Module 10 Asset and Funds Management

Transcription

1 LICENSING EXAMINATION STUDY OUTLINE For July to December 2012 Examinations (Issued in May 2012) Module 10 Asset and Funds Management Copyright Securities Industry Development Corporation (This document consists of 9 pages including the cover page)

2 STUDY OUTLINE MODULE 10: ASSET AND FUNDS MANAGEMENT This examination is designed to test candidate s knowledge and understanding of the financial issues relevant to the fund management industry. It is one of the examinations to be passed by individuals who: (1) intend to apply for a Capital Market Services Representative's License (CMSRL) to carry on the regulated activity of fund management; or (2) intend to hold the position of compliance officer in a firm which is a holder of a Capital Markets Services License (CMSL) for carrying on the business of fund management; or (3) intend to be employees of registered persons who carry out the capital markets activities as stipulated in Item 4, Part 1 of Schedule 4 of the Capital Markets and Services Act Candidates are advised to refer to the Licensing Handbook for detailed combination of examinations required for each regulated activity. This examination falls under Level 2 of the SC licensing examinations where candidates are expected to possess good knowledge and understanding of the subject matter provided in this study outline and specified reference. In addition, candidates are expected to have relatively strong capability in the application and analysis of information in this study outline and its reference. It is estimated that this module will require a minimum of 120 hours of study time. Candidates may need less or more depending on the education background and work experience. Candidates are expected to update themselves with the latest changes relevant to this examination as all questions will be continuously updated to reflect these changes. Module 10 examination is a closed-book test and candidates are not allowed to use any reference material during the examination. 2

3 Candidates are required to comply with the terms and conditions of the SC licensing examination. Severe penalties will be taken against candidates for any misconduct during the examination. At the end of this study outline are 5 sample questions of various formats used in the Module 10 examination. The samples provided do not in any way reflect the level of difficulty or the subject matter distribution of the actual examination. They are merely intended to familiarise candidates with the styles of multiple-choice questions used in the examination. EXAMINATION STRUCTURE Details of this examination are as follows: Type of Questions Number of Questions Multiple-Choice 30 questions Passing Mark 60% Time Allocated 60 minutes Level of Examination Level 2 Reference /Text Examination study guide for Module 10: Asset and Funds Management(Third Print, 2009 Reprint) REFERENCE MATERIAL The reference material for this examination can be obtained from: SIDC Shop, Ground Floor 3, Persiaran Bukit Kiara Bukit Kiara Kuala Lumpur Tel: (603) /8667 For more information, please visit the SIDC website at 3

4 LEARNING OBJECTIVES Candidates are expected to have good knowledge, understanding and ability to apply in the following areas: Range of investment concepts which are critical to any fund manager Financial planning approach that necessary to meet client objectives Portfolio management process used by institutional investors Major asset classes and their characteristics Asset allocation decision Basic portfolio theory principles Concept of risk management and the trade-off between risk and return Strategies available to manage equities portfolios, debt portfolios, property portfolios, portfolios of international assets and portfolios of non-traditional assets Principles of performance measurement and the selection and evaluation of fund managers EXAMINATION SYLLABUS The syllabus for this examination is divided into 5 sections and the maximum composition of questions from each section is as follows: Section Composition of Questions (Maximum) Number of Questions (Maximum) Section 1 40% 12 Section 2 20% 6 Section 3 20% 6 Section 4 40% 12 Section 5 30% 9 4

5 Details of the syllabus are as below: SECTION 1 Topic 1: Investment Concepts 1. Why do People Invest? 2. Measurement of Investment Returns 3. Minimising Risk Topic 2: Financial Planning Concepts 1. Financial Planning Concepts 2. Case Studies 3. Investment Structures 4. Flexibility of Investments Topic 3: Portfolio Management Process for Institutional Investors 1. Investment Objectives 2. Defining the Objectives for Component Parts of the Portfolio 3. Selecting and Briefing a Fund Manager 4. Investment Management Process 5. Monitoring and Reviewing the Fund Manager Topic 4: Asset Allocation 1. Major Asset Classes and their Characteristics 2. Asset Allocation and the Asset Allocator 3. Types of Investment Funds 4. Evolution of Asset Allocation Theory, Practice and Performance 5

6 SECTION 2 Topic 5: Portfolio Theory 1. Modern Portfolio Theory 2. The Capital Asset Pricing Model (CAPM) 3. The Efficient Markets Hypothesis 4. Arbitrage Pricing Theory (APT) SECTION 3 Topic 6: Risk Management 1. What is Risk? 2. Risk and Investment Objectives 3. Risk and Return 4. Risk Measurement Issues SECTION 4 Topic 7: Managing an Equities Portfolio 1. Portfolio Theory and Risk/Reward 2. Strategies for Equity Portfolios 3. Passive or Index Investment Management 4. Active Investment Management 5. Derivatives 6. Application of Approach 7. Risks Associated with an Equities Portfolio Topic 8: Managing a Debt Portfolio 1. The Malaysian Debt Market 2. Reasons for Holding Debt Securities 3. Influencing Factors 4. Risks Associated with Debt Securities 5. Performance Objectives 6. Management of Debt Portfolios 7. Performance Evaluation 8. International Debt 6

7 Topic 9: Managing a Property Portfolio 1. The Role of Property in a Diversified Portfolio 2. The Property Investment Decision 3. Macroeconomics Influences on Property Returns 4. Microeconomics Influences on Property Returns 5. Different Property Investors Topic 10: Managing a Portfolio of International Assets 1. International Investing 2. Global Diversification 3. Types of International Investments 4. Portfolio Management Styles 5. Portfolio Construction 6. Portfolio Management Strategy 7. Currency Management of An International Asset Portfolio Topic 11: Managing a Portfolio of Non-Traditional Assets 1. What is an Alternative Asset Class? 2. Why Invest in Alternative Assets? 3. Infrastructure 4. Venture and Development Capital SECTION 5 Topic 12: Monitoring Fund Performance 1. Performance Measurement 2. Assessing Future Performance 3. Selection and Evaluation of Fund Managers 7

8 SAMPLE QUESTIONS AND ANSWERS Sample Question 1 The concept of beta is most closely associated with: (A) (B) (C) (D) variance analysis correlation coefficients the Capital Asset Pricing Model unsystematic risk Sample Question 2 The variability in returns due to fluctuation in the overall market is called: (A) total risk (B) liquidity risk (C) systematic risk (D) unsystematic risk Sample Question 3 Which of the following MOST relevant to random walk theory? A random walk theory occurs when: (A) (B) (C) (D) stock price changes are random but predictable stock prices respond slowly to both new and old information future price changes are uncorrelated with past price changes past information is useful in predicting future prices 8

9 Sample Question 4 Which of the following macroeconomic factors may affect the returns to property investors? (i) (ii) (iii) (iv) State of economy Changes in government policy Changes in consumption habits Improvements in infrastructure (A) (i) and (ii) only (B) (i), (iii) and (iv) only (C) (ii), (iii) and (iv) only (D) All of the above Sample Question 5 The semi-strong form of the Efficient Market Hypothesis requires that: (A) (B) (C) (D) current stock prices reflect all security market information stock prices reflect all information from public and private sources stock prices reflect all public information, as well as security market information stock prices reflect all price and volume histories and other phenomena observable from the activities of the market on which the security trades Answers Sample Question 1 C Sample Question 2 C Sample Question 3 C Sample Question 4 D Sample Question 5 C 9