
Money as defined by the Hong Kong Monetary Authority is classified as:
– M1: The sum of legal tender notes and coins held by the public plus customers’ demand deposits placed with banks.
– M2: M1 plus customers’ savings and time deposits with banks plus negotiable certificates of deposit (NCDs) issued by banks held outside the banking sector.
– M3: M2 plus customers’ deposits with restricted licence banks and deposit-taking companies plus NCDs issued by these institutions held outside the banking sector.
Which among the following are the main pieces of legislation in Hong Kong that are concerned with money laundering or terrorist financing?
I. Organised and Serious Crimes Ordinance
II. Drug Trafficking Ordinance
III. United Nations Ordinance
IV. Anti-Money Laundering and Counter-Terrorist Financing Ordinance
Hong Kong is a member of the Financial Action Task Force on Money Laundering, an international organisation committed to combating money laundering (“ML”) and terrorist financing (“TF”). The four main pieces of legislation in Hong Kong that are concerned with money laundering or terrorist financing are the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (“AMLO”), the Drug Trafficking (Recovery of Proceeds) Ordinance (“DTROP”), the Organised and Serious Crimes Ordinance (“OSCO”) and the United Nations (Anti-Terrorism Measures) Ordinance (“UNATMO”).
Hong Kong is a member of the Financial Action Task Force on Money Laundering, an international organisation committed to combating money laundering (“ML”) and terrorist financing (“TF”). The four main pieces of legislation in Hong Kong that are concerned with money laundering or terrorist financing are the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (“AMLO”), the Drug Trafficking (Recovery of Proceeds) Ordinance (“DTROP”), the Organised and Serious Crimes Ordinance (“OSCO”) and the United Nations (Anti-Terrorism Measures) Ordinance (“UNATMO”).
Which among the following is true for customer due diligence for countering ML/TF?
I. The AMLO defines what CDD measures are and prescribes the circumstances in which an FI should carry out CDD.
II. As indicated in the AMLO, FIs may need to conduct additional measures or could conduct simplified CDD depending on specific circumstances.
III. The Guideline gives FIs a degree of discretion in how they comply with the AMLO and put in place procedures for this purpose.
IV. The Guideline reminds FIs to take measures to ensure compliance with the relevant regulations and legislation on TF.
Customer Due Diligence (“CDD”)
The AMLO defines what CDD measures are and prescribes the circumstances in which an FI should carry out CDD. As indicated in the AMLO, FIs may also need to conduct additional measures or could conduct simplified CDD depending on specific circumstances. The Guideline sets out the expectations of the RAs in this regard and suggests ways these expectations may be met. Wherever possible, the Guideline gives FIs a degree of discretion in how they comply with the AMLO and put in place procedures for this purpose.
Customer Due Diligence (“CDD”)
The AMLO defines what CDD measures are and prescribes the circumstances in which an FI should carry out CDD. As indicated in the AMLO, FIs may also need to conduct additional measures or could conduct simplified CDD depending on specific circumstances. The Guideline sets out the expectations of the RAs in this regard and suggests ways these expectations may be met. Wherever possible, the Guideline gives FIs a degree of discretion in how they comply with the AMLO and put in place procedures for this purpose.
Which of the following are among the risk reduction techniques?
I. Dollar cost averaging
II. Time as a risk moderator
III. Diversification
IV. Investment return averaging
There are a few proven techniques for reducing risk in investment. They are
1. Diversification
2. Dollar cost averaging
3. Time as a risk moderator
There are a few proven techniques for reducing risk in investment. They are
1. Diversification
2. Dollar cost averaging
3. Time as a risk moderator
Which of the following is a type of security not listed on the SEHK?
Different types of securities apart from equity are now listed on the SEHK:-
– derivative warrants with underlying assets of ordinary shares, market indices, foreign currencies or a basket of shares;
– equity linked instruments (investors are in essence writing an option on the underlying stock);
– exchange traded funds which represent a portfolio of securities designed to track the performance of an index;
– debt securities such as the Exchange Fund Notes issued by the HKMA;
– the Pilot Programme whereby a number of securities listed on the National Association of Securities Dealers and Automatic Quotations (NASDAQ) and the American Stock Exchange (AMEX) were also listed on the SEHK.
Different types of securities apart from equity are now listed on the SEHK:-
– derivative warrants with underlying assets of ordinary shares, market indices, foreign currencies or a basket of shares;
– equity linked instruments (investors are in essence writing an option on the underlying stock);
– exchange traded funds which represent a portfolio of securities designed to track the performance of an index;
– debt securities such as the Exchange Fund Notes issued by the HKMA;
– the Pilot Programme whereby a number of securities listed on the National Association of Securities Dealers and Automatic Quotations (NASDAQ) and the American Stock Exchange (AMEX) were also listed on the SEHK.
Which among the following describe duration as a market risk measurement methodology?
Some major market risk measurement methodologies include:
1. Va lue at Risk (VaR)
2. Stress test
3. Option sensitivity measures
4. Duration: it is used to measure the percentage change in bond prices with respect to change in interest rate.
Some major market risk measurement methodologies include:
1. Va lue at Risk (VaR)
2. Stress test
3. Option sensitivity measures
4. Duration: it is used to measure the percentage change in bond prices with respect to change in interest rate.
Which among the following is true for CAMEL rating system?
I. The overall rating is expressed through the use of a numerical scale of 1 to 5 in descending order of supervisory concern.
II. The risk-based supervision provides the supervisory process with the necessary framework to factor the risk profile of an authorized institution into the CAMEL system.
III. It is an international recognized framework for assessing Capital adequacy, Asset quality, Management, Earnings and Liquidity.
IV. The overall rating is expressed through the use of a numerical scale of 1 to 5 in ascending order of supervisory concern.
The authorized institution is governed by the HKMA. The HKMA has issued various guidelines as contained in the HKMA’s Supervisory Policy Manual to the industry which are either minimum standards or best practices in risk management. The HKMA implemented the CAMEL rating system since 1995 which is an international recognized framework for assessing Capital adequacy, Asset quality, Management, Earnings and Liquidity. The overall rating is expressed through the use of a numerical scale of 1 to 5 in ascending order of supervisory concern. The risk-based supervision provides the supervisory process with the necessary framework to factor the risk profile of an authorized institution into the CAMEL system.
The authorized institution is governed by the HKMA. The HKMA has issued various guidelines as contained in the HKMA’s Supervisory Policy Manual to the industry which are either minimum standards or best practices in risk management. The HKMA implemented the CAMEL rating system since 1995 which is an international recognized framework for assessing Capital adequacy, Asset quality, Management, Earnings and Liquidity. The overall rating is expressed through the use of a numerical scale of 1 to 5 in ascending order of supervisory concern. The risk-based supervision provides the supervisory process with the necessary framework to factor the risk profile of an authorized institution into the CAMEL system.
Which among the following is not true for advice to clients as mentioned under PIBA-GN1?
In response to the issuance of GL15 by the Insurance Authority, PIBA issued a “Guidance Note on Conducting Investment Linked Business” (PIBA-GN1) to set out standards of conduct and business practice in conducting ILAS business in a similar fashion to GL15.
Advice to client
– When a client is beginning to consider an ILAS policy after considering the insurance options, he should be informed of all the product features, particularly the fees and charges, the surrender penalties, as well as the product and investment risks.
– When a client has decided to buy an ILAS policy, he should be fully informed of the key product features again, and his rights and obligations. He should duly sign the Important Facts Statement (IFS) / Applicant’s Declaration (AD).
– PIBA Members should put in place a mechanism to ensure full understanding of the above by the client, as evidenced by the IFS/AD.
In response to the issuance of GL15 by the Insurance Authority, PIBA issued a “Guidance Note on Conducting Investment Linked Business” (PIBA-GN1) to set out standards of conduct and business practice in conducting ILAS business in a similar fashion to GL15.
Advice to client
– When a client is beginning to consider an ILAS policy after considering the insurance options, he should be informed of all the product features, particularly the fees and charges, the surrender penalties, as well as the product and investment risks.
– When a client has decided to buy an ILAS policy, he should be fully informed of the key product features again, and his rights and obligations. He should duly sign the Important Facts Statement (IFS) / Applicant’s Declaration (AD).
– PIBA Members should put in place a mechanism to ensure full understanding of the above by the client, as evidenced by the IFS/AD.
Which among the following is true for post-sale control as described under PIBA-GN1?
I. PIBA Members should follow the proper sales process as set out in the flowchart appended to the Guidance Note.
II. PIBA Members should put in place a mechanism to ensure full understanding of the above by the client, as evidenced by the IFS/AD.
III. PIBA Members should endeavour to reduce the risk of selling products that will not meet the client’s needs.
IV. PIBA Members should establish and implement policies and procedure on fair treatment of customers, with proper control systems.
In response to the issuance of GL15 by the Insurance Authority, PIBA issued a “Guidance Note on Conducting Investment Linked Business” (PIBA-GN1) to set out standards of conduct and business practice in conducting ILAS business in a similar fashion to GL15.
Post-sale control
– PIBA Members should establish and implement policies and procedure on fair treatment of customers, with proper control systems.
– PIBA Members should follow the proper sales process as set out in the flowchart appended to the Guidance Note.
In response to the issuance of GL15 by the Insurance Authority, PIBA issued a “Guidance Note on Conducting Investment Linked Business” (PIBA-GN1) to set out standards of conduct and business practice in conducting ILAS business in a similar fashion to GL15.
Post-sale control
– PIBA Members should establish and implement policies and procedure on fair treatment of customers, with proper control systems.
– PIBA Members should follow the proper sales process as set out in the flowchart appended to the Guidance Note.
Which among the following are the characteristics of guaranteed policies or without-profits or non-participating policies?
I. These policies are entitled to receive a share of the divisible surplus of the insurance company.
II. All policy elements are guaranteed and will not vary with the experience of the company.
III. These products guarantee a fixed rate of return to policyholders in term of death benefit and cash value, if any.
IV. These are normally paid in the form of dividends which will be credited into the account.
Guaranteed Policies/Without-Profits/Non-Participating Policies
These products guarantee a fixed rate of return to policyholders in term of death benefit and cash value, if any. Examples are term insurance and non-participating whole life and endowment insurance. These policies are sold on a guaranteed cost basis, meaning that all policy elements (i.e., the premium, the face amount, and the cash values, if any) are guaranteed and will not vary with the experience of the company.
Guaranteed Policies/Without-Profits/Non-Participating Policies
These products guarantee a fixed rate of return to policyholders in term of death benefit and cash value, if any. Examples are term insurance and non-participating whole life and endowment insurance. These policies are sold on a guaranteed cost basis, meaning that all policy elements (i.e., the premium, the face amount, and the cash values, if any) are guaranteed and will not vary with the experience of the company.
Which among the following is true for with-profits or participating policies?
I. All policy elements are guaranteed and will not vary with the experience of the company.
II. These are normally paid in the form of dividends which will be credited into the account.
III. Examples of such policies are with-profits (participating) whole life and endowment insurances.
IV. These policies are entitled to receive a share of the divisible surplus of the insurance company.
With-Profits/Participating Policies
Examples of such policies are with-profits (participating) whole life and endowment insurances. These policies are entitled to receive a share of (participate in) the divisible surplus (profits) of the insurance company. These are normally paid in the form of dividends which will be credited into the account. For insurance companies using UK style practice, they will use bonus systems which include reversionary bonus, performance or terminal bonuses.
With-Profits/Participating Policies
Examples of such policies are with-profits (participating) whole life and endowment insurances. These policies are entitled to receive a share of (participate in) the divisible surplus (profits) of the insurance company. These are normally paid in the form of dividends which will be credited into the account. For insurance companies using UK style practice, they will use bonus systems which include reversionary bonus, performance or terminal bonuses.
What are the common forms of money laundering?
I. Overpayment of premiums.
II. Return premiums.
III. By way of proposals for single premium contracts in respect of investment bonds, purchased annuities, life insurances or personal pensions.
IV. Underpayment of premium.
Money Laundering and Insurance
Most common form of ML:
1. by way of proposals for single premium contracts in respect of investment bonds, purchased annuities, life insurances or personal pensions;
2. return premiums; and
3. overpayment of premiums.
Money Laundering and Insurance
Most common form of ML:
1. by way of proposals for single premium contracts in respect of investment bonds, purchased annuities, life insurances or personal pensions;
2. return premiums; and
3. overpayment of premiums.
Which among following is a stage of money laundering?
I. Integration
II. Covering
III. Placement
IV. Layering
Stages of ML: there are three common stages which should alert insurance institutions to potential criminal activities:
1. Placement: the physical disposal of cash proceeds derived from illegal activities;
2. Layering: separating illicit proceeds from their source by creating complex layers of financial transactions designed to disguise the source, subvert the audit trail and provide anonymity; and
3. Integration: creating the impression of apparent legitimacy to criminally derived wealth.
Stages of ML: there are three common stages which should alert insurance institutions to potential criminal activities:
1. Placement: the physical disposal of cash proceeds derived from illegal activities;
2. Layering: separating illicit proceeds from their source by creating complex layers of financial transactions designed to disguise the source, subvert the audit trail and provide anonymity; and
3. Integration: creating the impression of apparent legitimacy to criminally derived wealth.
Which among the following are the factors on the basis of which the premium rate for a life insurance policy/annuity depends?
I. Cost of insurance.
II. Interest/investment earnings.
III. Expenses to cover distribution and operation costs and to provide for contingency and profits of the insurance company.
IV. Return of insurance.
The premium rate for a life insurance policy/annuity is based on three main factors:
– cost of insurance;
– expenses to cover distribution and operation costs and to provide for contingency and profits of the insurance company; and
– interest/investment earnings.
The premium rate for a life insurance policy/annuity is based on three main factors:
– cost of insurance;
– expenses to cover distribution and operation costs and to provide for contingency and profits of the insurance company; and
– interest/investment earnings.
Which of the following are among the main characteristics of investment-linked policies?
I. The policy maker takes on all the investment benefits as well as losses relating to the performance of the underlying investment fund.
II. The value of the policy will fluctuate with the value of the underlying investment funds.
III. Generally offers a variety of investment funds each with a different investment strategy.
IV. All fees and charges are made known to the policyholder.
The main characteristics of investment-linked policies are follows:
1. all fees and charges are made known to the policyholder;
2. premium payments net of relevant charges such as cost of insurance and expenses are invested in the policyholder’s chosen investment funds accounts that are separated from the company’s general assets or investments;
3. the value of the policy will fluctuate with the value of the underlying investment funds;
4. generally offers a variety of investment funds each with a different investment strategy – such as money market, stock, bond funds etc.;
5. the policyholder takes on all the investment benefits as well as losses relating to the performance of his/her chosen investment fund; and
6. generally does not work well for too small premium amounts because deduction of expenses and cost of insurance will leave behind a very small amount available for investment.
The main characteristics of investment-linked policies are follows:
1. all fees and charges are made known to the policyholder;
2. premium payments net of relevant charges such as cost of insurance and expenses are invested in the policyholder’s chosen investment funds accounts that are separated from the company’s general assets or investments;
3. the value of the policy will fluctuate with the value of the underlying investment funds;
4. generally offers a variety of investment funds each with a different investment strategy – such as money market, stock, bond funds etc.;
5. the policyholder takes on all the investment benefits as well as losses relating to the performance of his/her chosen investment fund; and
6. generally does not work well for too small premium amounts because deduction of expenses and cost of insurance will leave behind a very small amount available for investment.
Which of the following is the principal objective of guaranteed fund?
Guaranteed Fund
Principal objective: to be neutral to negative market performance with a guarantee on the principal/return.
Special feature: guaranteed amount will be paid upon maturity.
Advantage: no risk of principal.
Disadvantages: application of high guarantee fee; minimum investment period applicable; special conditions may apply; and relatively lower return.
Guaranteed Fund
Principal objective: to be neutral to negative market performance with a guarantee on the principal/return.
Special feature: guaranteed amount will be paid upon maturity.
Advantage: no risk of principal.
Disadvantages: application of high guarantee fee; minimum investment period applicable; special conditions may apply; and relatively lower return.
Which among the following are the disadvantages of guaranteed fund?
I. Higher management fee may be incurred.
II. Application of high guarantee fee.
III. Relatively lower return.
IV. Minimum investment period applicable.
Guaranteed Fund
Principal objective: to be neutral to negative market performance with a guarantee on the principal/return.
Special feature: guaranteed amount will be paid upon maturity.
Advantage: no risk of principal.
Disadvantages: application of high guarantee fee; minimum investment period applicable; special conditions may apply; and relatively lower return.
Guaranteed Fund
Principal objective: to be neutral to negative market performance with a guarantee on the principal/return.
Special feature: guaranteed amount will be paid upon maturity.
Advantage: no risk of principal.
Disadvantages: application of high guarantee fee; minimum investment period applicable; special conditions may apply; and relatively lower return.
Which among the following is not a disadvantage of investment funds?
Disadvantages of Investment Funds
(a) Management fees
(b) Lack of choice
(c) Lack of owner’s rights
Disadvantages of Investment Funds
(a) Management fees
(b) Lack of choice
(c) Lack of owner’s rights
Which of the following are among the requirements for a management company?
I. Be engaged primarily in the business of fund management.
II. Maintain at all times a positive net asset position.
III. Have its investment management operations based in a jurisdiction with an inspection regime acceptable to the SFC.
IV. Not lend to a material extent.
“Authorized” investment funds must appoint a management company acceptable to the SFC. It is responsible for investment management within the scope of the constituent documents. For this, a management company must:
(1) be engaged primarily in the business of fund management;
(2) have sufficient financial resources to enable it to conduct its business effectively and meet its liabilities; in particular, it must have a minimum issued and paid-up capital and capital reserves of HKD1 million or its equivalent in foreign currency;
(3) not lend to a material extent;
(4) maintain at all times a positive net asset position; and
(5) have its investment management operations based in a jurisdiction with an inspection regime acceptable to the SFC.
“Authorized” investment funds must appoint a management company acceptable to the SFC. It is responsible for investment management within the scope of the constituent documents. For this, a management company must:
(1) be engaged primarily in the business of fund management;
(2) have sufficient financial resources to enable it to conduct its business effectively and meet its liabilities; in particular, it must have a minimum issued and paid-up capital and capital reserves of HKD1 million or its equivalent in foreign currency;
(3) not lend to a material extent;
(4) maintain at all times a positive net asset position; and
(5) have its investment management operations based in a jurisdiction with an inspection regime acceptable to the SFC.
Which among the following is not a non-financial change that the policyholder of investment-linked policy can request?
The policyholder of investment-linked policy can request for changes to the policy. These changes include non-financial changes such as:
change of beneficiary;
assignment of the policy; and
change of address/personal particulars;
The policyholder of investment-linked policy can request for changes to the policy. These changes include non-financial changes such as:
change of beneficiary;
assignment of the policy; and
change of address/personal particulars;
Which of the following is among financial change that the policyholder of investment-linked policy can request?
I. Change of beneficiary
II. Change of sum assured
III. Change of frequency of premium payment
IV. Surrender
The policyholder of
investment-linked policy can request for changes to the policy. These changes include financial changes such as:
reinstatement;
change of frequency of premium payment;
change of sum assured;
policy loan; and
surrender
The policyholder of
investment-linked policy can request for changes to the policy. These changes include financial changes such as:
reinstatement;
change of frequency of premium payment;
change of sum assured;
policy loan; and
surrender
Which among the following is true for Growth Enterprise Market?
I. The expected market capitalization of its securities held by the public at the time of listing must not be less than HKD50 million.
II. The new applicant must have a positive cash flow from adjusted operating profits of not less than HKD20 million in aggregate for the two financial years preceding the issue of the listing documents.
III. The market capitalization requirement is only at least HKD100 million.
IV. GEM was established to provide capital formation opportunities for growth companies of all industries and sizes.
GEM was established in November 1999 to provide capital formation opportunities for growth companies of all industries and sizes. Therefore, generally the listing requirements of the GEM are less stringent than that of the Main Board. For example, unlike the Main Board there is no profit requirement. However, the new applicant must have a positive cash flow from adjusted operating profits (before changes in working capital and taxes paid) of not less than HKD20 million in aggregate for the two financial years preceding the issue of the listing documents. The market capitalization requirement is only at least HKD100 million.
GEM was established in November 1999 to provide capital formation opportunities for growth companies of all industries and sizes. Therefore, generally the listing requirements of the GEM are less stringent than that of the Main Board. For example, unlike the Main Board there is no profit requirement. However, the new applicant must have a positive cash flow from adjusted operating profits (before changes in working capital and taxes paid) of not less than HKD20 million in aggregate for the two financial years preceding the issue of the listing documents. The market capitalization requirement is only at least HKD100 million.
Which among the following are the trading platforms on the SEHK for IPOs?
I. Secondary Board
II. Profit Enterprise Board
III. Main Board
IV. Growth Enterprise Market
The listing requirements for IPOs are governed by the Listing Rules of the SEHK. Since there are two trading platforms on the SEHK, namely the Main Board and the Growth Enterprise Market (GEM), there are two sets of Listing Rules applicable.
The listing requirements for IPOs are governed by the Listing Rules of the SEHK. Since there are two trading platforms on the SEHK, namely the Main Board and the Growth Enterprise Market (GEM), there are two sets of Listing Rules applicable.
Which among the following is true for level load?
I. This type of funds is commonly known as class C unit/share and is more attractive for the short-term investors.
II. The fee is paid up-front and just once, as a percentage of the initial purchase price.
III. The redemption charge may be a fixed percentage of the NAV, or based on the time period for which the investors have held their units/shares.
IV. A distribution fee is again applicable to cover the selling expenses.
A level load fund requires the investors to pay a small front-end charge when the units/shares are purchased from the fund house, and possibly a small back-end charge if they are sold back to the fund house in less than a year. However, a distribution fee is again applicable to cover the selling expenses. This type of funds is commonly known as class C unit/share and is more attractive for the short-term investors. However, it should be noted that level load is not too common in Hong Kong.
A level load fund requires the investors to pay a small front-end charge when the units/shares are purchased from the fund house, and possibly a small back-end charge if they are sold back to the fund house in less than a year. However, a distribution fee is again applicable to cover the selling expenses. This type of funds is commonly known as class C unit/share and is more attractive for the short-term investors. However, it should be noted that level load is not too common in Hong Kong.
Which among the following is true for over-the-counter (OTC) market?
I. It is not a standardized market as opposed to an exchange market.
II. Trading of the already issued debt securities are transacted on the secondary market which is predominately an over-the-counter (OTC) market.
III. Bonds are issued by the OTC market.
IV. OTC market is an informal network of market participants such as brokers and dealers who negotiate sales of securities with each other.
Trading of the already issued debt securities are transacted on the secondary market which is predominately an over-the-counter (OTC) market. OTC market is an informal network of market participants such as brokers and dealers who negotiate sales of securities with each other. It is not a standardized market as opposed to an exchange market in that the trade specifications such as contract size, settlement date, etc. are subject to the parties’ negotiation.
Trading of the already issued debt securities are transacted on the secondary market which is predominately an over-the-counter (OTC) market. OTC market is an informal network of market participants such as brokers and dealers who negotiate sales of securities with each other. It is not a standardized market as opposed to an exchange market in that the trade specifications such as contract size, settlement date, etc. are subject to the parties’ negotiation.
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You worked very hard on the first practice question.
Enter your email below and start the next practice questions immediately for free.
Customer Success Manager | IIQEDataBase