SIAA Accreditation Australia Exam Questions and Answers
Question 1. Under a stated convention, a company has debt of 120 million and shareholders' equity of 125 million.
What is its debt-to-equity ratio?
A. 0.96
B. 1.96
C. -0.04
D. 1.04
Correct Answer: A. 0.96
Explanation: Debt-to-equity compares the specified debt balance with shareholders' equity. Using the stated convention,
= 0.96. Analysts should verify the precise debt definition before comparing companies because some conventions include or
exclude particular liabilities.
Question 2. A company reports net income of A$50,000,000.00, preferred dividends of A$1,000,000.00, and 10
million weighted-average common shares. What is basic EPS using these figures?
A. A$0.20
B. A$4.90
C. A$5.10
D. A$5.00
Correct Answer: B. A$4.90
Explanation: Basic EPS allocates earnings available to common shareholders across the weighted-average common shares
outstanding. Subtracting preferred dividends leaves A$49,000,000.00, and dividing by 10 million shares gives A$4.90. Using total
net income without the preferred-dividend adjustment would overstate earnings attributable to common shares.
Question 3. An investor buys a share for A$40.00 and also buys a put with strike A$30.00 for A$3.00. Ignoring
costs and dividends, what is the maximum loss per share at expiration?
A. A$3.00
B. A$10.00
C. A$27.00
D. A$13.00
Correct Answer: D. A$13.00
Explanation: The protective put establishes a minimum sale value equal to the put strike at expiration. Maximum loss is stock cost
plus put premium minus strike: 40 + 3 - 30 = A$13.00. The premium is part of the cost of protection and therefore increases the
maximum loss relative to stock price minus strike alone.
Question 4. A company has current assets of 120 million and current liabilities of 90 million. What is its current
ratio?
A. 0.75
B. 30.00
C. 1.33
D. 2.33
Correct Answer: C. 1.33
Explanation: The current ratio equals current assets divided by current liabilities. = 1.33. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Page 1
,Question 5. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following description:
“The natural person who ultimately owns, controls, or benefits from an account, entity, or transaction.” Which
term is most directly associated with this description?
A. Beneficial owner
B. Customer due diligence
C. Terrorist financing
D. Politically exposed person
Correct Answer: A. Beneficial owner
Explanation: Beneficial owner is best understood as the natural person who ultimately owns, controls, or benefits from an account,
entity, or transaction. This interpretation is consistent with the way the concept is applied in professional securities and investment
practice, including activity overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The
other choices describe different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 6. A portfolio returned 9.0%, the risk-free rate was 3.0%, and portfolio volatility was 12.0%. What was the
Sharpe ratio?
A. 0.50
B. 0.75
C. 2.00
D. 6.00
Correct Answer: A. 0.50
Explanation: The Sharpe ratio is excess return over the risk-free rate divided by return volatility. Using the figures given, (9.0% -
3.0%) / 12.0% = 0.50. It is a unitless risk-adjusted performance measure, so the volatility belongs in the denominator.
Question 7. A currency pair is quoted at 0.8047 spot and 0.8127 for the relevant forward date, in identical quotation
terms. Which statement is correct?
A. The spot and forward rates imply no forward premium or discount.
B. The base currency trades at a forward discount of approximately 1.00% for the quoted period.
C. The forward relationship cannot be assessed from the two quoted rates.
D. The base currency trades at a forward premium of approximately 1.00% for the quoted period.
Correct Answer: D. The base currency trades at a forward premium of approximately 1.00% for the quoted period.
Explanation: Compare the forward rate with spot using the same quotation convention. The proportional difference is (0.8127 /
0.8047 - 1) × 100 = 1.00%, so the direction follows whether forward is above or below spot. This percentage describes the
quoted-period forward premium or discount and is not automatically an annualized measure.
Question 8. Currency A is quoted at 1.2331 units of Currency B per A, and Currency B is quoted at 111.21 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 112.44 units of Currency C per Currency A
B. 0.0111 units of Currency C per Currency A
C. 137.13 units of Currency C per Currency A
D. 90.18 units of Currency C per Currency A
Correct Answer: C. 137.13 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 1.2331 B/A × 111.21 C/B
= 137.13 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Page 2
,Question 9. A company has current assets of 150 million and current liabilities of 75 million. What is its current
ratio?
A. 2.00
B. 0.50
C. 75.00
D. 3.00
Correct Answer: A. 2.00
Explanation: The current ratio equals current assets divided by current liabilities. = 2.00. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Question 10. A share trades at A$40.00 and pays annual cash dividends of A$1.00 per share. What is the dividend
yield based on the current price?
A. 97.50%
B. 1.00%
C. 2.50%
D. 40.00%
Correct Answer: C. 2.50%
Explanation: Dividend yield equals annual cash dividend per share divided by current market price per share. A$1.00 / A$40.00 ×
100 = 2.50%. The calculation does not include capital gains or losses, so it is not a total-return measure.
Question 11. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The variability of a portfolio's return relative to the return of its benchmark.” Which term is most
directly associated with this description?
A. Exchange-traded fund
B. Fund of funds
C. Redemption risk
D. Tracking error
Correct Answer: D. Tracking error
Explanation: Tracking error is best understood as the variability of a portfolio's return relative to the return of its benchmark. This
interpretation is consistent with the way the concept is applied in professional securities and investment practice, including activity
overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The other choices describe
different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 12. A company earns net income of 15 million and has average common equity of 60 million. What is
return on equity?
A. 4.00%
B. 25.00%
C. 75.00%
D. 15.00%
Correct Answer: B. 25.00%
Explanation: Return on equity compares earnings available to common equity with the equity capital supporting those earnings.
Using the stated figures, × 100 = 25.00%. The measure should not be inverted because equity divided by income answers a
different question.
Page 3
, Question 13. A bond has a face value of A$100.00, an annual coupon rate of 3.0%, and a market price of A$94.00.
What is its current yield?
A. 3.00%
B. 3.19%
C. 4.00%
D. 6.38%
Correct Answer: B. 3.19%
Explanation: Current yield equals annual coupon cash flow divided by current market price, so the numerator is A$3.00. Dividing
by A$94.00 gives 3.19%. Current yield is not the coupon rate and it is not yield to maturity because it ignores the timing and amount
of the redemption cash flow.
Question 14. Currency A is quoted at 0.8144 units of Currency B per A, and Currency B is quoted at 160.19 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 130.46 units of Currency C per Currency A
B. 0.0051 units of Currency C per Currency A
C. 196.70 units of Currency C per Currency A
D. 161.01 units of Currency C per Currency A
Correct Answer: A. 130.46 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.8144 B/A × 160.19 C/B
= 130.46 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 15. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The market in which investors trade previously issued securities with other investors.” Which term
is most directly associated with this description?
A. Ask price
B. Market maker
C. Secondary market
D. Bid price
Correct Answer: C. Secondary market
Explanation: Secondary market is best understood as the market in which investors trade previously issued securities with other
investors. This interpretation is consistent with the way the concept is applied in professional securities and investment practice,
including activity overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The other
choices describe different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 16. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The yield difference between a credit instrument and a reference benchmark reflecting, among other
things, credit and liquidity considerations.” Which term is most directly associated with this description?
A. Treasury bill
B. Credit spread
C. Floating-rate note
D. Zero-coupon bond
Correct Answer: B. Credit spread
Explanation: Credit spread is best understood as the yield difference between a credit instrument and a reference benchmark
reflecting, among other things, credit and liquidity considerations. This interpretation is consistent with the way the concept is
applied in professional securities and investment practice, including activity overseen by Australian Securities and Investments
Commission (ASIC) and applicable market rules. The other choices describe different concepts or would lead to a materially
different risk, trading, valuation, or compliance conclusion.
Page 4
Question 1. Under a stated convention, a company has debt of 120 million and shareholders' equity of 125 million.
What is its debt-to-equity ratio?
A. 0.96
B. 1.96
C. -0.04
D. 1.04
Correct Answer: A. 0.96
Explanation: Debt-to-equity compares the specified debt balance with shareholders' equity. Using the stated convention,
= 0.96. Analysts should verify the precise debt definition before comparing companies because some conventions include or
exclude particular liabilities.
Question 2. A company reports net income of A$50,000,000.00, preferred dividends of A$1,000,000.00, and 10
million weighted-average common shares. What is basic EPS using these figures?
A. A$0.20
B. A$4.90
C. A$5.10
D. A$5.00
Correct Answer: B. A$4.90
Explanation: Basic EPS allocates earnings available to common shareholders across the weighted-average common shares
outstanding. Subtracting preferred dividends leaves A$49,000,000.00, and dividing by 10 million shares gives A$4.90. Using total
net income without the preferred-dividend adjustment would overstate earnings attributable to common shares.
Question 3. An investor buys a share for A$40.00 and also buys a put with strike A$30.00 for A$3.00. Ignoring
costs and dividends, what is the maximum loss per share at expiration?
A. A$3.00
B. A$10.00
C. A$27.00
D. A$13.00
Correct Answer: D. A$13.00
Explanation: The protective put establishes a minimum sale value equal to the put strike at expiration. Maximum loss is stock cost
plus put premium minus strike: 40 + 3 - 30 = A$13.00. The premium is part of the cost of protection and therefore increases the
maximum loss relative to stock price minus strike alone.
Question 4. A company has current assets of 120 million and current liabilities of 90 million. What is its current
ratio?
A. 0.75
B. 30.00
C. 1.33
D. 2.33
Correct Answer: C. 1.33
Explanation: The current ratio equals current assets divided by current liabilities. = 1.33. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Page 1
,Question 5. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following description:
“The natural person who ultimately owns, controls, or benefits from an account, entity, or transaction.” Which
term is most directly associated with this description?
A. Beneficial owner
B. Customer due diligence
C. Terrorist financing
D. Politically exposed person
Correct Answer: A. Beneficial owner
Explanation: Beneficial owner is best understood as the natural person who ultimately owns, controls, or benefits from an account,
entity, or transaction. This interpretation is consistent with the way the concept is applied in professional securities and investment
practice, including activity overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The
other choices describe different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 6. A portfolio returned 9.0%, the risk-free rate was 3.0%, and portfolio volatility was 12.0%. What was the
Sharpe ratio?
A. 0.50
B. 0.75
C. 2.00
D. 6.00
Correct Answer: A. 0.50
Explanation: The Sharpe ratio is excess return over the risk-free rate divided by return volatility. Using the figures given, (9.0% -
3.0%) / 12.0% = 0.50. It is a unitless risk-adjusted performance measure, so the volatility belongs in the denominator.
Question 7. A currency pair is quoted at 0.8047 spot and 0.8127 for the relevant forward date, in identical quotation
terms. Which statement is correct?
A. The spot and forward rates imply no forward premium or discount.
B. The base currency trades at a forward discount of approximately 1.00% for the quoted period.
C. The forward relationship cannot be assessed from the two quoted rates.
D. The base currency trades at a forward premium of approximately 1.00% for the quoted period.
Correct Answer: D. The base currency trades at a forward premium of approximately 1.00% for the quoted period.
Explanation: Compare the forward rate with spot using the same quotation convention. The proportional difference is (0.8127 /
0.8047 - 1) × 100 = 1.00%, so the direction follows whether forward is above or below spot. This percentage describes the
quoted-period forward premium or discount and is not automatically an annualized measure.
Question 8. Currency A is quoted at 1.2331 units of Currency B per A, and Currency B is quoted at 111.21 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 112.44 units of Currency C per Currency A
B. 0.0111 units of Currency C per Currency A
C. 137.13 units of Currency C per Currency A
D. 90.18 units of Currency C per Currency A
Correct Answer: C. 137.13 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 1.2331 B/A × 111.21 C/B
= 137.13 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Page 2
,Question 9. A company has current assets of 150 million and current liabilities of 75 million. What is its current
ratio?
A. 2.00
B. 0.50
C. 75.00
D. 3.00
Correct Answer: A. 2.00
Explanation: The current ratio equals current assets divided by current liabilities. = 2.00. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Question 10. A share trades at A$40.00 and pays annual cash dividends of A$1.00 per share. What is the dividend
yield based on the current price?
A. 97.50%
B. 1.00%
C. 2.50%
D. 40.00%
Correct Answer: C. 2.50%
Explanation: Dividend yield equals annual cash dividend per share divided by current market price per share. A$1.00 / A$40.00 ×
100 = 2.50%. The calculation does not include capital gains or losses, so it is not a total-return measure.
Question 11. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The variability of a portfolio's return relative to the return of its benchmark.” Which term is most
directly associated with this description?
A. Exchange-traded fund
B. Fund of funds
C. Redemption risk
D. Tracking error
Correct Answer: D. Tracking error
Explanation: Tracking error is best understood as the variability of a portfolio's return relative to the return of its benchmark. This
interpretation is consistent with the way the concept is applied in professional securities and investment practice, including activity
overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The other choices describe
different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 12. A company earns net income of 15 million and has average common equity of 60 million. What is
return on equity?
A. 4.00%
B. 25.00%
C. 75.00%
D. 15.00%
Correct Answer: B. 25.00%
Explanation: Return on equity compares earnings available to common equity with the equity capital supporting those earnings.
Using the stated figures, × 100 = 25.00%. The measure should not be inverted because equity divided by income answers a
different question.
Page 3
, Question 13. A bond has a face value of A$100.00, an annual coupon rate of 3.0%, and a market price of A$94.00.
What is its current yield?
A. 3.00%
B. 3.19%
C. 4.00%
D. 6.38%
Correct Answer: B. 3.19%
Explanation: Current yield equals annual coupon cash flow divided by current market price, so the numerator is A$3.00. Dividing
by A$94.00 gives 3.19%. Current yield is not the coupon rate and it is not yield to maturity because it ignores the timing and amount
of the redemption cash flow.
Question 14. Currency A is quoted at 0.8144 units of Currency B per A, and Currency B is quoted at 160.19 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 130.46 units of Currency C per Currency A
B. 0.0051 units of Currency C per Currency A
C. 196.70 units of Currency C per Currency A
D. 161.01 units of Currency C per Currency A
Correct Answer: A. 130.46 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.8144 B/A × 160.19 C/B
= 130.46 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 15. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The market in which investors trade previously issued securities with other investors.” Which term
is most directly associated with this description?
A. Ask price
B. Market maker
C. Secondary market
D. Bid price
Correct Answer: C. Secondary market
Explanation: Secondary market is best understood as the market in which investors trade previously issued securities with other
investors. This interpretation is consistent with the way the concept is applied in professional securities and investment practice,
including activity overseen by Australian Securities and Investments Commission (ASIC) and applicable market rules. The other
choices describe different concepts or would lead to a materially different risk, trading, valuation, or compliance conclusion.
Question 16. A candidate preparing for SIAA Accreditation Exams (Australia) encounters the following
description: “The yield difference between a credit instrument and a reference benchmark reflecting, among other
things, credit and liquidity considerations.” Which term is most directly associated with this description?
A. Treasury bill
B. Credit spread
C. Floating-rate note
D. Zero-coupon bond
Correct Answer: B. Credit spread
Explanation: Credit spread is best understood as the yield difference between a credit instrument and a reference benchmark
reflecting, among other things, credit and liquidity considerations. This interpretation is consistent with the way the concept is
applied in professional securities and investment practice, including activity overseen by Australian Securities and Investments
Commission (ASIC) and applicable market rules. The other choices describe different concepts or would lead to a materially
different risk, trading, valuation, or compliance conclusion.
Page 4
