Introduction to Securities & Investment -
CHAP QUESTIONS And Rationales
2026/2027 Updated.
A custodian bank will typically look after securities on behalf of which of the following:
- Fund managers, pension funds and insurance companies
- Pension funds and insurance companies only
- fund managers and pension funds only
- insurance companies and fund managers only - Answer Fund managers, pension funds and
insurance companies
Which of the following are regarded as rivals to traditional stock exchanges?
- exchange traded funds
- multilateral trading facilities
- over-the-counter markets
- foreign exchange markets - Answer Multilateral trading facilities
An investment strategy generated via robo-advice tends to be:
- Passively focussed
- high risk
- geared towards capital accumulation
- socially responsible - Answer Passively focussed
A bank that specialises in corporate finance and advisory work, securities trading and
investment management is generally known as:
- an investment bank
- an international bank
- a merchant bank
- a savings bank - Answer An investment bank
,A mutually owned organisation offering banking services to individual customers is typically
described as which of the following:
- savings institution
- retail bank
- pension fund
- custodian bank - Answer Savings institution
A particular country is exhibiting an invisible trade surplus and a visible trade deficit. How would
the country best be described?
- Manufacturing-driven
- in balance
- post industrial
- in recession - Answer Post industrial
The Bank of England assumes direct responsibility for all the following central bank activities,
EXCEPT:
- Holding the nations gold & currency reserves
- Issuing the notes and coins in circulation
- Managing the national debt
- Acting as the lender of last resort - Answer Managing the national debt
Which of the following types of economy is most likely to have production and allocation of
resources planned in advance?
- Open economy
- Market economy
- Mixed economy
- state controlled economy - Answer State controlled economy
What feature of the pattern of employ,ent known as the gig economy has the most impact on
the general economy?
- the generally low rates of pay
,- treating workers as independent contractors
- it's prevalence in the service sector
- the short term nature of engagements - Answer Treating workers as independent contractors
A country is described as being in recession. Which of the following is most likely?
- it is growing at less than the rate of inflation
- it is suffering a balance of payments deficit
- it's GDP has been falling for six months
- it's GDP has just started to fall - Answer It's GDP has been falling for six months
Which ONE of the following represents the shortfall between government revenues and
expenditure?
- PSNCR
- Balance of payments
- GDP
- RPI - Answer PSNCR
The main difference between the retail price index and the consumer price index relates to the
costs associated with:
- Food
- Entertainment
- Mortgages
- Transport - Answer Mortgages
The monetary policy committee of which organisation sets UK interest rates:
- The department of business, enterprise and regulatory reform
- The treasury
- The office of fair trading
- The Bank of England - Answer The Bank of England
Which one of the following measure the difference between a country's exports and imports?
, - Balance of payments
- Gross domestic product
- Gross national product
- Public sector net cash requirement - Answer Balance of payments
In which of the following economies would you generally expect the fewest barriers to trade or
controls over foreign exchange?
- Market
- Mixed
- Open
- State-controlled - Answer Open
Which one of the following is most likely to benefit from high levels of inflation?
- Pensioners
- Exporters
- Employees
- Borrowers - Answer Borrowers
Which one of the following is the index used as the standard measure of inflation throughout
the EU?
- RPI
- GDP
- RPIX
- CPI - Answer CPI
A company providing custodian services has changed its price review frequency from annually
to quarterly. Which one of the following recent situations is most likely to be the cause of this
change?
- A high level of inflation
- A sharp drop in interest rates
- A large increase in revenues
CHAP QUESTIONS And Rationales
2026/2027 Updated.
A custodian bank will typically look after securities on behalf of which of the following:
- Fund managers, pension funds and insurance companies
- Pension funds and insurance companies only
- fund managers and pension funds only
- insurance companies and fund managers only - Answer Fund managers, pension funds and
insurance companies
Which of the following are regarded as rivals to traditional stock exchanges?
- exchange traded funds
- multilateral trading facilities
- over-the-counter markets
- foreign exchange markets - Answer Multilateral trading facilities
An investment strategy generated via robo-advice tends to be:
- Passively focussed
- high risk
- geared towards capital accumulation
- socially responsible - Answer Passively focussed
A bank that specialises in corporate finance and advisory work, securities trading and
investment management is generally known as:
- an investment bank
- an international bank
- a merchant bank
- a savings bank - Answer An investment bank
,A mutually owned organisation offering banking services to individual customers is typically
described as which of the following:
- savings institution
- retail bank
- pension fund
- custodian bank - Answer Savings institution
A particular country is exhibiting an invisible trade surplus and a visible trade deficit. How would
the country best be described?
- Manufacturing-driven
- in balance
- post industrial
- in recession - Answer Post industrial
The Bank of England assumes direct responsibility for all the following central bank activities,
EXCEPT:
- Holding the nations gold & currency reserves
- Issuing the notes and coins in circulation
- Managing the national debt
- Acting as the lender of last resort - Answer Managing the national debt
Which of the following types of economy is most likely to have production and allocation of
resources planned in advance?
- Open economy
- Market economy
- Mixed economy
- state controlled economy - Answer State controlled economy
What feature of the pattern of employ,ent known as the gig economy has the most impact on
the general economy?
- the generally low rates of pay
,- treating workers as independent contractors
- it's prevalence in the service sector
- the short term nature of engagements - Answer Treating workers as independent contractors
A country is described as being in recession. Which of the following is most likely?
- it is growing at less than the rate of inflation
- it is suffering a balance of payments deficit
- it's GDP has been falling for six months
- it's GDP has just started to fall - Answer It's GDP has been falling for six months
Which ONE of the following represents the shortfall between government revenues and
expenditure?
- PSNCR
- Balance of payments
- GDP
- RPI - Answer PSNCR
The main difference between the retail price index and the consumer price index relates to the
costs associated with:
- Food
- Entertainment
- Mortgages
- Transport - Answer Mortgages
The monetary policy committee of which organisation sets UK interest rates:
- The department of business, enterprise and regulatory reform
- The treasury
- The office of fair trading
- The Bank of England - Answer The Bank of England
Which one of the following measure the difference between a country's exports and imports?
, - Balance of payments
- Gross domestic product
- Gross national product
- Public sector net cash requirement - Answer Balance of payments
In which of the following economies would you generally expect the fewest barriers to trade or
controls over foreign exchange?
- Market
- Mixed
- Open
- State-controlled - Answer Open
Which one of the following is most likely to benefit from high levels of inflation?
- Pensioners
- Exporters
- Employees
- Borrowers - Answer Borrowers
Which one of the following is the index used as the standard measure of inflation throughout
the EU?
- RPI
- GDP
- RPIX
- CPI - Answer CPI
A company providing custodian services has changed its price review frequency from annually
to quarterly. Which one of the following recent situations is most likely to be the cause of this
change?
- A high level of inflation
- A sharp drop in interest rates
- A large increase in revenues
