QFA Investment (LIA/IOB, Ireland)

What stamp duty rate is applied to the purchase of shares in an Irish-incorporated company?

• A0.5%
• B1.0%
• C2.0%
• D7.5%

Which of the following is the standard rate of Deposit Interest Retention Tax (DIRT) in Ireland?

• A20%
• B25%
• C33%
• D41%

An investor purchases an Irish government bond (Gilt) with a nominal value of €10,000 and a coupon rate of 4% per annum. If market interest rates rise, what is the most likely effect on the market price of this bond?

• AThe market price of the bond will rise.
• BThe market price of the bond will fall.
• CThe market price of the bond will remain unchanged.
• DThe coupon rate of the bond will adjust upwards.

What is the current stamp duty rate on the transfer of non-residential (commercial) property in Ireland?

• A1.0%
• B2.0%
• C4.0%
• D7.5%

Under EU regulations, what does the acronym 'UCITS' stand for?

• AUndertakings for Collective Investment in Transferable Securities
• BUnited Collective Investment Trust Scheme
• CUniversal Code for Investment Trust Securities
• DUnion of Collective Investment and Trading Schemes

Which of the following describes the key structural advantage of an Irish Collective Asset-management Vehicle (ICAV) compared to a public limited company (plc) fund structure?

• AAn ICAV is completely exempt from the 8-year deemed disposal exit tax.
• BAn ICAV can elect to be treated as a partnership (pass-through) for US tax purposes ('che…
• CAn ICAV does not require a depositary or custodian.
• DAn ICAV can only invest in physical real estate.

How are dividend payments on Irish ordinary shares taxed for an individual who is an Irish resident taxpayer at the higher rate of income tax (40%)?

• AThey are subject to 25% Dividend Withholding Tax (DWT) at source, with no further tax lia…
• BThey are subject to 33% DIRT at source, and no further tax applies.
• CThey are subject to 25% DWT at source, which is creditable against their income tax liabi…
• DThey are exempt from income tax but subject to Capital Gains Tax.

Which of the following yields represents the total return anticipated on a bond if it is held until it matures, taking into account coupon payments, the purchase price, and the redemption value?

• ACurrent Yield
• BNominal Yield
• CYield to Maturity (YTM)
• DEarnings Yield

Which of the following is a primary characteristic of a Unit Trust structure in Ireland?

• AIt is a corporate entity with a board of directors.
• BIt is established under trust law by a trust deed between a management company and a trus…
• CIt can only be marketed to institutional investors.
• DThe investors have direct legal ownership of the fund's underlying assets.

An investor is purchasing a residential property in Dublin for €450,000. What is the stamp duty liability on this transaction?

• A€4,500
• B€9,000
• C€33,750
• D€45,000

In a dual-priced collective investment fund, what does the 'Bid-Offer spread' represent?

• AThe annual management fee charged by the fund manager.
• BThe difference between the buying price (offer) and the selling price (bid) of the units.
• CThe transaction costs incurred when the manager buys and sells shares in the stock market.
• DThe difference in performance between active and passive funds.

What is the main risk associated with holding a significant portion of a long-term investment portfolio in cash deposits?

• ADefault risk of the Irish Government
• BLiquidity risk
• CInflation risk
• DCurrency risk

Which of the following liquidity requirements must be met by a UCITS fund to comply with European regulations?

• AIt must allow investors to redeem their units at least twice a month.
• BIt must have a lock-up period of at least one year.
• CIt must invest only in cash and government deposits.
• DIt must allow daily redemptions only.

What is the key difference between ordinary shares and preference shares?

• AOrdinary shares have no voting rights, whereas preference shares have full voting rights.
• BPreference shares have a prior claim on dividends and assets in a liquidation, but genera…
• COrdinary shares pay a fixed dividend, whereas preference shares pay a variable dividend.
• DPreference shares are exempt from Capital Gains Tax.

How do Exchange Traded Funds (ETFs) differ from traditional open-ended unit trusts in terms of trading?

• AETFs can only be traded once a day at the close of the market, whereas unit trusts trade…
• BETFs are traded on a stock exchange throughout the trading day at market-determined price…
• CETFs do not have any trading spreads.
• DETFs are priced based on the bid price only.

An investor holds an Irish corporate bond with a coupon rate of 5%. If the credit rating of the corporate issuer is downgraded by an agency like Standard & Poor's, what is the most likely impact on the bond's yield and price?

• AThe price will rise and the yield will rise.
• BThe price will fall and the yield will fall.
• CThe price will fall and the yield will rise.
• DThe price will rise and the yield will fall.

Which of the following investment restrictions is known as the standard '5/10/40 rule' for UCITS funds?

• AA fund can invest up to 5% of its assets in a single issuer, which can be increased to 10…
• BA fund must hold 5% cash, 10% government bonds, and 40% equities.
• CA fund can only invest in 5 different countries, 10 different industries, and 40 differen…
• DA fund manager must have 5 years' experience, manage 10 clients, and hold 40% of their ow…

What is the primary characteristic of preference shares that are described as 'cumulative'?

• ADividends increase automatically in line with inflation each year.
• BIf a dividend is missed in any year, it accumulates and must be paid in full before any o…
• CThe shares can be converted into ordinary shares at a set date.
• DDividends are added to the capital value of the share and paid out only on redemption.

Under the Alternative Investment Fund Managers Directive (AIFMD), what is a key distinguishing feature of an Alternative Investment Fund (AIF) compared to a UCITS fund in Ireland?

• AAIFs can only invest in cash deposits.
• BAIFs are completely exempt from central bank regulation.
• CAIFs have wider investment powers, allowing higher leverage and investment in illiquid as…
• DAIFs must be distributed only to retail investors.

Under the Irish Deposit Guarantee Scheme (DGS), what is the maximum amount of compensation payable per depositor per credit institution in the event of bank failure?

• A€20,000
• B€50,000
• C€100,000
• D€250,000

Which of the following is a potential risk specific to investing in a property fund (such as a commercial property unit trust) compared to an equity fund?

• AThe fund cannot be diversified.
• BLiquidity risk, as property transactions take time and the fund may suspend redemptions d…
• CProperty funds are exempt from stamp duty.
• DProperty funds cannot use leverage.

What does the term 'limited liability' mean for a shareholder in a plc listed on Euronext Dublin?

• AThe shareholder is not liable for income tax on dividends.
• BThe shareholder's financial liability is limited to the amount they invested in the share…
• CThe company's board of directors is personally liable for all corporate debts.
• DThe shareholder is guaranteed to get their capital back if the company goes bankrupt.

Which of the following describes a key structural difference between an open-ended investment company (OEIC) and a closed-ended investment trust?

• AAn OEIC issues a fixed number of shares, whereas a closed-ended trust creates and cancels…
• BAn OEIC creates and cancels shares/units depending on investor demand, whereas a closed-e…
• CClosed-ended trusts are always riskier than OEICs.
• DOEICs are exempt from annual management charges.

How is the 'coupon' of a bond defined?

• AThe profit made by selling the bond in the secondary market.
• BThe annual interest rate paid by the issuer to the bondholder, expressed as a percentage…
• CThe discount price at which the bond is purchased.
• DThe fee charged by the broker to purchase the bond.

What is the primary objective of active fund management?

• ATo replicate the performance of a specific market index.
• BTo outperform a benchmark index or peer group through active asset allocation and securit…
• CTo minimize the transaction costs of the fund to zero.
• DTo invest only in government-backed securities.

What does 'standard deviation' measure in the context of investment performance?

• AThe average annual dividend paid by the fund.
• BThe historical volatility or dispersion of a fund's returns around its mean/average retur…
• CThe sensitivity of the fund's returns relative to a market index.
• DThe absolute loss suffered by the fund in a market crash.

An equity fund has a Beta of 1.2. If the benchmark index falls by 10%, what is the expected return change for this fund, assuming all other factors remain constant?

• AIt will fall by 1.2%
• BIt will fall by 10%
• CIt will fall by 12%
• DIt will rise by 12%

How does diversification help reduce risk in an investment portfolio?

• ABy eliminating systematic (market-wide) risk.
• BBy spreading investments across different assets and sectors, reducing exposure to the un…
• CBy guaranteeing that the portfolio's value will never fall.
• DBy increasing the portfolio's maximum potential returns.

What is the current rate of Capital Gains Tax (CGT) in Ireland on the disposal of ordinary shares?

• A20%
• B25%
• C33%
• D41%

Under Irish tax rules, what is the annual capital gains tax exemption limit for an individual?

• A€1,000
• B€1,270
• C€3,000
• D€5,000

In Ireland, under the gross roll-up regime, how are unit-linked investment funds taxed during the lifecycle of the investment?

• AIncome and gains are taxed at 33% annually within the fund.
• BIncome and gains grow tax-free within the fund, with tax applied only on an exit event or…
• CThe investor pays income tax on the fund's gains every year.
• DThe fund is entirely exempt from all taxes at all times.

What rate of exit tax currently applies to gains made by an individual on the redemption of units in an Irish-regulated collective investment fund?

• A20%
• B33%
• C40%
• D38%

Under Irish tax legislation, what does the '8-year deemed disposal' rule require for investment funds?

• AThe fund must be sold after 8 years.
• BThe investor is deemed to have disposed of the investment every 8 years, and exit tax mus…
• CThe fund manager must change the investment strategy every 8 years.
• DThe investor receives a tax refund after 8 years.

What is the effect of inflation on the purchasing power of money?

• AIt increases purchasing power.
• BIt decreases purchasing power.
• CIt has no effect on purchasing power.
• DIt stabilizes purchasing power.

If two assets in a portfolio have a correlation coefficient of -1.0, what does this indicate?

• AThey move in the exact same direction and magnitude.
• BThey move in opposite directions in perfect synchronization.
• CThey have no relationship to each other.
• DThey are both guaranteed to lose money.

Which of the following individuals may be eligible to receive deposit interest free from DIRT in Ireland?

• AAny individual over the age of 60.
• BIndividuals who are over 65 (or their spouse/civil partner) whose total income is below t…
• CAny first-time property buyer.
• DAll non-corporate investors.

Which of the following is an example of systematic risk?

• AA company's CEO resigning.
• BA product recall by a specific manufacturer.
• CA sudden increase in interest rates by the European Central Bank (ECB).
• DA strike by workers at a specific mining firm.

An investor bought ordinary shares for €10,000 in 1999. In 2026, the shares are sold for €18,000. When calculating the Capital Gains Tax (CGT) liability, what inflation adjustment (indexation relief) is available under Irish tax rules?

• AFull indexation relief up to the date of sale in 2026.
• BNo indexation relief is available because it was abolished for all acquisitions after 200…
• CA flat 10% deduction is applied to the final gain.
• DNo indexation relief is available under any circumstances.

If a portfolio earns a nominal return of 6% in a year, and the rate of inflation is 2%, what is the approximate 'real return' on the portfolio?

• A8%
• B4%
• C3%
• D12%

How are capital losses treated for Capital Gains Tax (CGT) purposes in Ireland?

• ACapital losses can be set off against income tax liabilities.
• BCapital losses can only be offset against capital gains in the same year or carried forwa…
• CCapital losses are lost if they are not offset in the year they occur.
• DCapital losses can be carried back to reclaim tax paid in previous years.

Which of the following assets generally carries the HIGHEST level of liquidity risk?

• AShares in a large plc listed on the FTSE 100
• BUnits in a money market deposit fund
• CA commercial office block in Dublin
• DIrish Government Bonds (Gilts)

In Ireland, what tax is levied on the rental income received by an individual landlord from a residential property?

• ACapital Gains Tax (CGT) at 33%
• BDIRT at 33%
• CIncome tax at the individual's marginal rate (up to 40%) plus USC and PRSI.
• DExit Tax at 41%

How is volatility typically represented in investment documentation, such as the Key Information Document (KID) for a fund?

• AAs a percentage representing the fund's maximum loss.
• BThrough the Summary Risk Indicator (SRI), a score from 1 to 7 based on historical volatil…
• CAs the Sharpe ratio.
• DAs the interest rate yield.

What is the standard rate of Dividend Withholding Tax (DWT) deducted from dividends paid by Irish resident companies?

• A12.5%
• B20%
• C25%
• D33%

What is the primary purpose of calculating the Sharpe Ratio of an investment portfolio?

• ATo measure the portfolio's total exposure to systematic risk.
• BTo calculate the portfolio's excess return per unit of total risk (standard deviation).
• CTo identify the tax liability of the portfolio.
• DTo forecast the future returns of the market.

Which of the following transactions is considered a disposal for Capital Gains Tax (CGT) purposes in Ireland?

• ATransferring shares into a pension fund (PRSA).
• BSelling ordinary shares on the stock exchange.
• CTransferring assets to a spouse or civil partner.
• DTransferring shares from one broker to another without changing ownership.

What does 'credit risk' (default risk) refer to in bond investing?

• AThe risk that the bond's price will fall due to rising interest rates.
• BThe risk that the bond issuer will fail to make interest or principal payments when due.
• CThe risk that the bond cannot be sold quickly in the market.
• DThe risk that inflation will erode the bond's purchasing power.