UITF Practice Test

Question 1
Module on Investment
This is a type of Investment that is not allowed for UITF. (DIFFICULT)

Response: Loans
Correct answer: Loans
Score: 1 out of 1 Yes
Question 2
Government Securities are risk free. It has no credit or market risk.
Response: False
Correct answer: False
Question 3
UITF Classification
A type of UITF that pays out income on a regular basis

Response: Unity Paying Fund
Correct answer: Unity Paying Fund
Question 4
Module I: Basic of Trust
What is not applicable to UITF?

Response: Uses the marked-to-market and amortized cost valuation method
Correct answer: Uses the marked-to-market and amortized cost valuation method
Question 5
Module II: Investments
Diversification is investing in one asset class only to reduce risk

Response: False
Question 6
Asset Classes
A benchmark is used to gauge or measure the performance of an UITF. If the performance of the UITF is
lower than benchmark then the performance is considered underperforming.
Response: True
Correct answer: True
Question 7
Module on Investing
UITF’s are allowed to invest in derivatives to increase NAVPU

Response: False (Not allowed)
Correct answer: False (Not allowed)
Question 8
Basic of Investing / Financial Objectives
You should convince a client to invest all his savings in order for his/her assets to grow.
Response: False
Question 9
Module on UITF Distribution
The ____ reflects the latest information on the UITF and relevant risks. (BASIC)
Response: Key Information and Disclosure Statement
Correct answer: Key Information and Disclosure Statement
Question 10
What document contains the detailed terms and condition of a UITF?
Response: Declaration of Trust or Plan Rules
Correct answer: Declaration of Trust or Plan Rules
Question 11
UITF Classification
A type of UITF with portfolio of fixed income securities and equities

Response: Balanced
Correct answer: Balanced
Question 12
______ Fees that are charged to UITFs.
Response: Trust Fees
Correct answer: Trust Fees
Question 13
The table below shows the allowed UITFs for the corresponding client risk profile:
UITF Client Risk Profile

Basic Money Market Funds Conservative
Enhanced Money Market Fund Moderately Conservative
Bond Fund Moderate
Balanced Fund Balanced
Equity Fund Aggressive
Investor with moderate risk profile may invest in equity fund.
Response: Yes, subject to compliance with the requirements of option for CSA re-classification
Correct answer: Yes, subject to compliance with the requirements of option for CSA re-classification
Question 14
UITF Account Opening Process
A client may waive the result of the Client Suitability Assessment and opt to invest in a UITF product
appropriate for those with higher risk profile.
Response: True
Question 15
It is a special committee which reports directly to the board of directors and is primarily responsible for
overseeing the fiduciary activities of the bank
Response: Trust Committee
Correct answer: Trust Committee
Question 16
When are the major types of asset classes currently allowed for UITF? Choose the best answer.
Response: Cash, tradable fixed Income and listed equities of currency
Correct answer: Cash, tradable fixed Income and listed equities of currency
Question 17
Customer Risk and Issues:
One of the primary reasons for the classification of Bond Funds into Medium Term, Intermediate Term
and long term is for purpose of differentiating the degree of risks of each type
Response: True
Question 18
Prior to investing, it is advisable for a client to first establish an “emergency fund” preferably maintained
in regular savings account
Response: True
Question 19
Module on Customer risk and issues
If interest rate increases, the price of the bond (DIFFICULT)

Response: Decreases
Correct answer: Decreases
Question 20
UITF Classification
A client with short-term investment horizon of less than 1 year should invest in the following type of
UITF
Response: Money Market
Correct answer: Money Market
Question 21
Module IV: Asset Classes
Total Net Asset is the summation of the market value of each investment less fees, taxes and other
qualified investments.
Response: No
Correct answer: No
Question 22
The table bellow shows the allowed UITFs for the corresponding client risk profile:

Bond Fund Moderate
Select what best described the basic Money Market Fund;Basic Money Market Fund can only Invest in
bank deposits;
Response: Basic Money Market Fund can only Invest in bank deposits;
Correct answer: Basic Money Market Fund can only Invest in bank deposits;
Question 23
Which of the following best describes Liquidity Risk?
Response: The possibility for an investor to experience losses due to inability to sell or convert assets
into cash immediately or in instances where to conversation to cash is possible but a loss.
Correct answer: The possibility for an investor to experience losses due to inability to sell or convert
assets into cash immediately or in instances where to conversation to cash is possible but a loss.
Question 24
Basics of unit investment trust fund
The following are features of UITFs except:

Response: Insured by the PDIC to PhP500,000.00
Correct answer: Insured by the PDIC to PhP500,000.00
Question 25
Module on Investing
Cash, time deposit, government securities are the same

Response: Asset class
Correct answer: Asset class
Question 26
Module on Trust
UITFs ___ funds denominated in pesos or any acceptable foreign currency. (BASIC)
Response: Open-ended
Correct answer: Open-ended
Question 27
Client should invest in just one type of UITF which best suits him/her
Response: False
Question 28
Money Market Funds invested in government securities/bond with less than one year is considered to
have a ___ risk profile. (DIFFICULT)
Response: Conservative
Correct answer: Conservative
Question 29
The “cooling-off” is the right of the client of a BSP-supervised financial institution (BSPI) to cancel
his/her contract without penalty. BSPIs should give their clients at least ________ banking days from the
signing of the contract to cancel.
Response: 2
Correct answer: 2
Question 30
UITFs are exempt from the following statutory reserves

Response: Single borrowers limit, reserve requirements only
Correct answer: Single borrowers limit, reserve requirements only
Question 31
Code of Conduct and Ethics
The organizational and management requires the separation of Trust from other unit/business of the
bank in the ff. manner:
Response: All of the above
Correct answer: All of the above
Question 32
Module V: Code of Ethics
Can a trust officer accept a trust business endorsed by the bank president without the standard KYC?
Response: No
Correct answer: No
Question 33
Module on Investing
Portfolio management aims to systematically combine investment instruments to produce maximum

return
Response: True
Question 34
Fundamentals of Investment
Situationers:
.A client is very interested in high return investment intended for his retirement use. He is a former
equities broker but his risk profile is moderate due to his short investment horizon. As a certified UITF
sales personnel , you explained that the risk profile is moderate and investment is for long term. You
should ask client to do the ff:
Response: Yes Ask the client to sign the waiver to the Customer Suitability Assessment Risk Profile
Correct answer: Yes Ask the client to sign the waiver to the Customer Suitability Assessment Risk Profile
Question 35
Module on Trust
This is the title used in referring to a written plan rule containing the terms and conditions pertaining to
a UITF. (BASIC)
Response: Declaration of Trust
Correct answer: Declaration of Trust
Question 36
The Trust can charge any fee at is pleases for as long as it can justify the charging of such.
Response: False
Question 37
Asset Classes
Situationers:
a 65 year old widow is looking at investing her P10M in a bond that yields 5% (4.2% net) with semi-
annual coupon payment and maturing 10 years. However, she is also considering a Unit paying Bond
UITF that can provide some regular income which she can withdraw in 5 years. She believes strongly
that she will live up to age 71, the age at which her mother and 4 sisters passed away. Using Horizon
matching, the CUSP suggests investment in the following UITFs:
Response: Yes Unit Paying Medium Term Bond Fund so she can enjoys some income from the payout of
units and investment horizon is 3 to 5 years
Correct answer: Yes Unit Paying Medium Term Bond Fund so she can enjoys some income from the
payout of units and investment horizon is 3 to 5 years
Question 38
Which of the following best describes “volatility”?
Response: refers to the upward and downward movement of price
Correct answer: refers to the upward and downward movement of price
Question 39
Can clients with “conservatives” risk profile invest in bond fund?
Response: Yes, subject to compliance with requirements on CSA re-classification
Correct answer: Yes, subject to compliance with requirements on CSA re-classification
Question 40
Asset Classes
A Feeder Fund and Feeder Funds should invest in target fund/s for at least what percentage of the fund?
Response: 90%
Correct answer: 90%
Question 41
Module III: Marketing and Distribution
A client wants to invest in an equity fund but there are no UITF marketing personnel around. Since she is
valued client. The branch personnel proceed with the UITF account opening and signed the documents.
Should the branch personnel proceed with the transaction?
Response: No
Correct answer: No
Question 42
Valued clients may opt to skip the UITF account opening process (CSA, Risk Disclosure and explanation
of the UITF terms and conditions) if they wish to do so.
Response: False
Question 43
Asset Classes
A balanced Fund can invest in a balanced portfolio composed of the following:

Response: Equities and Fixed Income
Correct answer: Equities and Fixed Income
Question 44
When is the right time to start investing?

Response: As early as possible
Correct answer: As early as possible
Question 45
It is the unrealized capital gain (or capital loss) in an investment. It is calculated by comparing the market
price of a security of the original purchase price. This gain or loss only becomes realized when the UITF
units are redeemed.
Response: Paper Gain/Loss
Correct answer: Paper Gain/Loss
Question 46
Who can sell/distribute UITF products?
Response: Qualified UITF sales personnel
Correct answer: Qualified UITF sales personnel
Question 47
Only a certified investment solicitor can sell a UITF

Response: No, a certified UITF salesman can sell a UITF
Correct answer: No, a certified UITF salesman can sell a UITF
Question 48
UITF are required to be audited by an external auditor _________.
Response: Annually;
Correct answer: Annually;
Question 49
How are the investment of UITFs valued?
Response: Marked-to-Market basis
Correct answer: Marked-to-Market basis
Question 50
Module I
Losses incurred by trust funds shall be exclusively for the account of

Response: Trustor
Correct answer: Trustor
Question 51
The following are the minimum information required in determining client suitability, except:
Response: None of the above
Correct answer: None of the above
Question 52
Both UITF and Mutual funds can be open-ended funds and closed-ended funds.
Response: False
Question 53
Which of the following best describes the practice of investing regularly, which may allow an investor to
lower the average cost of/her investment?
Response: Peso Cost Averaging
Correct answer: Peso Cost Averaging
Question 54
This document shall contain the key features and the prospective and outstanding investment of a UIT
fund.
Response: Key Information and investment Disclosure Statement
Correct answer: Key Information and investment Disclosure Statement
Question 55
The investment of MULTI-CLASS UTIFUND means it is a pool of different asset classes and contributors
on investors are issued units of participation per asset class.
Response: False
Question 56
Which of the following is not included in the statement under participating Trust Agreement?
Response: Losses or income are for the account of the trustor/investor
Correct answer: Losses or income are for the account of the trustor/investor
Question 57
The statement: A money market fund is absolutely credit risk free, is

Response: False
Question 58
NSituationers:
When a client approaches you to place his UITF investments in certain security, what will you advise
him/her? (DIFFICULT)
Response: UITFs are exclusively managed by the trustee in accordance with the approved Declaration of
Trust.
Correct answer: UITFs are exclusively managed by the trustee in accordance with the approved
Declaration of Trust.
Question 59
Legal ownership of trust property is vested in
Response: The Trustee
Correct answer: The Trustee
Question 60
Situationers:
A client wants a UITF invested in China equities however, your institution only has a global fund which
has investment in china equities. After explaining the Global Fund the client decided to invest in it. Is the
sale of the Global Fund Acceptable?
Response: Yes
Correct answer: Yes
Question 61
An activity resulting from a trustor-trustee relationship involving the appointment of a trustee by a
trustor for the administration of funds for the use, benefit and advantage of beneficiaries.
Response: Trust
Correct answer: Trust
Question 62
UITF Module III
The name and classification of the fund should be printed on the ff:
Response: Marketing Materials
Correct answer: Marketing Materials
Question 63
Feeder Fund: A UIT Fund structure that mandates the funds to invest less than 90% if its assets in a
single collective investment scheme
Response: False
Question 64
Module on Marketing and Distribution
UITF plan documents must be approved by

Response: Issuer’s BOD and BSP
Correct answer: Issuer’s BOD and BSP
Question 65
Module I
Fund management of Unit Investment Trust Fund is done by

Response: The Trustee
Correct answer: The Trustee
Question 66
What is document signed by both client and UITF marketing personnel that states the risks associated
with investing in UITFs and serves as the UITF investor’s affirmation that he/she understands and
accepts the risk disclosed in the document?
Response: Risk Disclosure Statement
Correct answer: Risk Disclosure Statement
Question 67
______ are UTIFs that invest in short-term securities that mature in one year or less.
Response: Money Market Funds
Correct answer: Money Market Funds
Question 68
When limit is breached due to marking-to-market or extraordinary circumstances, trustee is given how
many days to correct the same?
Response: 30 days
Correct answer: 30 days
Question 69
Which of the following best describes volatility in the context of investments?
Response: Rate of fluctuation of the value of investment
Correct answer: Rate of fluctuation of the value of investment
Question 70
Participants may have ownership or any interest in any particular account or investment in the UITF
Response: False
Question 71
Module on Trust
By virtue of being a revocable trust, UITFs are no longer part of the trustor’s estate. (DIFFICULT)
Response: No
Correct answer: No
Question 72
Which government entity regulates UITFs
Response: BSP
Correct answer: BSP
Question 73
Asset Classes
Situationers
Client disclosed that the UTIF investment is for her daughter’s college fund. The child 1 year old. You as
the certied marketing personal, wants to use goal based investing. You present the equities UITF for the
investment needs of the client. Your presenting the product to the client is based on the ff. reason/s:
Response: Client’s investment goals and the investment horizon of equities are both long term
Correct answer: Client’s investment goals and the investment horizon of equities are both long term
Question 74
Asset Classes
The Trustee should have exclusive control over each UITF and shall NOT have other capacity as except
Trustee
Response: True
Question 75
It is the act of assigning a value to a position held in a tradable financial instrument based on the
current market price for that instrument.
Response: Market-to-Market
Correct answer: Market-to-Market
Question 76
Client wants to have access to cash at all times, which one of these assets would have the least liquidity
risk?
Response: Time Deposit
Correct answer: Time Deposit
Question 77
Asset Classes
An Unit Paying UITF pays out units of the fund to the client. The units paid out can be redeemed for
cash.
Response: True
Question 78
What is the document that an investor needs to sign if he chooses a UITF that has a higher risk profile
than the investor’s risk profile based on the results of the Client Suitability Assessment?
Response: Client Waver
Correct answer: Client Waver
Question 79
How many days minimum for the cooling-off period of UITFs?
Response: 2 days
Correct answer: 2 days
Question 80
A client with an unmatched profile vis-à-vis his preferred investment outlet should _____.
Response: Be given the option to be re-classified by asking said client to accomplish a waiver indicating
that he may lose some of the protection afforded by the basic standards due to reclassification
Correct answer: Be given the option to be re-classified by asking said client to accomplish a waiver
indicating that he may lose some of the protection afforded by the basic standards due to
reclassification
Question 81
____ is/are subject to duration risk: (DIFFICULT)

Response: Fixed Income Securities
Correct answer: Fixed Income Securities
Question 82
return of a certain UITF is the ____ of the underlying assets. (DIFFICULT)

Response: weighted average return
Correct answer: weighted average return
Question 83
Asset Classes
The formula : NAVPU (current)-NAVPU (same period a year ago)/ NAVPU (same period a year ago)
shows the return of investment for the period:
Response: Year-on-year
Correct answer: Year-on-year
Question 84
In the performance of its duties, the Trust Entity carries varying functions in relation to credit (debt),
shareholder, and investment position taking. The Chinese Wall protects the Trust Entity from what
issue?
Response: Conflict of Interest
Correct answer: Conflict of Interest
Question 85
Situationers:
A UITF marketing personnel processed a client’s telephone request to invest his excess funds without
the required documents because this is just an additional investment and the client will sigh the
documents the following day. Was the marketing personnel correct in processing the investment?
Response: No
Correct answer: No
Question 86
Module on Trust
BSP regulation requires ___ computation of NAVpu (BASIC)

Response: daily
Correct answer: daily
Question 87
What document should a client have as evidence of his investment in a UITF?
Response: Confirmation of Participation
Correct answer: Confirmation of Participation
Question 88
Situationers:
A client went to branch inquiring about the price of his bond fund. When he learned that the value of his
investment is below his original investment, he is demanding that he be compensated for the loss citing
PDIC insurance. Is the client correct?
Response: No
Correct answer: No
Question 89
Module on Investing
The Risk-reward rule means the higher the risk, the higher the return.
Response: True
Question 90
Module on Investing
Hedging is used for the sole purpose of minimizing volatility of investment.

Response: True
Question 91
UITF Module III
A new marketing officer joined the bank two weeks ago and has already undergone the UITF product
orientation of the bank. The active certified UITF salesperson status obtained from the last employer has
not yet been transferred to the current employer. A new client walked into the branch and asked to
invest in the Peso Money Market Fund. The Branch Head is out of office on vacation leave, and the
marketing officer can and is allowed to sell UITFs since he is already sponsored by the current employer.
The preceding statement is correct.
Response: False
Question 92
The Table below shows the allowed UITFs for the corresponding client risk profile:

Bond Fund Moderate
Investor with moderate risk profile may invest in Enhanced Money Market Fund.
Response: Yes
Correct answer: Yes
Question 93
______duration of securities are more volatile if: (BASIC)

Response: Long Term
Correct answer: Long Term
Question 94
A trust organization is ________ separate and distinct from other units/business

Response: organizationally, operationally, administratively and functionally
Correct answer: organizationally, operationally, administratively and functionally
Question 95
An Expression for net asset value that represent a fund’s value per unit. It is calculated by dividing the
total net asset value of the fund by the number of units outstanding.
Response: NAVpU
Correct answer: NAVpU
Question 96
Asset Classes
A multi-class UITF may have different levels of trustee fees and expenses whereby the allocation of any
costs, charges and expenses payable out of the fund which are not attributed to any particular unit class
requires one of the ff.:
Correct answer: All of the above
Question 97
An investment strategy that combines different securities to protect from potential losses. (BASIC)
Response: Diversification
Correct answer: Diversification
Question 98
Module on Code of Conduct and Ethics
The cardinal principle for all trust or fiduciary relationships is fidelity to client’s interests.
Response: True
Question 99
Situationers:
The client’s ability to take actual risks is a function of size portfolio, financial goals and time frame to
meet investment objectives.
Response: True
Question 100
Which government entity provides insurance for UITFs?
Response: None- UITFs are not insured by the government entity
Correct answer: None- UITFs are not insured by the government entity
Question 101
Exposure limit of UITFs to single person/entity is_______.
Response: 15 percent of the UITF’s market value;
Correct answer: 15 percent of the UITF’s market value;
Question 102
It is a UITF structure that mandates the fund to invest at least 90% of its assets in a single collective
investment scheme
Response: Feeder Fund
Correct answer: Feeder Fund
Question 103
Classification of client whose goal is to prevent the loss of their investments.
Response: Conservative
Correct answer: Conservative
Question 104
Statement I: Marketing Materials may present relevant historical and future performance of the UITF.
Statement II: Indicative rates of return may be provided in the marketing materials.
Response: Both Statement are false
Correct answer: Both Statement are false
Question 105
Situationers:
A prospective UITF investor went to the branch to inquire about a money market fund. He requested to
see a copy of the plan rules. The UITF marketing personnel declined his request. Was the marketing
personnel correct declining the request?
Response: Yes
Correct answer: No
Score: 0 out of 1 No
Question 106
Module I
Will investment in UITF be Garnished/attached by creditors of the investor/participant?

Response: No
Correct answer: No
Question 107
UITF Module III
The CSA determines the minimum risk capacity of the client.

Response: False
Question 108
Among types of Unit Investment Trust Funds, this comprises more than 50% of the total investments of
the whole trust industry.
Response: Money Market Fund
Correct answer: Money Market Fund
Question 109
Which of the following best describes Market to Price Risk?
Response: The possibility for an investor to experience losses due to change in market prices of
securities (e.g. equities and bonds).
Correct answer: The possibility for an investor to experience losses due to change in market prices of
securities (e.g. equities and bonds).
Question 110
UITF Module III
Situationer:
The super valued client asked the certified UITF salesperson to allow him the option to redeem his
equity fund investment at 3:30 p.m. just after the closing of the Philippine stock exchange. You regular
redemption cut-off is 12:00 p.m. The CUSP fearing the loss of the account can do one of the following:
Response: Yes Explain that trading cut-off is 12:00 p.m. as prescribed in the Declaration of Trust thus the
request cannot be allowed
Correct answer: Yes Explain that trading cut-off is 12:00 p.m. as prescribed in the Declaration of Trust
thus the request cannot be allowed
Question 111
A UIT fund structure which has more than one (1) class of units in the fund and is invested in the same
pool of securities and the same portfolio, investment objectives and policies.
Response: Multi-class fund
Correct answer: Multi-class fund
Question 112
Which is not true with regard to fixed income funds

Response: Can invest in stocks as long as exposure is limited to 5%
Correct answer: Can invest in stocks as long as exposure is limited to 5%
Question 113
Asset Classes
A unit Investment Trust Fund is defined by the following characteristics:

Correct answer: Open-ended
Question 114
Which of the following best describes Interest Rate Risk?
Response: No The possibility for an investor to experience losses due to changes in interest rates
Correct answer: No The possibility for an investor to experience losses due to changes in interest rates
Question 115
Asset Classes
The Net Asset value of the UITF is calculated as follows:

Response: Market value each Investment less fees, taxes and qualified expenses defined in the Plan
Correct answer: Market value each Investment less fees, taxes and qualified expenses defined in the
Plan
Question 116
_________ represents an ownership/interest in a company
Response: Equity/shares of stocks
Correct answer: Equity/shares of stocks
Question 117
How to actively managed funds differ from Tracker Funds?
Response: Stocks are deliberately chosen by the Fund Manager based on the Fund Strategy
Correct answer: Stocks are deliberately chosen by the Fund Manager based on the Fund Strategy
Question 118
UITF Module III
The cooling off period allows the client to walk away from an investment the lost value within the 2 days
the client in invested in the fund. The client does not take any market risk
Response: False
Question 119
Investment in securities of a UIT Fund shall be held for safekeeping and subjected to independent
marking-to-market by the:
Response: Accredited Third Party Custodian
Correct answer: Accredited Third Party Custodian
Question 120
How to actively managed funds differ from Tracker Funds?
Response: Stocks are deliberately chosen by the Fund Manager based on the Fund Strategy
Correct answer: Stocks are deliberately chosen by the Fund Manager based on the Fund Strategy
Question 121
This is primary when full discretion is given by a client

Response: Safety of principal
Correct answer: Safety of principal
Question 122
Situationers:
A UITF marketing personnel was explaining the features of an equity fund to a client. When the client
asked the marketing personnel if the equity UITF is the same as an equity mutual fund, the personnel
replied “Yes, it is the same.” Was this a correct response?
Response: No
Correct answer: No
Question 123
Module on Investing
Issuer of government securities

Response: BTr (Bureau of Treasury)
Correct answer: BTr (Bureau of Treasury)
Question 124
The most significant risk associated with bonds are

Response: Credit risk and interest rate risk
Correct answer: Credit risk and interest rate risk
Question 125
_______ is a clear and appropriately worded statement/s to disclose different risks to clients of the
various investment undertakings of the investment manager done in behalf of the client.
Question 126
The longer the duration of the underlying assets signifies higher volatility
Response: True
Question 127
Which of the following is not an allowable investment outlet of UITF?
Response: Promissory Notes
Correct answer: Promissory Notes
Question 128
Asset Classes
The most common benchmark used for investment in stocks listed in the Philippine stock exchange is:
Response: Philippine Stock Exchange Index (PSEi)
Correct answer: Philippine Stock Exchange Index (PSEi)
Question 129
Identify the investment that a Philippine peso UITF CAN NOT invest in:
Response: Loans
Question 130
What UITF should be recommended if interest rates are going up?
Response: Depends on the client’s risk profile;
Correct answer: Depends on the client’s risk profile;
Question 131
A Unit Investment Trust Fund is a:
Response: Trust product
Correct answer: Trust product
Question 132
If a client participated after cut-off time, NAVPU that will be normally used is:
Response: Beginning-of-day NAVPU tomorrow;
Correct answer: End-of-day NAVPU tomorrow;
Question 133
A group of investment that have similar risk-return characteristics is called:

Response: Asset Classes
Correct answer: Asset Classes
Question 134
The following are the required disclosures a Marketing Personnel should explain to the client except:
Response: The high income/return of UITFS are guaranteed in the long run
Correct answer: The high income/return of UITFS are guaranteed in the long run
Question 135
Situationers:
A client asked the CUSP if they carry a fund similar to his investment in Sure Ball Equity Fund. Client
disclosed that his investment in the UITF is guaranteed as glaringly and clearly stated in the name of the
UITF. Which of the following statement/s will you, as CUSP, discuss with client?
Response: The return of investment of Sure Ball Equity UITFs is not guaranteed.
Correct answer: All of the above.
Question 136
It is a special committee which reports directly to the board of directors and is primarily responsible for
overseeing the fiduciary activities of the bank
Response: Trust Committee
Correct answer: Trust Committee
Question 137
What is the appropriate UITF for an investor?
Response: Depends on the investor’s Investment objective and risk tolerance
Correct answer: Depends on the investor’s Investment objective and risk tolerance
Question 138
The total asset and accountabilities of each fund shall be accounted for as a single account referred to
as:
Response: Pooled Fund Accounting
Correct answer: Pooled Fund Accounting
Question 139
The answer to this type of question is selected from a set of choices. A correct answer gets full points,
and an incorrect answer gets zero points.
Response: Net Asset Value
Correct answer: Net Asset Value
Question 140
A valuation method that provides investors with a more accurate and fair value of his investments at any
given time. It ensures that no participant is put at a disadvantage as consequence of a new investor
coming into, or of existing investors getting out of the fund.
Response: Mark to Market Valuation
Correct answer: Mark to Market Valuation
Question 141
If the UITF exposure limit to single person/entity is breached due to mark-to-market valuation, the
Trustee is _____________.
Response: Given 30 days to correct the breach;
Correct answer: Given 30 days to correct the breach;
Question 142
Classification of client who is willing to take certain level of risk in exchange for higher
Response: Moderate
Correct answer: Moderate
Question 143
A UITF marketing personnel can provide an annualized return of the fund if the client asks for it
Response: No
Correct answer: No
Question 144
Which of the following best describes Re-investment Risk?
Response: Yes The risk associated with the possibility of having lower returns or earnings when maturing
funds or the interest earnings of funds are re-invested.
Correct answer: Yes The risk associated with the possibility of having lower returns or earnings when
maturing funds or the interest earnings of funds are re-invested.
Question 145
_______ is a risk management technique that mixes a wide variety of investment within a portfolio
Response: Diversification;
Correct answer: Diversification;
Question 146
Module I
An Investor’s/participant’s investment in the Unit Investment Trust Fund will be: Net Asset Value per
Unit (NAVPU) x numbers if units.
Response: True
Question 147
UITFs are exempt from the following statutory limits applicable to trust funds in general
Response: Reserve requirements
Correct answer: Reserve requirements
Question 148
Module on UITF NAVPU and Marketing-to-Market
Exposure limit does not apply to non-risk assets as defined by BSP

Response: True
Question 149
As long as the UITF is invested in fixed income assets with predictable and known cash flow, trustee can
give an indicative and guaranteed returns to investors.
Response: False
Question 150
A type of UITF that is primarily invested in stock issues:
Response: Equity Fund
Correct answer: Equity Fund
Question 151
Classification of client who is willing to accept higher risk involving volatility of returns and even
possible loss of investment in return for potential higher long term results.
Response: Aggressive
Correct answer: Aggressive
Question 152
A UITF where the income of the fund is distributed in the form of units called unit income.
Response: Unit Paying Fund
Correct answer: Unit Paying Fund
Question 153
Clients are allowed not to sign in the Risk Disclosure statement when opening an account. (DIFFICULT)
Response: No, clients need to sign understand and accept the risks
Correct answer: No, clients need to sign understand and accept the risks
Question 154
An MBA student received his bonus from his company. He has earmarked the money as payment for his
tuition fee for the next semester. His risk profile is aggressive and he wants to invest in an equity fund
because he wants the money to earn more in the next six months. Would you advise him to proceed
investing in equities?
Response: No, because there is a mismatch between the recommended investment horizon for an
equity fund and his requirement for his funds.
Correct answer: No, because there is a mismatch between the recommended investment horizon for an
equity fund and his requirement for his funds.
Question 155
What are the minimum elements of a Declaration of Trust

Response: Title Investment objectives and policies. and unitized valuation methodology
Correct answer: Title Investment objectives and policies. and unitized valuation methodology
Question 156
Asset Classes
Situationers
A 28 year-old single BPO agent has P50,000 saved up from his performance bonus for the year. He has
no immediate need for his money in the near future. His risk profile came out as aggressive since he
took a short course on investing and also learned investing online. He thinks that he can set aside about
the same amount given his exceptional job performance. Which investing principle would be applicable
to this situation?
Response: Horizon matching
Correct answer: Horizon matching
Question 157
What are the factors that will determine the client’s suitability to a fund?
Response: Investment capacity, investment horizon, risk profile
Correct answer: Investment capacity, investment horizon, risk profile
Question 158
Under trust, losses not attributed to breach of trust or in bad faith are borne by the ___.
Response: Client/Trustor
Correct answer: Client/Trustor
Question 159
The best practice of Fair-Dealing pertains to:
Response: Ensuring fair and honest practices with the best interest of client and counterparties in mind.
Correct answer: Ensuring fair and honest practices with the best interest of client and counterparties in
mind.
Question 160
A Trustee is expected to exercise skill, care, prudence, and diligence in performing its duties which also
known as the ________.
Response: Prudent Man rule
Correct answer: Prudent Man rule
Question 161
Confirmation of participation and redemption made to or from the Fund shall contain the following
information except:
Response: Indicative rates of return
Correct answer: Indicative rates of return
Question 162
What is the cardinal principle for all trust and fiduciary relationships?
Response: Fidelity
Correct answer: Fidelity
Question 163
Which of the ff. fund classification is correct?

Response: None of the above
Correct answer: None of the above
Question 164
Asset Classes
Situationers
Client approached the Branch Head asking for the best time to invest his P1M in a Philippine Equity UITF.
Client has been following the Philippine stock market and is unsure if it’s the right time to invest in the
market that is all time high of 9,000. The money is being set aside for retirement which is 6.5 years
away. The appropriate investment principle is?
Response: Cost Averaging – by breaking up the fund in smaller amounts and investing the amounts
regularly in the equity UITF
Correct answer: Cost Averaging – by breaking up the fund in smaller amounts and investing the amounts
regularly in the equity UITF
Question 165
A local or foreign collective investment scheme in which the UIT Fund invest all or a portion of its assets.
Response: Target Fund
Correct answer: Target Fund
Question 166
Asset Classes
Giving a copy the Risk Disclosure Statement or RDS is optional for as long as the client signs a copy
Response: False
Question 167
Which of the following best describes foreign exchange risk?
Response: The possibility for an investor to experience losses due to fluctuation in foreign exchange
rates.
Correct answer: The possibility for an investor to experience losses due to fluctuation in foreign
exchange rates.
Question 168
Rank the following types of UITF according to potential return (from highest to lowest):
Response: Equity fund, balanced fund, bond fund, money market fund
Correct answer: Equity fund, balanced fund, bond fund, money market fund
Question 169
What is the main risk in keeping one’s money in deposit?
Response: Erosion of real value of one’s money because if inflation
Correct answer: Erosion of real value of one’s money because if inflation
Question 170
What kind of risk arises from a trust Entity’s Inability to liquidate assets quickly without incurring
unacceptable losses?
Response: Liquidity risk
Correct answer: Liquidity risk
Question 171
An investment strategy designed to reduce exposure risk by combining a variety of investment which
are unlikely to all move in the same direction. Its goal is to reduce the risk while maintaining the
potential return of an investment.
Response: Diversification
Correct answer: Diversification
Question 172
Which of the following best describes “duration”?
Response: A measure of the sensitivity of the price of a fixed income investment to a change in interest
rates
Correct answer: A measure of the sensitivity of the price of a fixed income investment to a change in
interest rates
Question 173
The Following are UITF onboarding documents

Response: KYC forms, Client Suitability Assessment Form, wavier (if applicable)
Correct answer: KYC forms, Client Suitability Assessment Form, wavier (if applicable)
Question 174
It is the act of purchasing future cash flows

Response: Investing
Correct answer: Investing
Question 175
UITF Module III
Mark-to-Market Means the asset price reflect the accurate of the ff.:
Response: Value of the Fund
Correct answer: Value of the Fund
Question 176
A document which helps a UITF Marketing Personnel explain the risk involved in investing in UTIFs
Question 177
What is the term used to describe the value of each unit of participation in a UITF?
Response: Net asset value per unit or NAVPU
Correct answer: Net asset value per unit or NAVPU
Question 178
Situationers:
An eighty-year old client went to the bank to deposit the proceeds of the sale of his real estate property.
The UITF marketing personnel immediately offered him an equity fund so he can meet his product target
and enjoy travel promo. What did the marketing personnel observed in the above situation?
Response: Welfare and interest of the client was not paramount
Correct answer: Welfare and interest of the client was not paramount
Question 179
The Trustee is guided by the following principles of the Prudent Man’s Rule prevailing at the time, in the
administration of the funds or property under its custody:
Response: all of the above
Correct answer: all of the above
Question 180
Situationers:
The UITF marketing personnel informed a client that he cannot invest in the balanced fund because his
risk profile is conservative. The client insisted that he wants to invest in the fund. The marketing
personnel explained to the client that he has to sign the wavier if he wants to proceed with the
investment but the client doesn’t want to sign. Can client procced with investment.
Response: No
Correct answer: No
Question 181
Statement I: UITFs are valued using accrual method which calculates the NAV based on the estimated
fair market value of the assets.
Statement II: UITF NAVPU may fluctuate depending on the volatility of the prices of various asset held by
the fund
Response: Both statements are true
Correct answer: Both statements are true
Question 182
Which among the following UITF features is correct? (BASIC)

Response: Uses marked-to-market valuation methodology
Correct answer: Uses marked-to-market valuation methodology
Question 183
If the client redeems prior to meeting the minimum holding period, _______ may potentially be
charged.
Response: Early redemption fee
Correct answer: Early redemption fee
Question 184
UITFs can have the following underlying investments, except;
Response: Loans
Question 185
The Trust Commits to the highest standards of Integrity and prudent expertise and serve the whose best
interest which entity?
Response: Client
Correct answer: Client
Question 186
It is computed by dividing the fund’s total Net Asset Value by the total outstanding units.
Response: Net Asset Value Per Unit
Correct answer: Net Asset Value Per Unit
Question 187
Who bears the risks associated with the investment of UITFs?
Response: UITF Investor
Correct answer: UITF Investor
Question 188
What is the document signed by both client and UITF marketing personnel helps to assess the risk
profile of a UITF Investor?
Response: Client Suitability Assessment
Correct answer: Client Suitability Assessment
Question 189
Which of the following best describes the principle that investments with higher return potential are
always accompanied by higher probability of losses?
Response: Risk-Rewards Rule
Correct answer: Risk-Rewards Rule
Question 190
This is the tool used to determine and measure a client’s risk profile
Response: Client Suitability Assessment
Correct answer: Client Suitability Assessment
Question 191
How do you earn from UITF?
Response: You earn money from UITFs through changes in the NAVPU
Correct answer: You earn money from UITFs through changes in the NAVPU
Question 192
A client is requesting for a fee reduction in his investment in an equity fund. According to him, since he
as a sizable investment in the fund he should be given preferential treatment through a reduction in fee.
Is the client right in his request?
Response: No
Correct answer: No
Question 193
What is correct among the following statements regarding unit investment trust funds:
Response: Return on Investment is not guaranteed
Correct answer: Return on Investment is not guaranteed
Question 194
This is the basis for admission and redemption of participation in a fund

Response: Plan Rules
Correct answer: Plan Rules
Question 195
Which of the following best describes Credit or Default Risk?
Response: The possibility for an investor to experience losses due to borrower’s failure to pay principal
and/or interest in a timely manner on instrument such as bonds issued by the borrower.
Correct answer: The possibility for an investor to experience losses due to borrower’s failure to pay
principal and/or interest in a timely manner on instrument such as bonds issued by the borrower.
Question 196
UITF Classification
A type of UITF with a portfolio invested in fixed income securities and with sub classifications of short
term, medium term and long term
Response: Balanced
Correct answer: Balanced
Question 197
Which of the following best describes “open-ended pooled trust fund”?
Correct answer: participation or redemption is allowed as often as stated in its plain rules
Question 198
A Client can waive the conduct of a client suitability Assessment

Response: No
Correct answer: No
Question 199
A UITF is
Response: An open-end pooled fund
Correct answer: An open-end pooled fund
Question 200
There is a need for a clear policy on Chinese wall to protect the clients.
Response: Yes
Correct answer: Yes
Question 201
What are the basic types of UITFs?

Response: Money Market fund, bond fund, balanced fund, equity fund
Correct answer: Money Market fund, bond fund, balanced fund, equity fund
Question 202
UITF Classification
A client with an aggressive risk profile, long term investment horizon (greater than 5 years) suitable to
invest in the type of UITF
Response: Equity
Correct answer: Equity
Question 203
Which asset has interest rate risk?

Response: bonds,
Correct answer: bonds,
Question 204
An open-ended trust fund operated by a trust entity, made available by participation, and established,
administered and maintained by trust entity subject to BSP approval
Response: Unit Investment Trust Fund
Correct answer: Unit Investment Trust Fund
Score: 1 out of 1

UITF Practice Test

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

UITF Practice Test

Uploaded by

Copyright:

Available Formats

Question 1

This is a type of Investment that is not allowed for UITF. (DIFFICULT)

A type of UITF that pays out income on a regular basis

What is not applicable to UITF?

Diversification is investing in one asset class only to reduce risk

UITF’s are allowed to invest in derivatives to increase NAVPU

A type of UITF with portfolio of fixed income securities and equities

UITF Client Risk Profile

If interest rate increases, the price of the bond (DIFFICULT)

Basic Money Market Funds Conservative

Balanced Fund Balanced

Equity Fund Aggressive

The following are features of UITFs except:

Cash, time deposit, government securities are the same

UITFs are exempt from the following statutory reserves

Portfolio management aims to systematically combine investment instruments to produce maximum

A balanced Fund can invest in a balanced portfolio composed of the following:

When is the right time to start investing?

Only a certified investment solicitor can sell a UITF

Losses incurred by trust funds shall be exclusively for the account of

The statement: A money market fund is absolutely credit risk free, is

UITF plan documents must be approved by

Fund management of Unit Investment Trust Fund is done by

____ is/are subject to duration risk: (DIFFICULT)

return of a certain UITF is the ____ of the underlying assets. (DIFFICULT)

BSP regulation requires ___ computation of NAVpu (BASIC)

Hedging is used for the sole purpose of minimizing volatility of investment.

UITF Client Risk Profile

______duration of securities are more volatile if: (BASIC)

A trust organization is ________ separate and distinct from other units/business

Will investment in UITF be Garnished/attached by creditors of the investor/participant?

The CSA determines the minimum risk capacity of the client.

Which is not true with regard to fixed income funds

A unit Investment Trust Fund is defined by the following characteristics:

The Net Asset value of the UITF is calculated as follows:

This is primary when full discretion is given by a client

Issuer of government securities

The most significant risk associated with bonds are

A group of investment that have similar risk-return characteristics is called:

Exposure limit does not apply to non-risk assets as defined by BSP

What are the minimum elements of a Declaration of Trust

Which of the ff. fund classification is correct?

The Following are UITF onboarding documents

It is the act of purchasing future cash flows

Which among the following UITF features is correct? (BASIC)

This is the basis for admission and redemption of participation in a fund

A Client can waive the conduct of a client suitability Assessment

What are the basic types of UITFs?

Which asset has interest rate risk?

You might also like