data = [ { "question" : "1. The manager of an ETF attempts to outperform a sharemarket index.", "feedback" : "An ETF is designed to replicate the performance of a sharemarket index.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "TRUE" }, { "optionId" : 2, "optionText" : "FALSE" }] }, { "question" : "2. The number of units in an ETF...", "feedback" : "ETFs are open-ended. The number of units in the fund is not fixed. The ETF issuer can create or redeem units in response to demand from investors. ", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "is fixed" }, { "optionId" : 2, "optionText" : "can be increased or decreased in line with investor demand" }] }, { "question" : "3. Should the price of an ETF be very close to its net asset value (NAV)?", "feedback" : "The ETF's price should track the NAV very closely.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "Yes" }, { "optionId" : 2, "optionText" : "No" }] }, { "question" : "4. How do you buy ETFs?", "feedback" : "ETFs are traded on market. You cannot buy ETFs directly from the issuer.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "On market through a stockbroker" }, { "optionId" : 2, "optionText" : "Direct from the issuer" }, { "optionId" : 3, "optionText" : "Either (a) or (b)" }] },{ "question" : "5. What happens when units in an ETF are created?", "feedback" : "The authorised participant applies to the issuer for units in the ETF. In exchange, the authorised participant delivers a basket of securities equal to the value of the ETFs.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "Authorised participant delivers underlying securities to issuer, issuer transfers new units to authorised participant" }, { "optionId" : 2, "optionText" : "Issuer delivers underlying securities to authorised participant, authorised participant transfers new units to issuer" }] },{ "question" : "6. What happens when units in an ETF are redeemed?", "feedback" : "The authorised participant transfers ETFs to the issuer, which in return delivers a basket of the underlying securities to the authorised participant. The issuer then cancels the ETFs.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "Authorised participant delivers underlying securities to issuer, issuer transfers units to authorised participant" }, { "optionId" : 2, "optionText" : "Issuer delivers underlying securities to authorised participant, authorised participant transfers units to issuer" }] }, { "question" : "7. The ETF issuer holds the securities underlying the ETF.", "feedback" : "When ETFs are created, the underlying securities are transferred to a custodian, who is responsible for holding them.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "TRUE" }, { "optionId" : 2, "optionText" : "FALSE" }] },{ "question" : "8. What is the market price of an ETF?", "feedback" : "The market price is the price the ETF trades at on ASX.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "The price the ETF trades at on market" }, { "optionId" : 2, "optionText" : "The value of the securities underlying the ETF" }] }, { "question" : "9. What is the net asset value (NAV) of an ETF?", "feedback" : "The NAV is the value of the securities underlying the ETF.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "The price the ETF trades at on market" }, { "optionId" : 2, "optionText" : "The value of the securities underlying the ETF" }] }, { "question" : "10. If an ETF's market price is more than its NAV, what can an authorised participant do to take advantage of the discrepancy?", "feedback" : "If the price of an ETF is significantly higher than the NAV, an authorised participant can buy the underlying securities on market, deliver them to the issuer in exchange for new ETFs, then sell the ETFs on market.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "Buy ETFs" }, { "optionId" : 2, "optionText" : "Sell ETFs" }] },{ "question" : "11. Which element of a 'core plus satellite' strategy forms the majority of the portfolio and is designed to produce market returns, with low costs and fees?", "feedback" : "The core is designed to produce returns in line with the market, at low cost.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "Core" }, { "optionId" : 2, "optionText" : "Satellite" }] }, { "question" : "12. An investor invests: - 70% of his funds in an ETF that tracks the S&P/ASX 200 index; - 15% in individual stocks, and - 15% in an ETF that tracks the S&P/ASX 200 Resources index. In this strategy, what is the ETF that tracks the S&P/ASX 200 index?", "feedback" : "The ETF that tracks the S&P/ASX200 index produces returns in line with the broad market (core), while the individual stocks and the Resource sector ETF have been chosen to boost returns (satellites).", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "Core" }, { "optionId" : 2, "optionText" : "Satellite" }] }, { "question" : "13. An ETF gives you instant diversification, no matter how small your investment.", "feedback" : "A broad based sharemarket ETF provides exposure to all the stocks in the underlying index, giving you instant diversification, no matter how small your investment.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "TRUE" }, { "optionId" : 2, "optionText" : "FALSE" }] }, { "question" : "14. What level of portfolio turnover is typical for an ETF?", "feedback" : "There is typically very low turnover in the underlying portfolio of an ETF. The fund manager usually only buys or sells securities to rebalance the portfolio.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "Low" }, { "optionId" : 2, "optionText" : "High" }] } , { "question" : "15. A synthetic ETF invests only in the securities that are in the benchmark index.", "feedback" : "A synthetic ETF typically invests in a portfolio of securities. It also enters into a derivatives contract, usually a 'swap' agreement, with a counterparty.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "TRUE" }, { "optionId" : 2, "optionText" : "FALSE" }] } , { "question" : "16. Under the swap agreement, what will happen if the ETF's portfolio outperforms the benchmark index?", "feedback" : "Under the swap agreement, the ETF must make a payment to the counterparty if the portfolio outperforms the index.", "correctAnswer" : "1", "answers": [{ "optionId" : 1, "optionText" : "The ETF must make a payment to the swap counterparty" }, { "optionId" : 2, "optionText" : "The swap counterparty must make a payment to the ETF" }] }, { "question" : "17. What is the main risk of synthetic ETFs that is not a risk of investing in conventional ETFs?", "feedback" : "As well as the risks common to all ETFs, synthetic ETFs involve the additional risk that the counterparty to the derivative will not meet its obligations to the fund.", "correctAnswer" : "2", "answers": [{ "optionId" : 1, "optionText" : "Liquidity risk" }, { "optionId" : 2, "optionText" : "Counterparty risk" }, { "optionId" : 3, "optionText" : "Market risk" }] } ];