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CISI International Certificate in Wealth & Investment Management Sample Questions:
1. Why do investors demand a risk premium?
A) To cover the tax payments on profitable trades
B) To cover the expenses of the fund manager
C) To compensate them for accepting additional risk
D) So that they can outperform the benchmark
2. Which of the following underlies the pillars of risk tolerance?
A) Education
B) Experience
C) Sociological traits
D) Psychological traits
3. Why would a government's expansionary fiscal policy lead to a larger budget deficit?
A) Less money is collected in taxes
B) Interest rates fall faster than usual
C) Private sector spending drops rapidly
D) Government spending is funded through borrowing
4. Which of the following is a characteristic of a perfectly competitive industry?
A) There are a range of market prices at which all output produced by any one firm can be sold
B) Firms face barriers to entry or exit from the industry
C) Numerous heterogeneous products are produced by all firms in the industry
D) There is an infinite number of consumers who all face the same market price
5. Your client estimates that they will require £40,000 of income annually to live off when they retire. Personal plus state pension will provide £35,000. They wish to retire in 20 years' time. It is estimated that they can earn
3% per annum and inflation has been forecast at 2% over the next 20 years. Interest rates are currently 1.5%.
Allowing for inflation, what lump sum would they need to accrue to supplement their pension?
A) £247,658
B) £165,105
C) £331,631
D) £495,316
Solutions:
Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: C |