FINA 313- The RBA conducts market operations

7. Exchange settlement accounts:

A.must be in credit

B.hold funds that belong to banks and other financial market dealers

C.earn a return of 25 bps less than the cash rate

D.are the means of settling transactions between institutions.

E.All of these.

8. The RBA conducts market operations:

A.to offset the impact of its own or government transactions upon the cash rate

B.once a month only

C.to offset the impact of transfers between ADIs on the cash rate

D.secretly, so that the market does not know its position

E.All of these.

9. The role of the primary market is to:

A.provide investors with liquidity

B.discover the price of securities

C.raise funds for issuers

D.reflect general price movements through benchmark indices.

E.All of these.

10. Which of the following is NOT a feature of secondary markets?

A.A trading platform (such as a computer program) that enables trading.

B.Trading rules and procedures.

C.A centralised trading room.

D.Settlement procedures.

E.Standardised securities.

11. The activities of superannuation schemes include:

A.the collection of regular payments by employers on behalf of their employees

B.the investment of funds over various asset classes

C.the release of funds to the employee at retirement

D.earning fees for the services they provide.

E.All of these.

12. Which of the following can be described as a ‘defensive’ asset class?

A.Australian equities

B.Overseas equities

C.Property

D.Alternative investments

E.Debt securities

13. Individuals are willing to pay for general and medical insurance:

A.because of the high investment returns

B.to achieve the benefits of diversification

C.because they are low-cost

D.because they wish to avoid the risk of incurring a large loss as a result of a specified event.

E.All of these.

14. ‘Growth’, ‘income’ and ‘balanced’ are terms used to describe:

A.insurance policies

B.private equity funds

C.cash management trusts

D.equity trusts

E.hedge funds.

15. Which of the following is NOT a benefit of investing through managed funds?

A.Reduced research costs

B.Reduced transactions costs

C.Customised portfolios

D.Diversification

E.Expertise