Welcome to your Jargon Buster Quiz. This is a formative learning exercise to ensure you have the foundations to complete JT+ Good luck and do your best! Feel free to use your Jargon Buster Handbook to help you answer the questions. Name Email 1. An investment trust may trade at a discount when: Interest rates fall Market price is below NAV Market price equals NAV Dividends increase None 2. The term ex dividend means: Buyer will not receive next dividend Dividend is guaranteed Buyer will receive next dividend Dividend has been increased None 3. A tracker fund aims to: Mirror an index Invest only in bonds Avoid equities Outperform the market None 4. The primary market is concerned with: Trading existing shares Collecting taxes Clearing derivatives Issuing new securities None 5. A nominal share value refers to: Current market price Face value stated in company constitution Dividend amount Total assets None 6. Artificial Intelligence (AI) is increasingly used in financial services to: Print physical banknotes Analyse large amounts of data and identify patterns Guarantee investment returns Replace all human investment managers None 7. Algorithmic trading refers to: Using computer programs to execute trades automatically Manual trading on a stock exchange floor Long-term investing only Trading government bonds only None 8. Credit risk refers to: Market volatility Interest rate changes Borrower failing to repay Liquidity shortage None 9. Risk in financial markets refers to: Market closure Guaranteed loss Dividend reduction only The possibility of financial loss or variability of returns None 10. A company issues free shares to existing shareholders and the share price adjusts proportionately. What is this called? Share Buyback Capital Reduction Bonus Issue Rights Issue None 11. A stablecoin aims to: Maintain a relatively stable value Eliminate inflation Track stock market performance Deliver high investment returns None 12. A gross redemption yield takes into account: Only coupon payments Only capital gains Interest payments and capital gain or loss Dividend growth only None 13. Yield is best described as: Income expressed as a percentage of price Total capital growth Dividend only Interest only None 14. An ISA provides: Tax efficient wrapper for investments Government pension Corporate bond insurance Guaranteed return None 15. A dematerialised security is: Electronic holding Paper certificate Convertible share Government bond None 16. Venture Debt differs from Venture Capital because it is primarily: Government support Equity funding A form of borrowing A type of dividend None 17. NAV is particularly important for pricing: Corporate bonds Investment trusts only OEICs and unit trusts Derivatives None 18. A secured loan differs from an unsecured loan because it: Has no interest Is always short term Cannot default Requires collateral None 19. A forward exchange rate is: An exchange rate agreed today for future delivery Inflation adjusted rate Today’s spot rate Central bank rate None 20. A Sovereign Wealth Fund is owned by: A stock exchange A commercial bank A pension provider A government None 21. Market liquidity describes: Interest rate changes Government borrowing Dividend growth Ease of trading without price impact None 22. Quantitative Easing (QE) involves a central bank: Selling shares to investors Raising taxes Creating money to purchase financial assets Setting dividend policy None 23. Protectionism refers to: Reducing interest rates Increasing dividends Restricting international trade Encouraging free trade None 24. Liquidity risk refers to: Difficulty selling at a fair price Borrower default Falling dividends Inflation None 25. A certificate of deposit represents: Government bond Equity ownership Bank deposit instrument Insurance policy None 26. The Financial Conduct Authority primarily regulates: Monetary policy Market conduct and consumer protection Taxation Prudential capital requirements None 27. Which body sets UK base interest rates? Bank of England via MPC HM Treasury Financial Conduct Authority Prudential Regulation Authority None 28. An instrument issued at a discount and redeemed at par without paying coupons is: Zero Coupon Bond Convertible Bond Preference Share Floating Rate Note None 29. The Competition and Markets Authority (CMA) is responsible for: Enforcing UK competition law and reviewing mergers Issuing government bonds Setting interest rates Regulating derivatives None 30. The Consumer Prices Index measures: Inflation Exchange rates Corporate profits Share price growth None 31. SONIA stands for: Securities Overnight Interest Allocation Sterling Overnight Index Average Sterling Official Investment Average Standard Overnight Interbank Agreement None 32. Fiscal policy refers to: Taxation and government spending Interest rate decisions IPO pricing Bond yields None 33. A bond that can be converted into company shares is: Preference Share Floating Rate Note Convertible Bond Irredeemable Gilt None 34. A hedge fund is most likely to: Guarantee capital Use aggressive strategies Avoid derivatives Track an index passively None 35. Net Asset Value (NAV) of a fund is calculated as: Share price multiplied by shares in issue Assets plus liabilities Assets minus liabilities Dividend divided by share price None 36. One potential risk associated with algorithmic trading is: Human error only Lower liquidity Guaranteed losses Rapid market volatility None 37. An open ended investment fund that expands and contracts with investor demand is Closed Ended Fund OEIC Preference Share Investment Trust None 38. Inflation reduces the real value of: Equity volatility Cash holdings Interest rates Market capitalisation None 39. An Initial Public Offering is: A rights issue A new issue of shares A bond redemption A secondary market trade None 40. Tokenisation refers to: Printing physical share certificates Converting ownership rights into digital tokens Issuing government currency Replacing company directors with software None 1 out of 1 Thanks for completing the quiz. You will receive your result soon.
