EMT Practice Test

1. Question Content...

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Question1: Offshore foundations are often used as a suitable alternative to which similar type of arrangement?

Question2: A firm has an existing client who is the head of a foreign state. What type of due diligence should the firm undertake if the client's spouse applies to become a client?

Question3: An execution-only sale usually means a sale where there is an absence of:

Question4: When analysing rates of return, why is a short-dated government bond considered to be the risk-free rate?

Question5: Equities have a higher risk/reward profile when compared to many other asset classes. Their use within a portfolio stems from:

Question6: An investor deposits £1,000 into an account that pays interest at the rate of 3% per year. If the interest is credited to the account at the end of the year and the investor leaves the money in the account for 5 years, how much money will be in the account at the end of the fifth year?

Question7: Standard deviation is used when analysing portfolios because it:

Question8: Which type of corporate action can only occur if a resolution is passed to forgo pre-emption rights?

Question9: Back-end loading is often associated with:

Question10: The coupon on a bond has been expressed in real terms, rather than as a nominal amount. This is because:

Question11: What is the most likely effect on the demand curve of an increase in consumer preference for a good?

Question12: Why might a portfolio manager use an equity fund rather than direct equity investment within a portfolio?

Question13: Why would a composite benchmark be needed to measure portfolio performance?

Question14: Which of the following investments is most suitable for a customer who desires income rather than capital gain and who is risk-averse?

Question15: If someone in a fiduciary position has personal or professional interests that compete with their duty to act in the client's best interest, this is called:

Question16: What fiduciary responsibility does a financial adviser have for their clients?

Question17: A non-profit, whole-of-life assurance policy, will pay:

Question18: When a UK-based investor receives overseas equity dividend income, which one of the following types of tax may have been deducted?

Question19: In economics, costs are defined as:

Question20: How does standard deviation provide investors with a measure of historical volatility?

Question21: Once a company reaches the point known as the minimum efficient scale, the "theory of the firm" suggests that the company should:

Question22: The concept of the Sharpe ratio is to measure the:

Question23: If the holder of a long futures contract sells it ahead of expiry, they are considered to have:

Question24: A rise in living standards will tend to:

Question25: The ongoing charges figure for a mutual fund should be included in its:

Question26: Under an accumulation and maintenance trust, when does the trustees' discretion over payments normally cease (if at all)?

Question27: Treasury bills are normally issued with a minimum maturity of:

Question28: Which one of the following would cause a shift to the right in aggregate demand?

Question29: How does 'relief at source' normally operate in relation to overseas dividend income?

Question30: What is the first action an adviser takes to ensure that their advice is suitable for a client?

Question31: What is the final stage of the money laundering process?

Question32: In what circumstances would a central bank use its foreign reserves in the currency markets?

Question33: A fiduciary relationship normally arises between:

Question34: A professional trader was given some price-sensitive, unpublished information in relation to a major grain supplier. As a direct result, they buy futures contracts on grain. Have they committed the offence of insider trading?

Question35: For what reason is holding bearer shares potentially disadvantageous?

Question36: A company recently increased its earnings per share figure by 10%. This means that the company's:

Question37: Which index could be used to measure inflation from the perspective of the seller?

Question38: How do imports and exports affect the Gross Domestic Product (GDP) calculation?

Question39: If two sets of data have a correlation coefficient of 1.0, they possess:

Question40: A market which employs an electronic order book to match buyers with sellers in strict order by price is known as:

Question41: Once an offshore foundation is established, who will normally be responsible for making ongoing decisions regarding the operational use of the foundation's assets?

Question42: What is a key feature of offshore trusts that can make them attractive to wealthy UK clients?

Question43: Personal accident policies will pay out: