Chartered Institute for Securities and Investment (CISI) Level 3 Practice Exam

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• Non-residents in the UK are taxed on:
• Which of the following is NOT one of the FCA's statutory objectives?
• Which of the following is NOT listed as a main activity in the professional/wholesale sector?
• Before pension benefits are taken, which tax treatment applies to pension funds?
• Which of the following is NOT a main retail sector activity?
• In corporate bond funds, what is the minimum percentage of assets that must be invested in sterling-denominated BBB- minus or above corporate bonds?
• Which statement correctly describes bearer form?
• Which statement correctly compares volatility of crypto and fiat currencies?
• Which body represents professional standards for investment funds (Savings and investment schemes)?
• Which regulator is primarily responsible for macro-prudential regulation?
• Which office must register an LPA before it can be used?
• Which statement about listing on the London Stock Exchange is true?
• What is the difference between government debt and the budget deficit?
• What risk is associated with synthetic replication?
• Which LSE trading system is used for less liquid shares that are not traded on SETS?
• TERP stands for which term in the context of rights issues?
• Which CISI Code of Conduct principle relates to Personal Accountability and requires acting with integrity, honesty, and due skill, care and diligence?
• Which of the following is a fundamental PRA rule?
• Investment trusts are closed-ended funds that trade on the stock market. Which statement is true?
• In ABSs, which assets are commonly securitised?
• Which statement best describes how ethics should be treated in regulation?
• Which of the following is a positive impact of inflation?
• Who is exempt from corporation tax?
• Which statement best describes the Know Your Customer requirement?
• Main types of income include which of the following?
• Which account in the balance of payments records transactions involving the export or import of goods and services, and receipts such as dividends and remittances?
• Which formula best represents the forward exchange rate when adjusting for interest rate differentials?
• What do Third-party Administrators (TPAs) do?
• Which mortgage rate category protects borrowers from rates rising above a cap?
• What is the dividend allowance?
• UK gilts funds must invest at least what percentage of assets in sterling-denominated government-backed securities?
• Which statement correctly defines a domestic bond?
• What is the profit mechanism for ZDPs?
• Which office issues treasury bills weekly for the Treasury?
• Which body supervises an OEIC?
• Which term describes investment advice that is based on the firm's own product range?
• In an ETF, who are typically the authorised participants?
• What does the Public Sector Borrowing Requirement represent?
• What fees are usually charged by fund managers?
• In a principal-agent relationship, which statement best describes the agent's primary function?
• Which of the following is a security token?
• Robo advice is typically focused on which types of investments?
• What is the main aim of the Monetary Policy Committee?
• AMC stands for what in the context of a CIS?
• Which statement about an executor is accurate?
• Medium Term Notes (MTN) differ from other bonds in that they are issued how?
• Which index replicates the performance of the top 300 A-share stocks listed on the Shanghai and Shenzhen stock exchanges?
• Authorised Unit Trust characteristics describe management, pricing, and settlement; open-ended; dual-priced; trading and settlement with the authorised manager; NAV-based pricing; created by the trustee.
• What defines a spot transaction in FX?
• Which statement about tenancy in common is true?
• The FSMA 2000 replaced a regime characterized by which of the following?
• The CAC 40 represents 40 largest stocks on which market?
• Which statement best describes the current form of money market instruments?
• In a Self Invested Personal Pension (SIPP), who makes the investment choices?
• Conventional gilts account for approximately what proportion of UK government bonds?
• Which statement about cryptocurrency supply is true?
• Which statement describes regulatory oversight of cryptocurrencies in the UK?
• The CSI 300 Index tracks the performance of A-share stocks listed on which exchanges?
• Risks of accident and sickness cover: Which statement describes a risk to the insurer regarding pre-existing medical conditions?
• Investment pathways: Which pathway aims to preserve annuity purchasing power?
• Which exchange operates the electronic global futures and OTC marketplace for trading energy commodity contracts, with its ICE Futures subsidiary?
• For OEICs, who prices the daily NAV?
• Which index is the main US market benchmark consisting of 500 large US companies?
• Participating preference shares entitle the holder to?
• Settlement time for an OEIC upon ownership is
• Which statement correctly describes the two policy instruments the FPC can use to influence the FCA and PRA?
• GDP is typically calculated quarterly. Which option correctly identifies the frequency?
• Tax relief on pension contributions applies to which of the following?
• STRIPS are created by stripping conventional bonds into which cash flows?
• Which of the following is an exception to VAT payable?
• If you take the entire defined contribution pension as a lump sum at retirement, what percentage of the lump sum is typically tax-exempt?
• What are the five stages of the financial planning process?
• How can members of a defined contribution pension access their funds?
• Which date is used for settlement in a spot FX transaction?
• Preferred bonds or preferreds are typically described as which of the following?
• To gain admission to AIM, which requirement is correct?
• What does LPA stand for in the context of power of attorney?
• Which item would typically be considered material information that advisers must disclose to clients?
• Which of the following is NOT included in the definition of insider dealing?
• Which statement describes ABSs?
• Which statement about cryptocurrency transaction speed is true?
• Which statement best describes a euro sterling bond?
• What types of business insurance exist?
• What is the base rate savings allowance?
• Which of the following is a new corporate offence introduced by the Bribery Act 2010?
• How do you work out the variable interest rate paid in an interest rate swap?
• Which index reflects the performance of companies listed on the Shanghai Stock Exchange, including those on the NASDAQ-style sci-tech board?
• How often are coupons usually paid?
• Which organisation is the trade body for the UK authorised open-ended funds industry?
• Which FCA principle requires firms to deal with regulators in an open and cooperative way?
• Which CISI principle states never seek personal advantage from confidential information?
• SETS queue priority is given on the basis of which criteria?
• In which year is corporation tax not paid?
• Investors in residential property mainly derive returns from:
• Which statement about REITs is true?
• Which of the following best describes preference shares?
• In FX quotes, what is the base currency assumed to be?
• One automatic UK residency criterion is spending 183 days or more in the UK in the tax year.
• During ETF creation, what is a creation unit?
• Which of the following can be types of preference shares?
• Which of the following is NOT a main segment of the London Stock Exchange's Main Market?
• Which organization is the professional body for investment funds, specifically OEICs and Unit trusts?
• The two main categories of derivatives?
• Which derivatives are exchange-traded?
• Which statement accurately describes the ETF sponsor?
• Which exchange rate arrangement gradually widens the permissible range around a central rate to move away from a fixed rate?
• Which statement best describes cryptocurrency?
• What is the US equivalent of the Financial Conduct Authority (FCA)?
• Which index provides a wider view of the US stock market?
• Which French index represents the 40 most significant stocks among the 100 largest by market capitalization on Euronext Paris?
• Which FCA principle requires paying due regard to customer interests and treating them fairly?
• Which organization is the professional body for wealth management?
• OEIC pricing: usually single priced but can be dual priced.
• How often are treasury bills issued and what maturities do they typically have?
• What is the role of an agent?
• What is the defining feature of a zero dividend preference share (ZDP)?
• Which German index consists of 30 major German companies (now 40) trading on the Frankfurt Stock Exchange?
• In the FX quote 1.1164/66, which price is the bid (buy) and which is the ask (sell)?
• In OEICs using single pricing, a dilution levy may be used to cover the cost of dealing expenses and commissions.
• What is a custodian bank?
• What needs to be done in order to be able to use a LPA (lasting power of attorney)?
• Contrarian investing is best described as:
• What is the nil rate band (NRB) for IHT?
• Which statement about ETFs is true?
• Which regulator prescribes the maximum price at which a fund manager may issue new units?
• What is the typical maturity profile for negotiable certificates of deposit?
• Which fund structure is set up as a company but not under the Companies Act?
• GDP is calculated as which components?
• What is the main duty of the Federal Open Market Committee (FOMC)?
• In occupational pension schemes, who do asset managers report to?
• OEIC (ICVC/SICAV) characteristics: set up as a company but not under the Companies Act; open-ended; managed by the authorised corporate director; supervised by the Depositary; usually single priced; trading and settlement dealt with by the ACD; daily pricing by the ACD.
• MTFs stands for Multilateral Trading Facilities; what do they do?
• What is a deputy order?
• Corporation tax is charged on which of the following?
• Which statement best describes the impact of the Financial Services and Markets Act 2000 (FSMA 2000)?
• What is the state pension age mentioned in the material?
• Flat yield for bonds is calculated as which expression?
• Which statement about the five stages is true?
• Which sequence correctly represents the stages of the economic cycle?
• Which statement correctly describes foreign bonds?
• Which statement best describes the Financial Conduct Authority's (FCA) main scope?
• Which of the following best represents the GDP formula?
• What is the additional SDLT charge for a second property in the UK?
• Which exchange is the world's leading international derivatives exchange with principal products including German bond futures and options (Bund)?
• Investment pathways: Which pathway matches plan to start taking money as long-term income in the next five years?
• Gilt interest payments are typically made in two equal instalments each year. What is the interval between payments?
• Which rates apply to gains on the sale of residential property?
• Who is responsible for the daily pricing of units in an Authorised Unit Trust?
• Which LSE trading system is used for trading UK gilts and retail-size corporate bonds?
• What is a negative consequence of the gig economy as described?
• Growth investing is best described as:
• Which CISI principle requires you to decline to act on matters you are not competent to handle?
• The Public Sector Borrowing Requirement measures what?
• Which of the following is a type of domicile?
• Strategic bond funds must invest at least what proportion of assets in sterling-denominated fixed-interest securities?
• Which is a subjective factor for client risk profiling?
• Mortgage interest rates: Which rate is linked to the Bank of England base rate?
• What defines a split-capital investment trust?
• Which feature defines conventional UK government bonds?
• Which of the following is a responsibility to comply with the Data Protection Act 2018?
• Which statement about the conditionalities for insider dealing is NOT true?
• Which exchange rate system is pegged to a currency with central bank intervention to keep it fixed?
• Which is an objective factor for client risk profiling?
• OEIC transactions settle on which date after the trade date?
• In occupational pension schemes, who typically appoints the asset managers who run investment portfolios?
• Which FCA principle requires the firm to manage conflicts of interest fairly?
• Which institution sets monetary policy for the entire Eurozone?
• The capital account records international capital transactions related to investments in which assets?
• A higher than average dividend yield usually indicates which of the following?
• Which trading system handles retail-size government bonds and gilts?
• Which term describes an action that requires the stakeholder to decide whether to participate (for example a takeover bid)?
• Types of whole-of-life assurance: Which type pays a guaranteed sum plus any profits made during the period between the policy being taken out and death?
• What time span is mortgage payment protection cover usually intended for?
• Which is the largest exchange-traded derivatives market?
• A lower than average dividend yield could indicate which of the following?
• Dual-dated bonds allow repayment to be carried out between two dates. Which statement best describes them?
• Which professional body represents savings and investment schemes?
• Which statement about full replication in physical ETFs is correct?
• Investors in commercial property mainly derive returns from:
• In active management, which description best matches the top-down approach?
• What does it mean for a company to be 'thinly-traded'?
• Which class of National Insurance is paid by employers?
• Which FCA principle requires considering clients' communication needs and communicating in a clear, fair and non misleading way?
• In CREST settlement, which stage follows Stage 1 Trade Matching?
• How would you calculate how much might need to be in your pension pot assuming you'd like an annual salary of £30 000 and the fund pays 4% interest
• What happens with a contributing share when the company calls up the remaining nominal value?
• Are contracts legally binding for individuals under the age of 18?
• Which of the following is NOT one of the ONS's three main measures of inflation?
• Which statement best describes covered bonds?
• Which type of money market fund must have a fluctuating NAV?
• What are the two main types of cybercrime described?
• Which statement is true about the Monetary Policy Committee?
• Momentum investing is best described as:
• Stamp duty is paid on which transactions?
• Bond security is typically provided by what?
• UK index-linked gilts funds must invest at least what percentage of assets in UK index-linked gilts?
• Which statement best describes the role of ethics in regulation?
• What does a standardised contract in derivatives require?
• If a person dies without leaving a will, who determines the distribution of their estate?
• What is a negative pledge clause?
• Zero dividend preference shares might be issued by which type of investment vehicle?
• Demutualisation refers to...
• In options trading, what does 'taking for the call' or 'taking for the put' refer to?
• Which FCA principle requires a firm to act to deliver good outcomes for retail customers?
• Which statement correctly identifies the second stage of the financial planning process?
• Which of the following is NOT a type of domicile?
• Which statement about eurobonds is true?
• In CREST settlement, which stages occur simultaneously?
• Market abuse usually arises in circumstances where investors are disadvantaged due to unlawful behaviour. Which of the following best describes its criminal status?
• Which derivatives are OTC?
• High yield bond funds must invest at least what percentage of assets in sterling-denominated fixed-interest securities?
• Which index is composed of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange?
• Who typically issues certificates of deposit (CDs)?
• What does CPIH stand for?
• What does the Ongoing Charges Figure, or OCF, include for UCITS funds?
• Which of the following is NOT one of the FCA's statutory objectives?
• When is an administrator appointed?
• Spot transaction settlement time is typically
• Which of the following is a role of central banks?
• Which statement best describes the PRA requirement to maintain resources?
• Which UK index consists of the 100 largest companies by market capitalization?
• In joint ownership, what happens to a deceased owner's share of the asset?
• In authorised unit trusts, who typically acts as trustees?
• Critical illness cover is usually paid in which form and to which age range is it typically available?
• Which statement about bond credit ratings of S&P/Fitch is true?
• Which account records international capital transactions related to investments in business, real estate, bonds and stocks?
• Which element describes the client’s personal opinion on the risks associated with making an investment, based on their prior knowledge?
• What is the current personal allowance threshold?
• Regarding maturity, which statement correctly describes corporate bonds and commercial paper (CP)?
• Custodian banks serve which clients?
• Which standards do issuers of Green bonds often adhere to?
• What is the aim of the FCA's Fair Treatment of Customers (FTOC) initiative?
• Which organization is the professional body for insurance companies in the UK?
• Which index is price-weighted?
• In index-linked bonds, which statement is true?
• Which statement best describes exchange-traded derivatives?
• Which is the professional body for banks?
• The stamped copy of the LPA is submitted to which entities to show the attorney's authority?
• Value investing is best described as:
• Which FCA principle focuses on organizing and controlling a firm's affairs responsibly and effectively, including risk management systems?
• Which statement about the five stages is true?
• What is the main scope of the Financial Policy Committee (FPC)?
• How is long-term care cover usually paid out?
• Floating rate notes (FRNs) have interest rates tied to benchmark rates such as SONIA or SOFR. Which statement is true?
• A bonus issue is also known as what?
• Which of the following is NOT included in the definition of insider dealing under the Criminal Justice Act 1993?
• Which corporate action is voluntary, requiring the stakeholder to make a decision (for example a takeover bid)?
• Naked or uncovered dividend refers to dividends paid out from which source?
• Which of the following is true about admission to AIM?
• Which of the following describes certificates of deposit interest arrangements?
• Help to Buy ISA annual allowance?
• Under FCA requirements for customer complaints, which statement is true?
• What are the usual settlement times for money market instruments?
• What does the Total Expense Ratio (TER) represent?
• What protection scheme does the Financial Services Compensation Scheme (FSCS) operate?
• Types of partnerships: Which partnership is a separate legal entity to its members and may hold land in its name?
• What is the main scope of the Prudential Regulation Authority (PRA)?
• Which statement best describes independent advice?
• Which statement about puttable and callable bonds is true?
• Innovative Finance ISA allowance?
• What best describes the relationship between the derivatives market and the physical market?
• Which of the following is true about market abuse?
• When outsourcing processing, which is essential to protect information?
• Stamp duty is not payable on purchases of which assets?
• What is stratified sampling in ETF replication?
• Which LSE trading system is used for fixed-interest securities and AIM stocks not traded on SETSqx?
• Is the premium of an option refundable?
• Which index includes the largest companies trading on the Hong Kong Stock Exchange and covers about 65% of its total market capitalization?
• Which action is a mandatory corporate action (no intervention required by shareholders or bondholders)?
• What is the primary role of the ETF custodian?
• Which statement is true about the information financial advisers are required to provide to clients?
• Which of the following best describes when stamp duty reserve tax (SDRT) is payable?
• Which FCA principle requires firms to arrange adequate protection for clients’ assets?
• Value of a bond given the nominal and the price is (Nominal/£100) × price per £100 nominal. Which of the following represents this formula?
• Who sets the UK's official base rate of interest?
• Forward contracts are typically
• Which statement about cumulative preference shares is correct?
• What distinguishes smart-beta indices from traditional index funds?
• The SSE Composite Index reflects the performance of companies listed on which stock exchange?
• Which statement correctly describes how the bid and ask are chosen for FX quotes in a buy or sell?
• When does the balance of payments balance?
• Irredeemable bonds have which characteristic?
• Which form allows unequal shares and bequeathing to different heirs via a will?
• Under tenancy in common, upon the death of an owner, to whom is that owner's share passed?
• Which statement describes a potential consequence of deflation?
• What is the main LSE trading platform (order-driven system) used to trade shares in the FTSE All-Share Index?
• What does the capital account record?
• Which statement correctly describes fixed vs floating security?
• If you have not been classed as a UK resident for the three previous tax years, non-residence can be indicated by spending how many days in the UK?
• The terms exercise price and premium relate to which derivative?
• Are money market instruments directly accessible to private investors?
• What happens in ETF redemption?
• For a forex forward transaction, the settlement date is: Date agreed between the two parties.
• Which index focuses on NASDAQ including many technology companies?
• Which settlement method is commonly used for FX transactions?
• The IHT rate is reduced to 36% if what condition is met?
• How is life assurance usually paid?
• Critical illness cover typically excludes illnesses resulting from which of the following?
• GDP is best described as:
• Which statement best describes APR as used by lenders?
• Are dividends between the declaration date of the dividend payment and the dividend pay date sold cum dividend or ex dividend?
• Which corporate action has a default option that will occur if the shareholder does not intervene?
• Which principle requires a firm to take reasonable care to ensure the suitability of its advice by obtaining sufficient information about its customers?
• Which statement correctly describes a eurobond?
• What is the primary role of the Financial Policy Committee (FPC)?
• Which statement about the Single Supervisory Mechanism (SSM) is correct?
• In a core-satellite portfolio, what percentage of the portfolio's value is typically indexed as the passive core?
• Junior ISA annual allowance?
• Which of the following is NOT one of the three main elements of a client’s risk profile?
• Retail service providers are best described as:
• Which statement best describes price-weighted indices?
• Which items are considered when assessing mortgage applicants?
• Which principle relates to the customer relationship of trust and ensures the suitability of advice and discretionary decisions?
• Which FCA principle requires the firm to maintain adequate financial resources?
• What does dying intestate mean?
• Which statement about outsourcing data protection implications is true?
• Which FCA conduct rule requires acting with integrity?
• Which of the following is a negative consequence of high inflation?
• Which organization is the professional body for OEICs and Unit trusts?
• The Hang Seng Index tracks the performance of the largest companies on which exchange?
• Which CISI principle includes treating everyone fairly and with respect, including the environment?
• What are contributing shares?
• How often do gilts pay interest?
• What does an equal weighted index methodology assume?
• Which type of crowdfunding involves investors receiving equity or shares in the venture?
• Which statement defines Attitude to Risk?
• Which settlement system enables paperless dematerialised settlement in the UK?
• According to Moody's, Ba and below are considered what?
• What does PvP stand for in FX settlement?
• From the material, at what age are you able to take a pension?
• Which statement best describes robo advice?
• Which statement describes a tax-related advantage of an offset mortgage?
• Dividend tax rate for higher rate taxpayers on dividends beyond the allowance?
• In dual pricing, the price of new units comprises which components?
• What is the standard settlement time across Europe for equity trades?
• How is income protection cover usually paid out and how much will it usually be?
• Which statement about preferred bonds is true?
• What does the optimisation replication method do?
• In OEIC settlements, which statement is true?
• How is accident and sickness cover usually paid out?
• Which FCA principle requires firms to observe proper market conduct standards?
• What are the capital gains tax rates for individuals?
• Which of the following measures of inflation is set to be phased out by 2030?
• A DDoS attack is defined as which of the following?
• Which FCA principle requires firms to conduct business with integrity?