Question

1. Which is not a reason for the low penetration of discretionary product in Asia Private Banks?

1. Mainly Entrepreneurs /Major business owner
2. RM turnover and compensation
3. Less developed capital markets
4. Mainly inherited wealth
5. Short-term view

1. Which of the following asset class pairs has the lowest correlation:

1. US treasury and Investment Grade Bond
2. HK stocks and China Stocks
3. Emerging Market Equity and Gold
4. REITs and Property Stocks
5. Mid Cap stock and High Yield Bond

2. Which is not a characteristic of Hedge Funds?

1. Higher Management Fee plus Performance Fee
2. Typically measure against benchmark
3. Less regulated and disseminates information only to investors.
4. Only accredited investor can invest, not marketed to the general publics
5. Can sell short, use derivatives, use leverage and have concentrated investments.

Answer 1

1) A . Mainly Entrepreneurs /Major business owner is not a reason for the low penetration of discretionary product in Asia Private Banks. Discretionary products are becoming popular amoung major business owners in asian markets. The numbers are increasing and have a good growth rate in asia.

2) C. Emerging Market Equity and Gold has the lowest correlation : All otherr asset pairs are correlated to eac other UK treasaury bonds and ivestment grade bonds both have similar returns and behave same in economic downturns. HK stocks and China stocks are highly correlated because of location. REITS and property stocks are highly correlated as the REITS are based on thr property values itself. Mid cap stcok and high yiled bonds are quite correlated as they behave similarly in economic situations.

3) B Typically measure against benchmark: All other options are showing characteristics of hedge funds. Hedge funds are not usually  benchmarked for their performances.