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IMC Unit 1 Practice Exam: Conduct & Ethics

IMC Test 02: Key Study Themes

This exam reviews FCA Conduct Rules, Corporate Governance, and Anti-Money Laundering (AML).

Regulatory Safety: Remember that "Integration" is the final stage of money laundering, where illicit funds are re-introduced into the economy as legitimate assets.
Governance: Corporate governance centers on the separation of ownership and control, managed through the appointment of agents.
Tax & Compliance: Employers pay Class 1A National Insurance Contributions on taxable benefits in kind, such as private use of a company car.
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Q:1Which one of the following is considered a packaged product?
Q:2Which of the following statements best describes a dark pool?
Q:3Which of the following is NOT a core standard within the CFA Code of Ethics and Standards of Professional Conduct?
Q:4Ownership and control of capital is separated by the process of:
Q:5Under which Act of Parliament is it a criminal offence for an employee of a regulated investment firm to fail to report suspected money laundering?
Q:6An FCA authorised firm holds money for a retail client. Which of the following conditions must apply to this client money account?
(i) It is separate from the firm's own funds
(ii) The firm must exercise reasonable care in selecting the bank
(iii) Other clients' money must be held in an individual account for each person.
Q:7According to most academic studies, which is the most important factor in determining the returns of an investment portfolio?
Q:8A sponsoring employer of a defined benefit pension scheme becomes insolvent. What level of compensation does the Pension Protection Fund (PPF) provide to those who have NOT yet retired?
Q:9A business is generally required to keep records to justify a tax return for what length of time?
Q:10An adviser wishes to write materials for clients. Which action is permissible under the CFA Code of Ethics and Standards of Professional Conduct?
Q:11The financial state where a company is unable to pay its debts as they fall due is best described as:
Q:12Which of the following will require Part 4A authorisation to carry out a regulated activity in the UK?
Q:13Which action by senior management is least likely to promote ethical employee behaviour?
Q:14Which of the following is NOT a standard legal method to end a contract?
Q:15A deposit-taking bank in the UK is regulated by:
Q:16What is required if a joint tenant wishes to dispose of their interest during their lifetime?
Q:17Under FCA disclosure rules, a person discharging managerial responsibility (PDMR) must notify the listed company of a transaction within:
Q:18An employer provides a company car for both business and personal use. What class of National Insurance is paid by the employer?
Q:19Who may demand a poll at a general meeting for a UK listed company?
Q:20The final stage of money laundering, where funds appear to originate from a legitimate source, is:

Test 02 Study Summary

1. Asset Allocation Academic consensus identifies asset allocation as the single most significant factor in long-term portfolio performance.
2. Client Money FCA rules mandate that client money be held in a bank account separate from the firm's own funds to protect against insolvency.
3. Pension Protection The Pension Protection Fund offers 90% compensation for non-retired members of an insolvent defined benefit scheme, subject to specific caps.

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