Q6. STRIPS are:

1. Government-backed schemes that allow investors to hedge against market risk.
2. Government bonds linked to inflation rates.
3. Tax-free saving accounts aimed at increasing retirement income
4. Corporate bonds
5. None of the above

(4 marks)

Q7. A cap on a mortgage:

1. Allows mortgagees not to pay above the capped interest rate
2. Is used when buying a mortgage-backed security to avoid it losing value
3. Is provided for free by mortgage providers
4. Is only used by investment banks
5. None of the above

(4 marks)

Q8. Growth rates of value stocks tend to:

a) Be above industry average

b) Be overvalued

c) Be lower than the ones of growth companies in the same industry

d) Be zero

e) None of the above.

(4 marks)

Q9. Hedge Funds differ from Mutual Funds:

a) In terms of types of investors

b) In terms of regulations

c) In terms of investment strategies

d) For their lack of transparency

e) All of the above

(4 marks)

Q10. Mutual Funds:

a) Are riskier than direct investments in shares because of their higher diversification

b) Are always a good investment as they aim to beat the markets

c) Only invest in value stocks and bonds

d) Provide investors with diversification and access to wider sets of securities

e) None of the above

(4 marks)