QFA Investments Sample Paper 2
Questions And Answers
The financial services market in Ireland enables providers to collect surplus funds as savings
and lend them at a margin to:
A individuals only.
B businesses only.
C individuals and businesses only.
D individuals, businesses and the Government. - ANS D
1.1 - Functions
Home loan borrowers on a standard variable rate mortgage are subject to WHICH type of
investment risk?
A Currency.
B Liquidity.
C Interest rate.
D Inflation. - ANS C
1.1 - Functions of financial services
Which one of the following is always structured as a financial co-operative?
A A retail bank.
B A credit union.
C A MIFID investment firm.
D A life assurance company. - ANS B
1.2 - Key participants
Investment firms are also known as which type of firm?
A Section 10.
B Multi Agency.
C Authorised Advisers.
D MiFID. - ANS D
1.2 - Key participants
,Mary has entered a lease arrangement with a financial institution for a car. Which one of the
following is correct?
A The financial institution never owns the car.
B Mary automatically becomes the owner of
the car when she signs the lease.
C The financial institution owns the car during the term of the lease.
D Mary automatically becomes the owner of the car when she makes the first payment. - ANS
C
1.3 - Main financial services provided
Which one of the following markets is a regulated market for MiFID purposes?
A Irish Stock Exchange Global Exchange.
B Irish Stock Exchange Enterprise Securities.
C Irish Stock Exchange Main Securities.
D Irish Stock Exchange Bond Swap. - ANS C
1.5.1 - Markets
The control of the magnitude of the money supply in the economy is which type of economic
policy?
A Fiscal.
B Capital.
C National.
D Monetary. - ANS D
2.1.1 - Monetary policy
Which measurement of the Irish economy includes the value of goods and services produced by
Irish firms operating in foreign countries?
A Foreign National Product (FNP).
B Gross Domestic Product (GDP).
C Gross National Product (GNP).
D Net National Growth (NNG) - ANS C
2.2 - Economic growth
Deflation can be caused by:
(i) an increase in sales tax.
(ii) a reduction in producers mark up %.
(iii) a decrease in the level of demand for goods and services.
A (i) only.
B (iii) only.
, C (i) and (ii) only.
D (ii) and (iii) only. - ANS D
2.2.3 - Causes of deflation
The benefits of increased international trade include which one of the following:
A total output is increased.
B higher inflation.
C greater market inefficiencies.
D concentration of wealth. - ANS A
2.4 - International trade
When compared to equities, property as an investment is expected to:
A offer a lower return.
B offer a higher return.
C offer lower protection against inflation.
D have a significantly lower level of liquidity. - ANS D
3.1 - Main investment asset classes
Traditional investment asset classes include:
(i) bonds.
(ii) gold.
(iii) equities.
A (i) and (ii) only.
B (i) and (iii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS B
3.1 - Main investment asset classes
Which one of the following would NOT be considered to be an example of an alternative
investment class?
A Gold.
B Private equity.
C Commodities.
D Government bonds. - ANS D
3.3 - Alternative asset classes
The standard deviation of investment returns is a way to measure:
A correlation of returns.
Questions And Answers
The financial services market in Ireland enables providers to collect surplus funds as savings
and lend them at a margin to:
A individuals only.
B businesses only.
C individuals and businesses only.
D individuals, businesses and the Government. - ANS D
1.1 - Functions
Home loan borrowers on a standard variable rate mortgage are subject to WHICH type of
investment risk?
A Currency.
B Liquidity.
C Interest rate.
D Inflation. - ANS C
1.1 - Functions of financial services
Which one of the following is always structured as a financial co-operative?
A A retail bank.
B A credit union.
C A MIFID investment firm.
D A life assurance company. - ANS B
1.2 - Key participants
Investment firms are also known as which type of firm?
A Section 10.
B Multi Agency.
C Authorised Advisers.
D MiFID. - ANS D
1.2 - Key participants
,Mary has entered a lease arrangement with a financial institution for a car. Which one of the
following is correct?
A The financial institution never owns the car.
B Mary automatically becomes the owner of
the car when she signs the lease.
C The financial institution owns the car during the term of the lease.
D Mary automatically becomes the owner of the car when she makes the first payment. - ANS
C
1.3 - Main financial services provided
Which one of the following markets is a regulated market for MiFID purposes?
A Irish Stock Exchange Global Exchange.
B Irish Stock Exchange Enterprise Securities.
C Irish Stock Exchange Main Securities.
D Irish Stock Exchange Bond Swap. - ANS C
1.5.1 - Markets
The control of the magnitude of the money supply in the economy is which type of economic
policy?
A Fiscal.
B Capital.
C National.
D Monetary. - ANS D
2.1.1 - Monetary policy
Which measurement of the Irish economy includes the value of goods and services produced by
Irish firms operating in foreign countries?
A Foreign National Product (FNP).
B Gross Domestic Product (GDP).
C Gross National Product (GNP).
D Net National Growth (NNG) - ANS C
2.2 - Economic growth
Deflation can be caused by:
(i) an increase in sales tax.
(ii) a reduction in producers mark up %.
(iii) a decrease in the level of demand for goods and services.
A (i) only.
B (iii) only.
, C (i) and (ii) only.
D (ii) and (iii) only. - ANS D
2.2.3 - Causes of deflation
The benefits of increased international trade include which one of the following:
A total output is increased.
B higher inflation.
C greater market inefficiencies.
D concentration of wealth. - ANS A
2.4 - International trade
When compared to equities, property as an investment is expected to:
A offer a lower return.
B offer a higher return.
C offer lower protection against inflation.
D have a significantly lower level of liquidity. - ANS D
3.1 - Main investment asset classes
Traditional investment asset classes include:
(i) bonds.
(ii) gold.
(iii) equities.
A (i) and (ii) only.
B (i) and (iii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS B
3.1 - Main investment asset classes
Which one of the following would NOT be considered to be an example of an alternative
investment class?
A Gold.
B Private equity.
C Commodities.
D Government bonds. - ANS D
3.3 - Alternative asset classes
The standard deviation of investment returns is a way to measure:
A correlation of returns.
