CISI Test Questions Latest Update 2025-2026 60
Questions and 100% Verified Correct Answers
Guaranteed A+
A bonus issue made to shareholders is an example of which type of corporate action? -
CORRECT ANSWER: Mandatory
At what age can young people access the proceeds of their Junior ISA -CORRECT
ANSWER: 18
Define an investment bond -CORRECT ANSWER: A single premium life insurance
policy taken out for the purposes of investment
Give three groups which custodian banks look after securities on behalf of -CORRECT
ANSWER: 1. Fund managers
2. Pension funds
3. Insurance companies
How are unit trust purchased? -CORRECT ANSWER: Directly from the manager
How are unit trusts and OEIC's priced? -CORRECT ANSWER: Directly based on the
value of the assets
How are unit trusts normally purchased? -CORRECT ANSWER: Purchasing direct from
the manager
How do portfolio managers use futures contracts and put options to hedge against the
value of their portfolios falling? -CORRECT ANSWER: Selling a sufficient number of
futures contracts or buying put options
, How do you calculate flat yield? -CORRECT ANSWER: Annual coupon/bond price X
100
How do you calculate the effective annual interest rate? -CORRECT ANSWER: Divide
the annual rate by the frequency within a year it is charged. Then multiply it by its self
the number of times interest is charged in a year. e.g. 16%/2 = 0.08. 1.08x1.08 = 1.1664
= 16.64%.
or
50%/12 = 4.167% a month. 1.0467 x1.0467 (12 times) = 63.2%
How do you calculate the flat yield on a bond? -CORRECT ANSWER: coupon/price x
100 (e.g. 8%/£124 = 6.45%)
How does a private investor normally purchase investment trust shares in the
secondary market? -CORRECT ANSWER: Through a stockbroker or financial
intermediary
How does a private investor purchase investment trust shares in the secondary market?
-CORRECT ANSWER: Through a stockbroker or financial intermediary
How does LSE's SETS dealing system operate? -CORRECT ANSWER: It is order-
driven
How is the share price of an investment trust determined? -CORRECT ANSWER: A
combination of the value of the underlying assets and supply and demand
If a company announces a bonus issue on a 5:6 basis, what will existing shareholders
receive? -CORRECT ANSWER: 5 shares for every 6 they own
Questions and 100% Verified Correct Answers
Guaranteed A+
A bonus issue made to shareholders is an example of which type of corporate action? -
CORRECT ANSWER: Mandatory
At what age can young people access the proceeds of their Junior ISA -CORRECT
ANSWER: 18
Define an investment bond -CORRECT ANSWER: A single premium life insurance
policy taken out for the purposes of investment
Give three groups which custodian banks look after securities on behalf of -CORRECT
ANSWER: 1. Fund managers
2. Pension funds
3. Insurance companies
How are unit trust purchased? -CORRECT ANSWER: Directly from the manager
How are unit trusts and OEIC's priced? -CORRECT ANSWER: Directly based on the
value of the assets
How are unit trusts normally purchased? -CORRECT ANSWER: Purchasing direct from
the manager
How do portfolio managers use futures contracts and put options to hedge against the
value of their portfolios falling? -CORRECT ANSWER: Selling a sufficient number of
futures contracts or buying put options
, How do you calculate flat yield? -CORRECT ANSWER: Annual coupon/bond price X
100
How do you calculate the effective annual interest rate? -CORRECT ANSWER: Divide
the annual rate by the frequency within a year it is charged. Then multiply it by its self
the number of times interest is charged in a year. e.g. 16%/2 = 0.08. 1.08x1.08 = 1.1664
= 16.64%.
or
50%/12 = 4.167% a month. 1.0467 x1.0467 (12 times) = 63.2%
How do you calculate the flat yield on a bond? -CORRECT ANSWER: coupon/price x
100 (e.g. 8%/£124 = 6.45%)
How does a private investor normally purchase investment trust shares in the
secondary market? -CORRECT ANSWER: Through a stockbroker or financial
intermediary
How does a private investor purchase investment trust shares in the secondary market?
-CORRECT ANSWER: Through a stockbroker or financial intermediary
How does LSE's SETS dealing system operate? -CORRECT ANSWER: It is order-
driven
How is the share price of an investment trust determined? -CORRECT ANSWER: A
combination of the value of the underlying assets and supply and demand
If a company announces a bonus issue on a 5:6 basis, what will existing shareholders
receive? -CORRECT ANSWER: 5 shares for every 6 they own
