ICWIM Exam Dumps : International Certificate in Wealth & Investment Management

ROCE (Return on Capital Employed)

Measures the efficiency and profitability of a company relative to the capital invested in the business.

Formula: ROCE=Earnings Before Interest and Tax (EBIT)Capital Employed\text{ROCE} = \frac{\text{Earnings Before Interest and Tax (EBIT)}}{\text{Capital Employed}}ROCE=Capital EmployedEarnings Before Interest and Tax (EBIT)​

Why the Answer is C

ROCE specifically focuses on the returns generated from the capital base, providing insight into how effectively the business is using its resources.

Why Other Options are Incorrect

A. Net profitability: Refers to net profit margins, not ROCE.

B. Borrowing costs: ROCE ignores borrowing costs as it considers EBIT.

D. Net profit in relation to cost of sales: Refers to gross profit margin, not ROCE.

ICWIM Study Guide, Chapter on Financial Ratios: Covers ROCE and its applications.

Corporate Finance Texts: Defines ROCE as a key performance metric.

ReferencesThus, the correct answer isC. Returns generated from capital invested in the business.

Central Bank Actions with Foreign Reserves

Central banks use foreign reserves to intervene in currency markets to stabilize or influence their nation’s currency exchange rate.

This can involve buying or selling foreign currencies.

Why the Answer is C

Currency interventions aim to manage exchange rate volatility, maintain competitiveness, or stabilize the currency during economic shocks.

Why Other Options are Incorrect

A. Inflation: Not directly controlled through currency market interventions.

B. Money supply: Managed through monetary policy tools like open market operations.

D. Short-term interest rates: Controlled through domestic monetary policy, not foreign reserves.

ICWIM Study Guide, Chapter on Monetary Policy: Explains the use of foreign reserves for currency stabilization.

Central Banking Principles: Discusses currency interventions.

ReferencesThus, the correct answer isC. To influence the nation's currency.

The ongoing charges figure (OCF) of a mutual fund is included in its Key Investor Information Document (KIID). The KIID provides standardized and essential information about a fund’s costs, risks, and performance, ensuring transparency for investors.