CISI INVESTMENT RISK TAXATION CORE MAIN
EXAMS SET QUESTIONS AND ANSWERS SURE A+
✔✔Security tokens - ✔✔has features similar to general investments such as asset
ownership rights, entitlement to a share of future profits, repayment of a specific sum of
money, or tradability
✔✔Utility tokens - ✔✔gives access to services and products
✔✔fiat money - ✔✔a store of value • a medium of exchange with which to make
payments • a unit of account with which to measure the value of any particular item that
is for sale.
✔✔money market - ✔✔a market in which money is lent for periods of one year or less
a money market instrument is at low risk of generating an income or capital return and
they tend to preserve the nominal value of the amount invested.
✔✔capital market - ✔✔market in which money is lent for periods longer than a year
✔✔Treasury bills - ✔✔Issued by the DMO on behalf of the Treasury. They are zero-
coupon instruments and issued at a discount to par
, ✔✔Certificates of deposit - ✔✔these are issued by banks in return for deposited money
and are tradeable on the money markets. Issued at discount to par w/ no coupon
✔✔commercial paper - ✔✔corporate equivalent of a treasury bill, short-term unsecured
debt issued by large corporations
✔✔Short-term money market funds - ✔✔can have a constant or a fluctuating net asset
value (NAV) reduce issueer risk
✔✔Money market funds - ✔✔have a fluctuating NAV
✔✔currency quotes - ✔✔the first currency is the base currency and the second is the
counter or quote currency. . The base currency is always equal to one unit of that
currency
✔✔settlement of FX - ✔✔CLS Bank
✔✔investing in property - ✔✔provided positive real long-term returns
✔✔personal savings allowance - ✔✔o remove tax on up to £1,000 of savings income
for basic rate taxpayers, and up to £500 for higher rate taxpayers
✔✔What is the ACD and depository responsible for in an OEIC? - ✔✔The Authorised
Corporate Director (ACD) is responsible for the day-to-day management of the
investments in the fund, valuing and pricing the fund, and dealing with investors.
The Depository is responsible for looking after investments on behalf of shareholders
and overseeing the activities of the ACD.
✔✔OEIC definition and other names? - ✔✔Collective investment scheme (CIS)
structured as a company, with investors holding shares. Single and dual pricing strategy
used.
Investment Companies with Variable Capital (ICVC)
Societé d'Investment À Capital Variable (SICAV)
✔✔Definition/Characteristics of an Investment Trust? - ✔✔It is a listed company on an
exchange that has directors and shareholders. Their diversified investments lead to less
risk for shareholders. They are also allowed to borrow money from the bank for gearing
unlike an OEIC and Unit Trust.
They are closed-ended as the no. of shares remain fixed for many years.
✔✔REIT definition/characteristics? - ✔✔Real Estate Investment Trust.
EXAMS SET QUESTIONS AND ANSWERS SURE A+
✔✔Security tokens - ✔✔has features similar to general investments such as asset
ownership rights, entitlement to a share of future profits, repayment of a specific sum of
money, or tradability
✔✔Utility tokens - ✔✔gives access to services and products
✔✔fiat money - ✔✔a store of value • a medium of exchange with which to make
payments • a unit of account with which to measure the value of any particular item that
is for sale.
✔✔money market - ✔✔a market in which money is lent for periods of one year or less
a money market instrument is at low risk of generating an income or capital return and
they tend to preserve the nominal value of the amount invested.
✔✔capital market - ✔✔market in which money is lent for periods longer than a year
✔✔Treasury bills - ✔✔Issued by the DMO on behalf of the Treasury. They are zero-
coupon instruments and issued at a discount to par
, ✔✔Certificates of deposit - ✔✔these are issued by banks in return for deposited money
and are tradeable on the money markets. Issued at discount to par w/ no coupon
✔✔commercial paper - ✔✔corporate equivalent of a treasury bill, short-term unsecured
debt issued by large corporations
✔✔Short-term money market funds - ✔✔can have a constant or a fluctuating net asset
value (NAV) reduce issueer risk
✔✔Money market funds - ✔✔have a fluctuating NAV
✔✔currency quotes - ✔✔the first currency is the base currency and the second is the
counter or quote currency. . The base currency is always equal to one unit of that
currency
✔✔settlement of FX - ✔✔CLS Bank
✔✔investing in property - ✔✔provided positive real long-term returns
✔✔personal savings allowance - ✔✔o remove tax on up to £1,000 of savings income
for basic rate taxpayers, and up to £500 for higher rate taxpayers
✔✔What is the ACD and depository responsible for in an OEIC? - ✔✔The Authorised
Corporate Director (ACD) is responsible for the day-to-day management of the
investments in the fund, valuing and pricing the fund, and dealing with investors.
The Depository is responsible for looking after investments on behalf of shareholders
and overseeing the activities of the ACD.
✔✔OEIC definition and other names? - ✔✔Collective investment scheme (CIS)
structured as a company, with investors holding shares. Single and dual pricing strategy
used.
Investment Companies with Variable Capital (ICVC)
Societé d'Investment À Capital Variable (SICAV)
✔✔Definition/Characteristics of an Investment Trust? - ✔✔It is a listed company on an
exchange that has directors and shareholders. Their diversified investments lead to less
risk for shareholders. They are also allowed to borrow money from the bank for gearing
unlike an OEIC and Unit Trust.
They are closed-ended as the no. of shares remain fixed for many years.
✔✔REIT definition/characteristics? - ✔✔Real Estate Investment Trust.
