HKSI Paper 1 Practice Exam

Which statements correctly describe Professional Investors?

A corporation with at least HK$40 million in assets A high-net-worth individual with at least HK$8 million portfolio Both A and B Neither A nor B

Correct Answer:

Both A and B

Explanation:

The defining idea is how professional investors are identified under Hong Kong rules. In Hong Kong, a corporation becomes a professional investor if it has net assets of at least HK$40 million, and an individual becomes a professional investor if their investments amount to at least HK$8 million in a portfolio. These thresholds are the standard criteria used to grant professional-investor status, which can affect eligibility for certain private placements and exemptions from some protective requirements. Since both conditions described match these criteria, they both correctly describe professional investors.

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