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Qualified Financial Adviser (QFA) Regulations Exam 2 Practice Test

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In the Deposit Guarantee Scheme example, what is guaranteed at maturity?
Correct Answer:
100% of original investment
Explanation:
The key idea is that the Deposit Guarantee Scheme protects your principal up to a defined limit if the bank fails. At maturity, the guarantee covers getting back the original amount you deposited, not extra or reduced amounts. In this example, that means you’re guaranteed 100% of your original investment (within the scheme’s cap). The other options don’t fit because they imply no protection, partial protection, or an amount far beyond what the scheme provides. Remember, the protection applies only up to the cap, so amounts above the cap wouldn’t be guaranteed.

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