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Investment clubs

Introduction| Course| Q&As | Recommended reading| Quiz |

Quiz

1. Amendments to the constitution of a club cannot take place without the agreement of
a) at least 75% of the membership
b) the Chairman, secretary and treasurer of the club
c) 100% of the membership

2. What is the maximum number of members that a club can have?
a) there is no maximum
b) 20 people
c) it depends on the rules of the club

3. Historically, which investment has proved to be the best long-term hedge against inflation?
a) money held in a bank deposit account
b) money invested in Government bonds
c) money invested in a diversified portfolio of equities

4. What is the minimum amount that members of a club can put in each month?
a) it depends on the constitution of the club
b) it depends on the rules of the club
c) Ł25

5. Which is the best way for members to pay their regular subscriptions?
a) by standing order, all on the same day of the month
b) by cheque made out to the club and given to the treasurer at some point in the month
c) by standing order on any day of the month

6. If a member moves away from the neighbourhood of the other members, he or she should
a) resign and withdraw their money
b) remain a member only if he or she comes back to the meetings
c) choose whether to remain a member or not

7. Under the unit valuation system, the price of new or cancelled units is calculated by
a) dividing the total assets of the club by the number of members
b) multiplying the total assets of the club by the number of units in issue
c) dividing the total assets of the club by the number of units in issue

8. The monthly report produced showing what the club owns is called
a) the asset register
b) the capital account
c) the members' ledger

9. The process of comparing the performance of the club's portfolio to an index is known as
a) riskgrading
b) benchmarking
c) weighting

10. Which of the following statements is true?
a) dividends and capital gains made through an investment club are taxed separately from a person's other earnings
b) dividends and capital gains made through an investment club are taxed together with a person's other earnings
c) dividends and capital gains made through an investment club are taxed together with a person's other earnings, but there is extra tax relief for earnings made through the club

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