In retirement planning, which of the following is not correct?

Select one:

a.The activities of saving and investing can contribute to the county's economy.

b.To encourage a client to save and invest for retirement there is a need to know the client's motives for the future.

c.The purpose of saving and investing for the future is to build wealth and security for a future retiree.

d.A client will always sacrifice current assumption over the future rewards gained from saving for retirement.

In the process of Life Cycle Investing,

Select one:

a.There is actually no necessity to harmonise investment portfolios with changing needs in the life cycle.

b.It is common to reduce investment risk overtime by the use of asset diversification only.

c.A client should always maintain the same investments throughout his life cycle

d.There is actually a necessity to harmonise investment portfolios with changing needs in the life cycle.

In helping a client for retirement planning, a planner needs to be sensitive to a number of issues. Which of the following is correct?

Select one:

a.All statement are correct.

b.Dividing the portion of funds to short, medium and long-term needs is an important exercise by the planner.

c.There must be an optimal balance between financial spending and an enjoyable meaningful life.

d.The objectives of the client are more important than any other consideration.

Which of the following describes the steps involved in construction client's portfolio that follow market conditions, securities available and the needs of the clients?

Select one:

a.There are a sequential of 5-steps for investment portfolio construction.

b.All of the above are correct.

c.In a retirement portfolio, liquidity can be ignored as wealth accumulation is more important.

d.At the stage of allocation percentage, asset allocation and client's risk tolerance have to be considered first.

If the nominal rate of return of an investment is 8% and the inflation rate is 4%, the real rate of return should be more precisely at

Select one:

a.4%

b.4.25%

c.3.5%

d.3.85%

The statistics of a professionally managed fund has expected return of 10% and coefficient of variation 0.3. What is the standard deviation?

Select one:

a.3%

b.0.3%

c.30%

d.3.33%

With RM925,050 as retirement fund, Mr David was told that the fund would last for 15 years only if he were to receive RM80,000 per year, even if inflation is ignored. Mr David still insist on spreading the retirement fund to last for 20 years. If the fund is earning a return of 4% per annum how much should Mr David receive as his annual retirement income (no inflation factor).

Select one:

a.RM62,449

b.RM65,449

c.RM68,449

d.RM59,449

Joshua is looking at an investment vehicle that provides 8.5% before tax return. If Joshua's marginal tax rate is 21%, what is the tax-adjusted return that he will receive?

Select one:

a.6.42%

b.6.10%

c.6.72%

d.6.93%

Which of the following is not an essential component of a retirement portfolio?

Select one:

a.The current assets available also depend on the current and future income.

b.The selection of assets classes relies on client's income, security needs, growth, liquidity and flexible needs.

c.The net position of the investment returns requires a review of the effects of applicable taxes.

d.Positively-correlated assets are selected to reduce future volatility.

Which of the following action must be considered first if the retirement fund for the retiree is found to be insufficient?

Select one:

a.Find ways to readjust retirement resources available

b.Pre-allocate the spending based on expected retirement resources available.

c.Increase investment to match future needs

d.Maintain current lifestyle until retirement before adjusting

Which of the following statement is correct in describing diversification and correlation to provide the framework of a portfolio's total risk and return relationship.

Select one:

a.Negatively-correlated assets have a correlation coefficient of 0.

b.Positively-correlated assets are considered better investment strategies.

c.To reduce risk, uncorrelated assets are less effective than positively correlated assets.

d.Diversification is considered an essential part of constructing an efficient portfolio.

Coefficient of variation refers to

Select one:

a.Return per unit of risk

b.Risk per unit of return

c.The risk of investment

Which of the following statement is NOT CORRECT regarding the Constant Dollar-Cost Averaging Concept?

Select one:

a.Investing takes place regularly irrespective of the price of the investment.

b.It reduces the uncertainty in market timing.

c.It can only be applied to unit trust investment.

The decision to purchase stocks or bonds requires knowledge of how each asset class works. Which of the following is not correct?

Select one:

a.Time horizon of the investments is not an important factor.

b.The flexible portfolio approach is good in periods of volatility.

c.Bonds are always better in providing stable income over the long term.

d.Stocks generally outperform bonds over the long-term.

To construct an effective retirement portfolio, the following must be kept in mind except:

Select one:

a.It is important to make sure the needs and objectives of the client match.

b.The special needs and desires of the client have to be recognised.

c.Periodic and constant monitoring of the portfolio is necessary.

d.The portfolio does not need to be flexible to allow changes.