QUESTION 1

1.Securitisation that involves debt securities issued by a securitisation vehicle to which the underlying pool of assets has been transferred from the original asset owner's balance sheet is known as:

synthetic securitisation

on-balance-sheet securitisation

risk-transfer securitisation

None of the options

true-sale securitisation

1 points

QUESTION 2

1.Which of the following are characteristics of exchange traded notes (ETNs)?

i. The funds obtained by issuing an ETN are directly invested in a physical commodity.

ii. Unlike listed shares, ETNs are traded like unit trusts, that is, only at the end of a business day.

iii. Investors in ETNs take on credit risk of the issuer.

iv. All ETNs are issued by banks.

(i), (ii) and (iii) only

(iii) and (iv) only

None of the options

(i) and (ii) only

(i), (iii) and (iv) only

1 points

QUESTION 3

1.

Which of the following statements about interest rate swaps are correct?

i. They are regarded as off-balance sheet financial instruments.

ii. During the life of the swap, payments between the two parties are based on a notional principal amount.

iii. The periodic payments are executed in two different currencies.

iv. The two parties exchange their individual debt obligations on reference dates.

(iii) and (iv) only

(i), (iii) and (iv) only

None of the options

(i) and (ii) only

(i), (ii) and (iii) only

1 points

QUESTION 4

1.The phenomenon where investors exploit interest rate differences by borrowing cheaply in countries with low interest rates and investing the funds in countries where interest rates are significantly higher is known as

differential trade

repo trade

carry trade

funding trade

None of the options

1 points

QUESTION 5

1.A bond with a call feature is most likely to be called when:

None of the options

market interest rates fall below the bond's coupon rate

the bond's yield to maturity increases above its coupon rate

market interest rates rise above the bond's coupon rate

the bond's market price falls below its par value

1 points

QUESTION 6

1.Which of the following provide a source of return from rand-denominated, commodity-linked, exchange-traded ETNs and ETFs that are invested in foreign-referenced futures?

i. Interest earned on the cash value of the collateral

ii. Changes in the exchange rate of the rand

iii. Return from changes in the price of the futures contract

iv. Returns produced from rolling the futures position over

(ii) and (iv) only

None of the options

(i), (ii), (iii) and (iv)

(i), (ii) and (iii) only

(i), (iii) and (iv) only

1 points

QUESTION 7

1.

A local merchant is importing a huge consignment of foreign goods and would like to hedge himself against possible currency fluctuations but is not sure exactly when the foreign currency will be required. Which ONE of the following instruments is most suitable to the importer?

Foreign exchange time option

Foreign exchange swap transaction

None of the options

Foreign exchange call option

Foreign exchange forward-forward transaction

1 points

QUESTION 8

1.

The minimum share capital requirement for listing on the Alt^Xboard of the JSE is:

R1 million

None of the options

R0,5 million

R5 million

R2 million

1 points

QUESTION 9

1.

Which ONE of the following types of preference share can be exchanged for ordinary shares on specified terms?

Cumulative preference shares

Convertible preference shares

None of the options

Redeemable preference shares

Participating preference shares

1 points

QUESTION 10

1.

According to the relative valuation method, the intrinsic value of a share is derived by:

calculating the present value of future cash flows

determining the share's co-movement with the market

None of the options

estimating the expected return and variability of return for the share

expressing the current price of the share as a multiple of earnings