• Which of the following statements is CORRECT about the yield curve?

A The yield curve shows the behaviour of interest rate forecasts.

B When short-term rates are lower than long-term rates, there is a downward-sloping yield curve.

C A downward-sloping yield curve shows that investors demand an additional risk premium for lending money over the long term.

D A downward-sloping yield curve indicates that the market expects a future rise in interest rates.

• What type of analysis uses ratio analysis to evaluate equities?

A Technical analysis.

B Qualitative analysis.

C Fundamental analysis.

D Top-down analysis.

• The time weighted return is a method of measuring performance. Which of the following statements BEST describes time weighted return?

A Time weighted return on investment considers the impact of capital inflows and outflows of an investment.

B The rate of return that discounts a portfolios terminal value and interim cash flows back to its initial value.

C The discount rate that equates the present value of future cash flows with the market value.

D The probability weighted return of cash flows in a portfolio.

• Investments in smaller company stock compared to investments in larger company stock are generally:

A more volatile because they are less liquid, have less stock issued and have less diversified sources of income.

B more volatile because they are less liquid, have less stock issued and have more diversified sources of income.

C less volatile because they are less liquid, have less stock issued and have less diversified sources of income.

D less volatile because they are less liquid, have less stock issued and have more diversified sources of income.

• In the managed funds market, large institutional investors are positioned:

A in the retail market.

B in the wholesale market.

C somewhere between the retail and wholesale markets.

D in the same group as private client investors.