QFA INVESTMENTS - SAMPLE PAPER 4
QUESTIONS AND ANSWERS
Maturity etransformation ein erelation eto efinancial eservices eis: e
A. ea emethod eof ediversifying einvestment erisk. e
B. eturning eshort eterm edeposits eand esavings einto elonger eterm eloans. e
C. ea eform eof eregulatory eintervention. e
D. ea efacility eto eallow ethe eeasy epayment eof ebills e- e✔✔B
turning eshort eterm edeposits eand esavings einto elonger eterm eloans.
The efinancial eservices emarket ein eIreland eenables eproviders eto ecollect esurplus
efunds eas esavings eand elend ethem eat ea emargin eto: e
A. eindividuals eonly. e
B. ebusinesses eonly. e
C. eindividuals eand ebusinesses eonly. e
D. eindividuals, ebusinesses, eand ethe eGovernment. e- e✔✔D
individuals, ebusinesses, eand ethe eGovernment.
Which eone eof ethe efollowing eis ealways estructured eas ea efinancial eco-operative? e
A. eA eretail ebank. e
B. eA ecredit eunion. e
C. eA eMIFID einvestment efirm. e
D. eA elife eassurance ecompany. e- e✔✔B
A ecredit eunion
Overdrafts eare echarged einterest: e
A. eonly ewhen ethe eoverdraft elimit ehas ebeen eexceeded. e
B. ewhen eused. e
C. eif enot eused. e
D. eonly ewhen efully edrawn e- e✔✔B
when eused.
Which eone eof ethe efollowing emarkets eis ea eregulated emarket efor eMiFID epurposes? e
,A. eIrish eStock eExchange eGlobal eExchange. e
B. eIrish eStock eExchange eEnterprise eSecurities. e
C. eIrish eStock eExchange eMain eSecurities. e
D. eIrish eStock eExchange eBond eSwap. e- e✔✔C
Irish eStock eExchange eMain eSecurities.
The econtrol eof einterest erates eis ewhich etype eof eeconomic epolicy? e
A. eFiscal. e
B. eCapital. e
C. eNational. e
D. eMonetary e- e✔✔D
Monetary
Which emeasurement eof ethe eIrish eeconomy eincludes ethe evalue eof egoods eand
eservices eproduced eby eIrish efirms eoperating ein eforeign ecountries? e
A. eForeign eNational eProduct e(FNP). e
B. eGross eDomestic eProduct e(GDP). e
C. eGross eNational eProduct e(GNP). e
D. eNet eNational eGrowth e(NNG) e- e✔✔C
Gross eNational eProduct e(GNP).
Deflation ecan ebe ecaused eby: e
(i) ean eincrease ein esales etax. e
(ii) ea ereduction ein eproducers emark eup e%. e
(iii) ea edecrease ein ethe elevel eof edemand efor egoods eand eservices e
A. e(i) eonly. e
B. e(iii) eonly. e
C. e(i) eand e(ii) eonly. e
D. e(ii) eand e(iii) eonly e- e✔✔D
(ii) eand e(iii) eonly
Joan eworks ein ethe etourist esector eof ethe eeconomy. eShe eis elaid eoff eeach eOctober
euntil ethe efollowing eMarch. eWhen eJoan ebecomes eunemployed ein eOctober, ethis eis
ean eexample eof eWHICH etype eof eunemployment? e
A. eDiscretionary. e
B. eFrictional. e
C. eSeasonal. e
D. eStructural. e- e✔✔C
Seasonal.
When ecompared eto eequities, eproperty eas ean einvestment eis eexpected eto: e
, A. eoffer ea elower ereturn. e
B. eoffer ea ehigher ereturn. e
C. eoffer elower eprotection eagainst einflation. e
D. ehave ea esignificantly elower elevel eof eliquidity. e- e✔✔D
have ea esignificantly elower elevel eof eliquidity.
Which eone eof ethe efollowing einvestment etypes ehas eshown ethe eHIGHEST elevel eof
evolatility eof ereturns eover ethe elonger eterm? e
A. eDeposits. e
B. eCorporate ebonds. e
C. eEquities. e
D. eGovernment ebonds e- e✔✔C
Equities.
The estandard edeviation eof einvestment ereturns eis ea eway eto emeasure: e
A. ecorrelation eof ereturns. e
B. einvestment erisk. e
C. ediversification e
D. einvestor econfidence e- e✔✔B
investment erisk.
Another eterm eused eto edescribe einvestment erisk eis: e
A. evolatility. e
B. ecorrelation. e
C. econcentration. e
D. emaximisation e- e✔✔A
volatility.
Which eof ethe efollowing efunds eprovides ediversification ebetween ethe emain easset
eclasses? e
A. eA emanaged efund einvesting ein ea emix eof eshares, ebonds eand eproperty. e
B. eAn eequity efund einvesting ein ea emix eof eEuropean eand einternational eequities. e
C. eA ebond efund einvesting ein ea emix eof ebonds eissued eby elarge einternational
ecompanies. e
D. eA edeposit efund, ewhich einvests ein edeposits ewith ea ewide erange eof ebanks e- e✔✔A
A emanaged efund einvesting ein ea emix eof eshares, ebonds eand eproperty.
If ethe eaverage egross edividend eyield eoffered eby eequities eis ecurrently e3% eper
eannum eand ethe egross eguaranteed eannual eyield eoffered eby elong eterm eGovernment
ebonds e(assumed eto ebe erisk efree) eis e2% eper eannum, ethe eyield egap eat ethis etime
eis: e
QUESTIONS AND ANSWERS
Maturity etransformation ein erelation eto efinancial eservices eis: e
A. ea emethod eof ediversifying einvestment erisk. e
B. eturning eshort eterm edeposits eand esavings einto elonger eterm eloans. e
C. ea eform eof eregulatory eintervention. e
D. ea efacility eto eallow ethe eeasy epayment eof ebills e- e✔✔B
turning eshort eterm edeposits eand esavings einto elonger eterm eloans.
The efinancial eservices emarket ein eIreland eenables eproviders eto ecollect esurplus
efunds eas esavings eand elend ethem eat ea emargin eto: e
A. eindividuals eonly. e
B. ebusinesses eonly. e
C. eindividuals eand ebusinesses eonly. e
D. eindividuals, ebusinesses, eand ethe eGovernment. e- e✔✔D
individuals, ebusinesses, eand ethe eGovernment.
Which eone eof ethe efollowing eis ealways estructured eas ea efinancial eco-operative? e
A. eA eretail ebank. e
B. eA ecredit eunion. e
C. eA eMIFID einvestment efirm. e
D. eA elife eassurance ecompany. e- e✔✔B
A ecredit eunion
Overdrafts eare echarged einterest: e
A. eonly ewhen ethe eoverdraft elimit ehas ebeen eexceeded. e
B. ewhen eused. e
C. eif enot eused. e
D. eonly ewhen efully edrawn e- e✔✔B
when eused.
Which eone eof ethe efollowing emarkets eis ea eregulated emarket efor eMiFID epurposes? e
,A. eIrish eStock eExchange eGlobal eExchange. e
B. eIrish eStock eExchange eEnterprise eSecurities. e
C. eIrish eStock eExchange eMain eSecurities. e
D. eIrish eStock eExchange eBond eSwap. e- e✔✔C
Irish eStock eExchange eMain eSecurities.
The econtrol eof einterest erates eis ewhich etype eof eeconomic epolicy? e
A. eFiscal. e
B. eCapital. e
C. eNational. e
D. eMonetary e- e✔✔D
Monetary
Which emeasurement eof ethe eIrish eeconomy eincludes ethe evalue eof egoods eand
eservices eproduced eby eIrish efirms eoperating ein eforeign ecountries? e
A. eForeign eNational eProduct e(FNP). e
B. eGross eDomestic eProduct e(GDP). e
C. eGross eNational eProduct e(GNP). e
D. eNet eNational eGrowth e(NNG) e- e✔✔C
Gross eNational eProduct e(GNP).
Deflation ecan ebe ecaused eby: e
(i) ean eincrease ein esales etax. e
(ii) ea ereduction ein eproducers emark eup e%. e
(iii) ea edecrease ein ethe elevel eof edemand efor egoods eand eservices e
A. e(i) eonly. e
B. e(iii) eonly. e
C. e(i) eand e(ii) eonly. e
D. e(ii) eand e(iii) eonly e- e✔✔D
(ii) eand e(iii) eonly
Joan eworks ein ethe etourist esector eof ethe eeconomy. eShe eis elaid eoff eeach eOctober
euntil ethe efollowing eMarch. eWhen eJoan ebecomes eunemployed ein eOctober, ethis eis
ean eexample eof eWHICH etype eof eunemployment? e
A. eDiscretionary. e
B. eFrictional. e
C. eSeasonal. e
D. eStructural. e- e✔✔C
Seasonal.
When ecompared eto eequities, eproperty eas ean einvestment eis eexpected eto: e
, A. eoffer ea elower ereturn. e
B. eoffer ea ehigher ereturn. e
C. eoffer elower eprotection eagainst einflation. e
D. ehave ea esignificantly elower elevel eof eliquidity. e- e✔✔D
have ea esignificantly elower elevel eof eliquidity.
Which eone eof ethe efollowing einvestment etypes ehas eshown ethe eHIGHEST elevel eof
evolatility eof ereturns eover ethe elonger eterm? e
A. eDeposits. e
B. eCorporate ebonds. e
C. eEquities. e
D. eGovernment ebonds e- e✔✔C
Equities.
The estandard edeviation eof einvestment ereturns eis ea eway eto emeasure: e
A. ecorrelation eof ereturns. e
B. einvestment erisk. e
C. ediversification e
D. einvestor econfidence e- e✔✔B
investment erisk.
Another eterm eused eto edescribe einvestment erisk eis: e
A. evolatility. e
B. ecorrelation. e
C. econcentration. e
D. emaximisation e- e✔✔A
volatility.
Which eof ethe efollowing efunds eprovides ediversification ebetween ethe emain easset
eclasses? e
A. eA emanaged efund einvesting ein ea emix eof eshares, ebonds eand eproperty. e
B. eAn eequity efund einvesting ein ea emix eof eEuropean eand einternational eequities. e
C. eA ebond efund einvesting ein ea emix eof ebonds eissued eby elarge einternational
ecompanies. e
D. eA edeposit efund, ewhich einvests ein edeposits ewith ea ewide erange eof ebanks e- e✔✔A
A emanaged efund einvesting ein ea emix eof eshares, ebonds eand eproperty.
If ethe eaverage egross edividend eyield eoffered eby eequities eis ecurrently e3% eper
eannum eand ethe egross eguaranteed eannual eyield eoffered eby elong eterm eGovernment
ebonds e(assumed eto ebe erisk efree) eis e2% eper eannum, ethe eyield egap eat ethis etime
eis: e
