Fso33b3 Main PDF

Financial services operations 3B (LAO) – FSO33B3
Department of Finance and Investment Management
FINANCIAL SERVICES OPERATIONS 3B
FSO33B3
Last Assessment Opportunity
Time: 3:00 hours Marks: 100
Assessor: Yusuf Patel Moderator: Thabo Gopane (Internal)

Jaicee Bam (External)
INSTRUCTIONS:
 This paper consists of 6 pages (including the cover page).

 Start each question on a new page.
 Write neatly
 Calculators are allowed, you cannot borrow a calculator.
Question Topic Marks Time
1 Risk 25 45 minutes
2 Islamic financial services 36 65 minutes
3 Property evaluation 19 34 minutes
4 Property evaluation MCQ 20 36 minutes
100 180 minutes
1
QUESTION 1 - (25 marks)
1.1) Explain what is meant by open trade reconciliation and list five risks
that a firm maybe susceptible to if open trade reconciliation is not
completed. (7)
1.2) Define operational risk and identify six factors that contribute to
operational risk. (8)
1.3) In three sentences explain the purpose of the following reports

1.3.1) AAF 01/06 (2)
1.3.2) SSAE 16/3402 (3)
1.4) Explain what is meant by the following terms

1.4.1) Political risk (2)
1.4.2) Systematic risk (2)
1.5) How can cash and securities risk be mitigated (1)
2.1) List and explain any eight ethical rules that apply to Islamic business
conduct. (16)
2.2) List and explain three factors that contribute to price stability in Islamic
financial markets (6)
2.3) List and explain the seven factors that are the Shariah Foundations of
Accountants’ Ethics (14)
3.1) List and explain the agents of productions (9)
3.2) List the five rights that an owner of property is entitled to. (5)
3.3) List five social factors that impact property value (5)
2
REQUIRED:
4.1) Demand for real estate may be affected by?
a. Increasing population and employment.

b. Availability of mortgage financing
c. Increases in purchasing power
d. All of the above
4.2) A good’s capacity to satisfy human desires or needs is known as?
a. Creative demands
b. Utility
c. Functional obsolescence
d. Effective demand
4.3) The three approaches to value are?
a. Market analysis, market consensus of opinion, and market research

b. Sales extraction, cost replication, and income multiplication
c. Sales comparison, cost, and income capitalization
d. Graphic analysis, linear regression, and statistical analysis
4.4) Market value can be described as?
a. The price a person paid for real property

b. The cost of the land plus the cost of the building
c. The present worth of future benefits
d. Whatever someone will pay for something
4.5) Capital is?
a. Accumulated wealth, a lump sum available for investment

b. The location of the center of government
c. A death sentence
d. The building in which a legislative body meets
4.6) A real property interest held by a lessee and conveying the right of use
and occupancy for a stated term and under certain conditions is called
the?
a. Leasehold estate
b. Fee simple estate
c. Leased fee estate
d. Determinable fee estate
3
4.7) The four forces that influence real estate values are?
a. Social, economic, governmental, and environmental

b. Land, labor, capital, and green space
c. Eminent domain, police power, escheat and taxation
d. Governmental, social, taxation and economic conditions
4.8) The city planning department indicated a vacant residential lot located
in the flood zone cannot be given a building permit. This site?
a. Has lost nearly all utility

b. Has become scarce
c. Has lost all desirability
d. Has lost any effective purchasing power
4.9) The value to be estimated is set by?
a. The property type

b. The client’s problem
c. Highest and best use
d. The existing zoning classification
4.10) A cash-equivalent price means?
a. The price reflects what a seller would accept as if he or she received

cash at the closing
b. The price includes the seller paying no more than 5 points (5%)
c. The rights in realty can only be fee simple
d. It is assumed that the buyer did not have to get a mortgage
4.11) The value of a property to a particular user is known as?
a. Market equal to cost

b. Value in exchange
c. Use value
d. Leasehold value
4.12) Ownership of real property by two or more parties with an undivided

interest is called?
a. Joint tenancy
b. Tenancy by the entirety
c. Sole proprietorship
d. Tenancy in common
4
4.13) When real property is sold by one person to another, the amount of
money used to compensate the seller is called?
a. The cost of the real property

b. The value of the real property
c. The price of the real property
d. The income of the real property
4.14) Demand for housing is affected when?
a. Builders cannot find enough building materials to complete the job

b. A new factory opens hiring several hundred new employees
c. Zoning laws restrict new construction to the point that not enough
homes are build
d. Builders do not recognize a downturn in the market
4.15) Stocks are?
a. A punishment for bad valuers

b. A lending instrument
c. A low-risk, high-yield investment
d. An ownership interest in a company (i.e., shares)
4.16) Economic influences include all of the following except?
a. Occupant income levels

b. Crime levels
c. Property rent levels
d. Property value levels
4.17) There are three approaches to estimating market value because?
a. Purchasers have three alternative options available

b. SACPVP says all valuers must use all three approaches to value
c. There are three ways to look at anything
d. It is required for good statistical significance
4.18) A trade area is?
a. An area where property owners trade rather than sell the properties
b. A geographic area from which a retail centre will draw its customers
c. An area where the owners-inhabitants are generally employed
d. An area where an office building owner will trade tenants with other
office building owners
5
4.19) You own a small rental house with two acres, and you marry a woman
who has a son from a previous marriage. To provide for your new
stepson, you give him a life estate in the small house. When your
stepson turns 18, he can?
a. Mortgage his interest

b. Rent the property out
c. Sell the life estate to someone else who will rent the property
d. All of the above
4.20) Servitudes are another division of property rights. They usually give
the right?
a. To cross over another person’s property without permission

b. To access the property to perform a specific service
c. To use the property during the term of the lease to a tenant
d. To re-enter the property if the payments are not made on time to a
lender
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Financial services operations 3B (LAO) – FSO33B3

Department of Finance and Investment Management

FINANCIAL SERVICES OPERATIONS 3B

Last Assessment Opportunity

Time: 3:00 hours Marks: 100

Assessor: Yusuf Patel Moderator: Thabo Gopane (Internal)

 This paper consists of 6 pages (including the cover page).

Question Topic Marks Time

100 180 minutes

QUESTION 1 - (25 marks)

1.3) In three sentences explain the purpose of the following reports

1.4) Explain what is meant by the following terms

1.5) How can cash and securities risk be mitigated (1)

QUESTION 2 - (36 marks)

QUESTION 3 - (19 marks)

3.1) List and explain the agents of productions (9)

QUESTION 4 - (20 marks)

4.1) Demand for real estate may be affected by?

a. Increasing population and employment.

4.2) A good’s capacity to satisfy human desires or needs is known as?

4.3) The three approaches to value are?

a. Market analysis, market consensus of opinion, and market research

4.4) Market value can be described as?

a. The price a person paid for real property

4.5) Capital is?

a. Accumulated wealth, a lump sum available for investment

a. Social, economic, governmental, and environmental

a. Has lost nearly all utility

4.9) The value to be estimated is set by?

a. The property type

4.10) A cash-equivalent price means?

a. The price reflects what a seller would accept as if he or she received

4.11) The value of a property to a particular user is known as?

a. Market equal to cost

4.12) Ownership of real property by two or more parties with an undivided

a. The cost of the real property

4.14) Demand for housing is affected when?

a. Builders cannot find enough building materials to complete the job

4.15) Stocks are?

a. A punishment for bad valuers

4.16) Economic influences include all of the following except?

a. Occupant income levels

4.17) There are three approaches to estimating market value because?

a. Purchasers have three alternative options available

4.18) A trade area is?

a. Mortgage his interest

a. To cross over another person’s property without permission

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