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1. Which of the following is considered an example of unique circumstances in an IPS?

1. Legal and regulatory
2. Tax consideration
3. Preference about investment duration
4. Diversification needs

2. You decide to make 5 annual investments of $2,000 each starting a year from now. Your aim is to accumulate $15,000 by the end of 5 years.To achieve this, you will need a rate of return of 20%. Which of the following Excel formula is applicable for this calculation?

1. The NPV() formula
2. The FV() formula
3. The RATE() formula
4. The PV() formula

3. Which of the following is correct about the risk?

1. An investors ability to take risk is always the same as his or her willingness to take risk
2. Only absolute risk objectives will be included in an IPS
3. A risk seeking investor will choose to participate in the gamble for the possibility of getting more money even if this means he or she has a possibility to lose money
4. A relative risk objective needs to be associated with a relative return objective for the same client

4. You have a loan principal of $100,000. The annual interest rate is 3% and the loan term is 30 years. Using the PMT() formula, calculate the amount of each annual payment.

1. $30,011.45
2. $5,101.93
3. $30,005.21
4. $5,036.20

5. Which of the following is not included in the CAPM?

1. Unsystematic risk
2. Risk-free rate
3. Standardised covariance term
4. Market risk premium

6. Which of the following statements about portfolio management is correct:

1. Once constructed, there is no need to rebalance the portfolio
2. Given the same level of risk, portfolio with higher Sharpe Ratio generates higher return
3. We should always invest in the asset with highest return
4. It is a good practice to invest all our money into one type of assets

7. Which of the following statements is incorrect?

1. An investor can expect to get one unit of market risk premium in additional return for every unit of market risk that the investor is willing to accept.
2. The efficient frontier coincides with the top portion of the minimum-variance frontier
3. Capital allocation line is a function of risk and return of a portfolio given the risk-free rate
4. The global minimum-variance portfolio is the portfolio that has the lowest standard deviation of all portfolios with a given expected return

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