Ceilli Sample Questions (Eng) Set 1

SET 1: CEILLI SAMPLE QUESTIONS

1. What is an "internal unitized investment-linked fund"?
A.
B.
C.
D.

Part of the external unitized investment-linked fund

Part of the stock market investment-linked fund
Part of the life insurance fund of a life insurance company
Part of the investment fund of a life insurance company

2. Which of the following are the considerations in investment?

I. Taxation Treatment
II. Performance of the investment
III. Diversification
IV. Accessibility of Fund
A.
B.
C.
D.

I , II , III
I , II , IV
II , III , IV
I , II , III , IV

3. Fixed deposit is an example of which type of investment?

A.
B.
C.
D.

Investment that produces regular income flow and capital gain

Investment that produces no regular income flow but capital gain
Investment that produces no regular income flow and no capital gain
Investment that produces regular income flow without capital gain

4. Which of the following factor will affect the investment decision?

A.
B.
C.
D.

The level or amount of task in hand

The level or amount of information available
The level or amount of funds available
The level or amount of debt in hand

5. Which of the following investment carries highest risk and uncertainties?

A.
B.
C.
D.

Investment that offers the lowest opportunities for capital growth

Investment that offers the lowest opportunities for income growth
Investment that offers the greatest opportunities for capital growth
Investment that offers the acceptable opportunities for income growth

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Ceilli Sample Questions (Eng) Set 1

6. What is diversification?
A. The process of investing in the same asset classes and across different market
environments
B. The process of investing across different asset classes and across different market
environments
C. The process of investing in the same asset classes and not across different market
environments
D. The process of investing across different asset classes and not across different market
environments
7. What do the term cash and deposits refer to?
A. A group of investment vehicles that offer a fixed periodic return
B. A group of investment vehicles that offer a non-fixed periodic return
C. All liquid instruments that carry little or no risk that the principal amount invested can be
lost
D. All non-liquid instruments that carry little or no risk that the principal amount invested can
be lost
8. Which of the following are examples of bank accounts?
I. Current Accounts
II. Savings accounts
III. Offshore Accounts
IV. Investment Accounts
A.
B.
C.
D.

I , II
I , II , III
II , III , IV
I , II , III , IV

9. What is fixed income securities?

A.
B.
C.
D.

All fixed investment vehicles

All fixed interest rate investment vehicles
A group of investment vehicles that offer a non-fixed periodic return
A group of investment vehicles that offer a fixed periodic return

10. Which of the following bond carries the lowest risk?

A.
B.
C.
D.

Loan stocks
Debenture stocks
Government bonds
Convertible stocks

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Ceilli Sample Questions (Eng) Set 1

11. What is debenture stock?

A. Secured loan to a company in which the security is either a fixed charge on company's
property or some of its assets
B. Unsecured loan to a company in which the security is either a fixed charge on
company's property or some of its assets
C. Secured loan to a company in which the security is either a fixed charge on company's
well-being or capital
D. Unsecured loan to a company in which the security is either a fixed charge on
company's well-being or capital
12. What is the difference between shares from stocks?
A.
B.
C.
D.

A shareholder is a part owner of the company

A stockholder is a part owner of the company
Shareholders are liable for the debts of their company
Stockholders can vote at company meeting

13. The costs of buying and selling shares include

I. Difference between buying price and selling price
II. Government's service tax
III. Stockbroker's commission
A.
B.
C.
D.

I , II
I , III
II , III
I , II , III

14. Which of the below statement regarding preference shares and ordinary shares is TRUE?
A.
B.
C.
D.

Ordinary shares are more secure than preference share but less profitable
Preference shares are more secure than ordinary share but less profitable
Preference shares are more secure than ordinary share and more profitable
Ordinary shares are more secure than preference share and more profitable

15. Why are unit trusts useful vehicles for small private investors?
A. They have sufficient funds and/or time, to receive the benefit of professional investment
management
B. They do not have sufficient funds and/or time, to receive the benefit of professional
investment management
C. They can access to a diversified range and spread of investment
D. They cannot access to a single range of investment

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Ceilli Sample Questions (Eng) Set 1

16. Which of the following is the advantage of unit trusts?

I. Have lower risk compared to share
II. No extra cost or charges for switching from one fund to another
III. Spread of investments opened to unit-holder
IV. Professional investment service is provided by the fund managers
A.
B.
C.
D.

I , II , III only
I , III , IV only
II , III , IV only
I , II , III , IV

17. What types of fund do Investment Trusts belong to?

A.
B.
C.
D.

Open-end funds
Closed-end funds
Semi closed-end funds
Semi open-end funds

18. Which of the following regarding investment in property is TRUE?

A.
B.
C.
D.

Can provide good capital appreciation and a steady source of dividend

Can provide good source of dividend and a steady flow of income
Can provide good capital appreciation and a steady flow of income
Can provide good capital appreciation and a guaranteed flow of income

19. Investors can buy a right, not an obligation, to purchase or sell the security at a future date.
This is called:
A.
B.
C.
D.

A call option
A put option
A special option
An option

20. Which of the following is the disadvantage of investing in commodity?

A.
B.
C.
D.

Profit can be made only during rising market

Profit can be made only during falling market
Very high risk
The investor can only get very high profits with a high outlay

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Ceilli Sample Questions (Eng) Set 1

21. The following statements refer to which form of insurance cover?

I.
II.
III.
A.
B.
C.
D.

Also known as temporary insurance

No surrender or cash values available
Only provides protection within a specified period
Annuity
Whole life insurance
Endowment insurance
Term insurance

22. Which of the following insurance is with the purpose of protecting against the risk of
outliving of the person's income by living too long?
A.
B.
C.
D.

Term insurance
Annuity
Endowment insurance
Whole life insurance

23. What type of insurance policy was the first investment-linked insurance contract in the
United Kingdom?
A.
B.
C.
D.

Group term insurance policy

Group retirement policy
Joint life annuity for the self-employed
Individual retirement annuity for the self-employed

24. In the United State, investment-linked life insurance is more commonly called:
A.
B.
C.
D.

Unit-linked
Unit-insurance
Variable life insurance
Variable-linked

25. The first traditional insurance company to launch the investment-linked life insurance
product was:
A.
B.
C.
D.

Malaysia Assurance Alliance

Berjaya Prudential Assurance Bhd
Mayban Life Assurance Bhd
Hong Leong Assurance

26. Investment-linked life insurance policies operate on similar principle as which of the
following investment vehicle?
A.
B.
C.
D.

Shares
Options
Investment trusts
Unit-trust

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Ceilli Sample Questions (Eng) Set 1

27. In terms of returns and risks, compared to traditional with-profit life policies, investmentlinked life insurance provides:
A.
B.
C.
D.

Higher returns and also higher risks

Lower returns and lower risks
Higher returns but lower risks
Lower returns but higher risks

28. How are fund management fee normally charged?

A.
B.
C.
D.

A percentage of the unit selling price

A percentage of the unit buying price
A percentage of the investment-linked units accumulated
A percentage of the investment-linked fund accumulated

29. Which of the following are the characteristics of investment-linked life insurance policies?
I. The protection costs are generally met by explicit charges
II. Can be used for investments, regular savings and protection
III. Have a larger exposure to equity investments than traditional with-profit life insurance
policies
IV. The cash value and protection benefits are determined by the investment performance
of the underlying assets
A.
B.
C.
D.

I , II , III
I , II , IV
II , III , IV
I , II , III , IV

30. Which of the following are the basic types of investment-linked insurance policies sold in
Malaysia?
I. Regular premium life insurance plan
II. Single premium life insurance plan
III. Personal retirement life insurance plan
A.
B.
C.
D.

I , II
I , III
II , III
I , II , III

31. What is a "partial surrender" under an investment-linked life insurance policy?

A.
B.
C.
D.

Cashing the units at the offer price

Cashing the units at the bid price
Partially withdraw the policy loan
Partially withdraw the accumulated premium

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Ceilli Sample Questions (Eng) Set 1

32. The investment income of these funds is ploughed back into the fund. Therefore, the unit
prices will increase over the long term. This refers to which type of fund structure?
A.
B.
C.
D.

Distribution units
Accumulation units
Initial units
Separated units

33. Which of the following are the types of investment-linked funds?

I. Speculated funds
II. Manage funds
III. Equity funds
IV. Specialised funds
A.
B.
C.
D.

I , II , III
I , II , IV
II , III , IV
I , II , III , IV

34. These funds are normally segmented based on geographical regions or particular
industries. These are:
A.
B.
C.
D.

Managed funds
Balanced funds
Specialised funds
Speculated funds

35. Which of the following funds has the lowest return?

A.
B.
C.
D.

Cash funds
Managed funds
Balanced funds
Equity funds

36. The value of an investment-linked life insurance policy will fluctuate depending on what
factor?
A.
B.
C.
D.

The volume of the share market

The value of the units the policy holds
The value of the life office
The number of fund managers

37. The policy owner may sell all of his units at any time and this is referred to as:
A.
B.
C.
D.

Surrender
Top-ups
Withdrawal
Lapse

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Ceilli Sample Questions (Eng) Set 1

38. Under the single pricing method, the number of units that can be bought is equivalent to:
A.
B.
C.
D.

The total premium paid divided by the unit price

The total premium paid multiplied by the unit price
The premium paid (deduct 5% as charges) multiplied by the unit price
The premium paid (deduct 5% as charges) divided by the unit price

39. Supposing a policy owner pays a premium of RM 5000 and the price per unit of investment
at the time of purchase is RM 1 and the bid offer spread is 5%, under the dual pricing
method, how many units can the policy owner buy?
A.
B.
C.
D.

5500 units
5000 units
4750 units
4500 units

40. Under the dual pricing method, the cash value is equivalent to:
A.
B.
C.
D.

(Number of units X bid price) + ( Mortality charge + Policy fee )

(Number of units X offer price) + (Mortality charge + Policy fee )
(Number of units X bid price) - ( Mortality charge + Policy fee )
(Number of units X offer price) - (Mortality charge + Policy fee )

41. Under an investment-linked life insurance policy, policyowners may make withdrawals
through which of the following method?
A.
B.
C.
D.

Cancellation of units
Cancellation of policy
Policy loan
Policy premium loan

42. Use dual pricing method to calculate the death benefit of the following investment-linked life
insurance policy.
Sum assured RM 6,000offer priceRM 1.22 ;
bid priceRM1.159number of units 4000
A.
B.
C.
D.

RM 10,880
RM 10,636
RM 6,000
RM 4,363

43. Investment-linked funds offer the policyowner an access to what kind of investment?
A.
B.
C.
D.

Diversified portfolio of speculation

Guaranteed return of investment
Diversified portfolio of investment
High return of investment

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Ceilli Sample Questions (Eng) Set 1

44. Which of the following are the risks of investing in investment-linked funds?
I. Charges
II. Moral risk
III. Investment risk
A.
B.
C.
D.

I , II only
I , III only
II , III only
I , II , III

45. Which of the following statements regarding premium under a traditional without profit
policy is TRUE?
A. The premium is determined and is stated in the policy
B. The premiums are account driven
C. The life company may alter the term and conditions without the agreement of the policy
owners
D. The policy owners can change their premium payments, take premium holidays
46. What is the minimum term of a term insurance to be entitled for surrender value?
A.
B.
C.
D.

25 years
20 years
15 years
10 years

47. The cash surrender value of a with-profit policy varies with what factor?
A.
B.
C.
D.

Occupation of the life assured

Age of the life assured
Business volume of the insurance company
Investment returns of the insurance company

48. Which of the following statements regarding the investment returns and risks of a fund that
invests solely in equities is TRUE?
A.
B.
C.
D.

Smaller volatility but the potential return is high

Greater volatility but the potential return is high
Greater volatility but the potential return is low
Smaller volatility but the potential return is low

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Ceilli Sample Questions (Eng) Set 1

49. The premium relief is allowable when the life insurance deferred annuity is:
I. On the individual's life
II. On the life of the spouse of the individual
III. On the joint lives of the individual and his/her spouse
A.
B.
C.
D.

I , II only
I , III only
II , III only
I , II , III

50. In Malaysia, the main purposes of regulating the insurance business include which of the
following?
I. The protection of the interest of the insurer
II. The fostering of competence
III. The promotion of fairness and equity
IV. The playing of a developmental role
A.
B.
C.
D.

I, II, III only

I, III, IV only
II, III, IV only
I, II, III, IV

51. On investments in securities, the investment - linked funds are subjected to which of the
following general restrictions?
A. Should not exceed 10% of the paid up capital of the investee company or not more than
5% of the total value of the assets of the fund whichever is lower
B. Should not exceed 5% of the paid up capital of the investee company or not more than
10% of the total value of the assets of the fund whichever is lower
C. Should not exceed 5% of the paid up capital of the investee company or not more than
5% of the total value of the assets of the fund whichever is lower
D. Should not exceed 10% of the paid up capital of the investee company or not more than
10% of the total value of the assets of the fund whichever is lower
52. The policy owner of an investment-linked life insurance policy must be at least:
A.
B.
C.
D.

21 years old.
18 years old.
16 years old.
10 years old

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Ceilli Sample Questions (Eng) Set 1

53. This stage of process allows the agent to build up a clear understanding of the customer's
circumstances. This step is
A.
B.
C.
D.

Assessing and satisfying customer's needs

Making recommendations to the customer
After Sales Service
Conducting the fact-find

54. The making of recommendations to the customer includes which of the following?
I. Explaining the recommendations
II. Providing customers with an awareness of all options and alternatives open to them
III. Arranging for reviews at regular intervals
A.
B.
C.
D.

I , II only
I , III only
II , III only
I , II , III

55. Which of the following is not the function of a market-oriented insurance company?
A.
B.
C.
D.

Promotion
Pricing
Selling to the customer
Selection of distribution channel

56. What is the main objective of a market-oriented agent?

A.
B.
C.
D.

Satisfying customers' requirements and needs

Setting the sales goal
Delivering policies to customers
Achieving the company's goal

57. The consumer buying decision process includes which of the following stages?
I. Sales interview
II. Information search
III. Post-purchase evaluation
IV. Problem recognition
A.
B.
C.
D.

I, IIIII only
I, II, IV only
II, III, IV only
I, II, III, IV

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Ceilli Sample Questions (Eng) Set 1

58. An insurance agent's potential customers are called:

A.
B.
C.
D.

Customers
Buyers
Policyholders
Prospects

59. The delivery of a policy provides the agents with which of the following opportunity?
I. Provides a basis for future sales
II. Strengthens the customer relationship
III. Re-emphasizes the insurance agent's commitment
IV. Obtain referred leads
A.
B.
C.
D.

I, IIIII only
II, III, IV only
I, III, IV only
I, II, III, IV

60. The LIAM's guidelines are provided under which of the following headings?
I. Life Insurance Selling
II. Guidelines on the Code of Conduct
III. Statement of Life Insurance Practice
IV. Guidelines on the Commission
A.
B.
C.
D.

I, IIIII only
I, II, IV only
II, III, IV only
I, II, III, IV

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Ceilli Sample Questions (Eng) Set 1

Answer
1

31

32

33

34

35

36

37

38

39

10

40

11

41

12

42

13

43

14

44

15

45

16

46

17

47

18

48

19

49

20

50

21

51

22

52

23

53

24

54

25

55

26

56

27

57

28

58

29

59

30

60

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