Online Access Free ICWIM Practice Test

Standard deviation is used when analysing portfolios because it:

• A.Identifies underperforming assets
• B.Allows for a comparison of volatility
• C.Makes it easier to track the performance against a benchmark
• D.Identifies profitable trades

The Arbitrage Pricing Theory (APT) assumes investors can sell short. This involves:

• A.Selling your shares and buying them back a short time later
• B.Not selling the whole of your shareholding in one trade
• C.Selling lots of securities over a short time frame
• D.Selling something you do not own, intending to buy it back at a lower price later

To minimise risk and maximise diversification, a portfolio should hold securities with:

• A.Positive correlation and high standard deviation
• B.Negative correlation and low standard deviation
• C.Negative correlation and high standard deviation
• D.Positive correlation and low standard deviation

Which of these banks are likely to have relatively few legacy issues?

• A.Retail bank
• B.Online bank
• C.Central bank
• D.Challenger bank

What causes the price of a closed-ended investment company to trade at a premium or discount to net asset value (NAV)?

• A.Supply and demand
• B.Current level of interest rates
• C.The level of charges within the fund
• D.The tax status of the fund