ICWIM

Which of the following elements would be included in a recommendation report to a client?A . Previous arrangementsB . RestrictionsC . Cost of livingD . Rate of inflationView AnswerAnswer: A Explanation: A recommendation report for a client should contain comprehensive details of their existing financial arrangements. This ensures that advice...

An execution-only sale usually means a sale where there is an absence of:A . ChargesB . AdviceC . ProductD . GuaranteeView AnswerAnswer: B Explanation: Understanding Execution-Only Sales: Execution-only sales occur when the client makes a financial transaction without receiving any advice or recommendations from the intermediary. The client assumes full...

Why is the process of prioritising the protection needs of your client important?A . To establish the net worth of your clientB . It provides an opportunity to establish a benchmarkC . To protect your firm from riskD . It allows you and the client to agree on an affordable...

"An approach which applies a theoretical price to a company’s shares by discounting the company’s expected future cash flow into infinity." This statement is describing the: A. Net asset value B. Market value added C. Dividend valuation model D. Economic value addedView AnswerAnswer: C Explanation: Dividend Valuation Model (DVM) The...

It is a regulatory requirement for financial advisers to explain any potential additional obligations for clients making a transaction in:A . BondsB . CommoditiesC . DerivativesD . EquitiesView AnswerAnswer: C Explanation: Financial advisers are required to explain the additional obligations associated with derivatives, such as margin requirements, leverage risks, and...

Stablecoins are less prone to price fluctuations because:A . They do not use blockchain technologyB . Their price is in US DollarsC . Their value is pegged to underlying assetsD . They are highly illiquidView AnswerAnswer: C Explanation: Stablecoin Characteristics: Stablecoins reduce price volatility by pegging their value to stable...

Which index tracking method requires a swap agreement?A . Full replicationB . Stratified SamplingC . Synthetic ReplicationD . OptimisationView AnswerAnswer: C Explanation: Synthetic replication involves tracking an index using derivatives such as swaps. A swap agreement allows the fund to replicate the index performance without holding the actual underlying assets,...

If two sets of data have a correlation coefficient of 1.0, they possess:A . No correlationB . Weak correlationC . Perfect negative correlationD . Perfect positive correlationView AnswerAnswer: D Explanation: Correlation Coefficient of 1.0: A correlation coefficient measures the strength and direction of the relationship between two datasets. A value...

Offshore foundations are often used as a suitable alternative to which similar type of arrangement?A . Limited liability partnershipsB . Credit unionsC . TrustsD . SICAVsView AnswerAnswer: C Explanation: Offshore foundations are often considered alternatives to trusts, as both are used for wealth structuring, asset protection, and estate planning. However,...

Which of the following underlies the pillars of risk tolerance? A. Psychological traits B. Sociological traits C. Education D. ExperienceView AnswerAnswer: A Explanation: Risk Tolerance Defined Risk tolerance is the degree of variability in investment returns that an investor is willing to withstand. Pillars of Risk Tolerance Psychological Traits: Key...