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  1. Home
  2. CISI Certification
  3. ICWIM Exam
  4. CISI.ICWIM.v2025-08-09.q74 Dumps
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Question 36

How does a negative interest rate policy aim to boost lending?

Correct Answer: D
* Understanding Negative Interest Rates:
* Negative interest rate policies (NIRP) are used by central banks to stimulate the economy by discouraging banks from hoarding excess reserves.
* Under NIRP, banks are charged interest for holding deposits with the central bank, incentivizing lending to businesses and consumers instead.
* Elimination of Other Options:
* A & B: Interest is still charged on loans, and consumers are not directly "paid" to borrow.
* C: Discounting loan interest rates is a potential consequence but not the direct mechanism of NIRP.
References:
* ICWIM Module 1: Economic Policy: Coverage of unconventional monetary policies like NIRP.
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Question 37

Unsecured negotiable bearer securities that are issued by companies with a full stock market listing are known as:

Correct Answer: B
Commercial Paper (CP) is a short-term, unsecured debt instrument issued by large, creditworthy corporations to finance short-term liabilities.
* Why is Option B Correct?
* CP is negotiable (can be sold on secondary markets).
* It is unsecured (not backed by assets).
* Maturity ranges from 1 day to 270 days.
* Why Not Other Options?
* A (Certificates of Deposit) # Issued by banks, not corporations.
* C (Bills of Exchange) # Used for trade finance, not corporate funding.
* D (Treasury Bills) # Issued by governments, not companies.
# Reference: Bank of England (Commercial Paper Market), CISI Wealth & Investment Management.
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Question 38

Which index tracking method requires a swap agreement?

Correct Answer: C
Synthetic replication involves tracking an index using derivatives such as swaps. A swap agreement allows the fund to replicate the index performance without holding the actual underlying assets, reducing transaction costs and increasing efficiency.
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Question 39

What term is used to describe a situation where clients give investment instructions to a firm without being given advice to do so?

Correct Answer: B
Execution-only refers to situations where clients make investment decisions without receiving advice from the firm. The firm's role is limited to executing the client's instructions, without providing recommendations or assessing suitability.
Key features:
* The firm does not offer advice.
* The client takes full responsibility for their investment decisions.
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Question 40

A professional trader was given some price-sensitive, unpublished information in relation to a major grain supplier. As a direct result, they buy futures contracts on grain. Have they committed the offence of insider trading?

Correct Answer: B
Performance attribution analysis evaluates the performance of a portfolio by breaking it into components attributed to specific investment decisions. These include:
* Asset Allocation: The decision on the proportion of the portfolio allocated to different asset classes (e.
g., stocks, bonds).
* Sector Choice: Selecting specific sectors (e.g., technology, healthcare) within asset classes.
* Security Selection: Choosing individual securities within the selected sectors.
Risk analysis, while critical for investment management, is not typically part of standard performance attribution frameworks.
References:
* International Certificate in Wealth & Investment Management: Portfolio performance evaluation section.
* Standard attribution models: Brinson, Hood, and Beebower model widely used in performance attribution.
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