ICWIM exam

What fiduciary responsibility does a financial adviser have for their clients?A . Decrease the overall risk of their portfolioB . Provide their services at a competitive feeC . Act in the best interests of their clientsD . Offer conservative advice with low riskView AnswerAnswer: C Explanation: Fiduciary Duty: A fiduciary...

The management of investment portfolios of collective investment schemes, pension funds, insurance funds, hedge funds, and private equity would normally be considered to fall into the scope of: A. The retail financial sector B. The wholesale financial sector C. Family offices D. Private bankingView AnswerAnswer: B Explanation: Wholesale Financial Sector...

How would an active fund manager seek to avoid underperforming their peer group when deciding on asset allocation? A. Through the use of asset allocation by consensus B. By assessing the prospects for each main asset class C. By hedging currency and market risk D. Through the use of quantitative...

Which type of investment is associated with providing finance to growing companies with the objective of exiting via a profitable stock market listing?A . Convertible bondsB . Preference sharesC . Private equityD . Structured productsView AnswerAnswer: C Explanation: Private Equity and Growing Companies: Private equity involves investing in privately-held companies...

If someone in a fiduciary position has personal or professional interests that compete with their duty to act in the client’s best interest, this is called:A . Discretionary managementB . A regulatory breachC . Full disclosureD . A conflict of interestView AnswerAnswer: D Explanation: Conflict of Interest Definition: A fiduciary...

How does standard deviation provide investors with a measure of historical volatility?A . By the analysis of historical share price movementsB . Through the measurement of the highs and lows of each assetC . By measuring the degree of fluctuation around the meanD . Through the measurement of share price...

Which of the following elements would be included in a recommendation report to a client?A . Previous arrangementsB . RestrictionsC . Cost of livingD . Rate of inflationView AnswerAnswer: A Explanation: A recommendation report for a client should contain comprehensive details of their existing financial arrangements. This ensures that advice...

An execution-only sale usually means a sale where there is an absence of:A . ChargesB . AdviceC . ProductD . GuaranteeView AnswerAnswer: B Explanation: Understanding Execution-Only Sales: Execution-only sales occur when the client makes a financial transaction without receiving any advice or recommendations from the intermediary. The client assumes full...

Why is the process of prioritising the protection needs of your client important?A . To establish the net worth of your clientB . It provides an opportunity to establish a benchmarkC . To protect your firm from riskD . It allows you and the client to agree on an affordable...

"An approach which applies a theoretical price to a company’s shares by discounting the company’s expected future cash flow into infinity." This statement is describing the: A. Net asset value B. Market value added C. Dividend valuation model D. Economic value addedView AnswerAnswer: C Explanation: Dividend Valuation Model (DVM) The...