GISI Securities Courses Ghana Exam Questions and Answers
Question 1. An investor buys a call with strike GH■75.00 for a premium of GH■3.00 per unit. Ignoring transaction
costs, what is the breakeven underlying price at expiration?
A. GH■78.00
B. GH■75.00
C. GH■3.00
D. GH■72.00
Correct Answer: A. GH■78.00
Explanation: A long call breaks even at expiration when intrinsic value exactly offsets the premium paid. Therefore the breakeven
is strike plus premium, or GH■75.00 + GH■3.00 = GH■78.00. Below this level the position has a net loss at expiration, while above
it the position has a net profit.
Question 2. A one-period project requires an initial outlay of GH■120,000.00 and is expected to pay
GH■160,000.00 one year later. At a discount rate of 5.0%, what is the NPV?
A. GH■40,000.00
B. GH■-32,380.95
C. GH■32,380.95
D. GH■48,000.00
Correct Answer: C. GH■32,380.95
Explanation: NPV equals the present value of future cash flows minus the initial outlay. Discounting GH■160,000.00 for one year
at 5.0% and subtracting GH■120,000.00 gives GH■32,380.95. The undiscounted difference ignores the time value of money and
therefore is not NPV.
Question 3. An employee learns confidentially that a listed issuer is about to announce a transaction likely to
move its share price materially. Before public release, the employee considers buying shares for a personal
account. What is the best action?
A. Trade only after discussing the information with one colleague inside the firm.
B. Trade a small amount because personal trades below a modest value are immaterial.
C. Tell a family member to trade because the employee would not be the account owner.
D. Do not trade or tip others, protect the information, and follow the firm's escalation and restricted-information procedures.
Correct Answer: D. Do not trade or tip others, protect the information, and follow the firm's escalation and
restricted-information procedures.
Explanation: Material non-public or inside information must not be used for personal trading or tipping. Firms operating under
Securities and Exchange Commission Ghana should maintain controls such as information barriers, restricted lists, surveillance,
and escalation procedures. Changing the account owner or trade size does not remove the core market-abuse concern.
Question 4. A company's share price is GH■50.00 and earnings per share are GH■5.00. What is the price-earnings
ratio?
A. 0.10 times
B. 45.00 times
C. 55.00 times
D. 10.00 times
Correct Answer: D. 10.00 times
Explanation: The price-earnings ratio equals market price per share divided by earnings per share. GH■50.00 divided by
GH■5.00 equals 10.00 times. The reciprocal would be an earnings-yield style measure, not the P/E ratio.
Page 1
,Question 5. Currency A is quoted at 0.9898 units of Currency B per A, and Currency B is quoted at 139.60 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 141.05 units of Currency C per Currency A
B. 0.0071 units of Currency C per Currency A
C. 138.17 units of Currency C per Currency A
D. 140.59 units of Currency C per Currency A
Correct Answer: C. 138.17 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.9898 B/A × 139.60 C/B
= 138.17 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 6. An investor buys a share for GH■100.00 and also buys a put with strike GH■85.00 for GH■2.00.
Ignoring costs and dividends, what is the maximum loss per share at expiration?
A. GH■17.00
B. GH■15.00
C. GH■83.00
D. GH■2.00
Correct Answer: A. GH■17.00
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: 100 + 2 - 85 = GH■17.00. The premium is part of the cost of protection and therefore increases the
maximum loss relative to stock price minus strike alone.
Question 7. A portfolio invests 35% in Asset A, which returns 14.0%, and the remainder in Asset B, which returns
-2.0%. What is the portfolio return?
A. 8.40%
B. 16.00%
C. 3.60%
D. 6.00%
Correct Answer: C. 3.60%
Explanation: A portfolio return is the weighted average of the component returns using portfolio weights. The calculation is (0.35 ×
14.0%) + (0.65 × -2.0%) = 3.60%. A simple average is appropriate only when the positions have equal weights.
Question 8. A company has current assets of 180 million and current liabilities of 60 million. What is its current
ratio?
A. 120.00
B. 4.00
C. 3.00
D. 0.33
Correct Answer: C. 3.00
Explanation: The current ratio equals current assets divided by current liabilities. = 3.00. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Question 9. A portfolio invests 40% in Asset A, which returns 10.0%, and the remainder in Asset B, which returns
9.0%. What is the portfolio return?
A. 9.50%
B. 9.40%
C. 9.60%
D. 1.00%
Correct Answer: B. 9.40%
Explanation: A portfolio return is the weighted average of the component returns using portfolio weights. The calculation is (0.40 ×
10.0%) + (0.60 × 9.0%) = 9.40%. A simple average is appropriate only when the positions have equal weights.
Page 2
,Question 10. A company reports net income of GH■60,000,000.00, preferred dividends of GH■2,000,000.00, and 15
million weighted-average common shares. What is basic EPS using these figures?
A. GH■0.25
B. GH■4.00
C. GH■3.87
D. GH■4.13
Correct Answer: C. GH■3.87
Explanation: Basic EPS allocates earnings available to common shareholders across the weighted-average common shares
outstanding. Subtracting preferred dividends leaves GH■58,000,000.00, and dividing by 15 million shares gives GH■3.87. Using
total net income without the preferred-dividend adjustment would overstate earnings attributable to common shares.
Question 11. An investor buys a call with strike GH■50.00 for a premium of GH■5.00 per unit. Ignoring transaction
costs, what is the breakeven underlying price at expiration?
A. GH■50.00
B. GH■5.00
C. GH■55.00
D. GH■45.00
Correct Answer: C. GH■55.00
Explanation: A long call breaks even at expiration when intrinsic value exactly offsets the premium paid. Therefore the breakeven
is strike plus premium, or GH■50.00 + GH■5.00 = GH■55.00. Below this level the position has a net loss at expiration, while above
it the position has a net profit.
Question 12. Currency A is quoted at 0.8172 units of Currency B per A, and Currency B is quoted at 92.15 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 75.30 units of Currency C per Currency A
B. 0.0089 units of Currency C per Currency A
C. 92.97 units of Currency C per Currency A
D. 112.77 units of Currency C per Currency A
Correct Answer: A. 75.30 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.8172 B/A × 92.15 C/B
= 75.30 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 13. A GH■10,000.00 face-value bond pays a 4.5% annual coupon in 4 equal payment(s) per year. What is
each coupon payment?
A. GH■2,500.00
B. GH■112.50
C. GH■225.00
D. GH■450.00
Correct Answer: B. GH■112.50
Explanation: Annual coupon interest is face value multiplied by the annual coupon rate, which equals GH■450.00. Dividing that
amount by 4 payment period(s) gives GH■112.50 per payment. The bond's market price is irrelevant to the contractual coupon
cash flow unless the question specifically asks for a yield measure.
Page 3
, Question 14. A company earns net income of 12 million and has average common equity of 60 million. What is
return on equity?
A. 20.00%
B. 12.00%
C. 5.00%
D. 80.00%
Correct Answer: A. 20.00%
Explanation: Return on equity compares earnings available to common equity with the equity capital supporting those earnings.
Using the stated figures, × 100 = 20.00%. The measure should not be inverted because equity divided by income answers a
different question.
Question 15. An investor buys a security for GH■80.00, receives GH■3.00 in cash distributions, and later sells it
for GH■60.00. What is the holding-period return?
A. -16.25%
B. -21.25%
C. -25.00%
D. -26.25%
Correct Answer: B. -21.25%
Explanation: Holding-period return equals price change plus cash income, divided by the initial price: (60 - 80 + 3) / 80. That
calculation gives -21.25%, assuming no taxes, fees, or other cash flows. Using only the price change would omit the distribution and
therefore would not measure the complete holding-period return.
Question 16. A new client provides inconsistent ownership information, resists explaining the source of funds,
and requests rapid transfers through several unrelated accounts. What is the best compliance response?
A. Close the account immediately in every case without following internal escalation or legal requirements.
B. Complete the transfers first and perform customer due diligence only if a regulator later asks.
C. Ignore the inconsistencies if the client is willing to pay higher fees.
D. Apply risk-based enhanced review, verify relevant ownership and source information, and escalate for suspicious-activity
assessment under applicable procedures.
Correct Answer: D. Apply risk-based enhanced review, verify relevant ownership and source information, and escalate
for suspicious-activity assessment under applicable procedures.
Explanation: The combination of opaque ownership, unexplained funds, and unusual movement of money is a meaningful
financial-crime red flag. A firm subject to Securities and Exchange Commission Ghana should follow risk-based customer due
diligence, escalation, and any applicable suspicious-transaction reporting requirements. Neither fee income nor a desire for speed
should displace required AML controls, and account closure decisions should follow the governing process.
Question 17. A company's share price is GH■60.00 and earnings per share are GH■5.00. What is the
price-earnings ratio?
A. 55.00 times
B. 12.00 times
C. 0.08 times
D. 65.00 times
Correct Answer: B. 12.00 times
Explanation: The price-earnings ratio equals market price per share divided by earnings per share. GH■60.00 divided by
GH■5.00 equals 12.00 times. The reciprocal would be an earnings-yield style measure, not the P/E ratio.
Page 4
Question 1. An investor buys a call with strike GH■75.00 for a premium of GH■3.00 per unit. Ignoring transaction
costs, what is the breakeven underlying price at expiration?
A. GH■78.00
B. GH■75.00
C. GH■3.00
D. GH■72.00
Correct Answer: A. GH■78.00
Explanation: A long call breaks even at expiration when intrinsic value exactly offsets the premium paid. Therefore the breakeven
is strike plus premium, or GH■75.00 + GH■3.00 = GH■78.00. Below this level the position has a net loss at expiration, while above
it the position has a net profit.
Question 2. A one-period project requires an initial outlay of GH■120,000.00 and is expected to pay
GH■160,000.00 one year later. At a discount rate of 5.0%, what is the NPV?
A. GH■40,000.00
B. GH■-32,380.95
C. GH■32,380.95
D. GH■48,000.00
Correct Answer: C. GH■32,380.95
Explanation: NPV equals the present value of future cash flows minus the initial outlay. Discounting GH■160,000.00 for one year
at 5.0% and subtracting GH■120,000.00 gives GH■32,380.95. The undiscounted difference ignores the time value of money and
therefore is not NPV.
Question 3. An employee learns confidentially that a listed issuer is about to announce a transaction likely to
move its share price materially. Before public release, the employee considers buying shares for a personal
account. What is the best action?
A. Trade only after discussing the information with one colleague inside the firm.
B. Trade a small amount because personal trades below a modest value are immaterial.
C. Tell a family member to trade because the employee would not be the account owner.
D. Do not trade or tip others, protect the information, and follow the firm's escalation and restricted-information procedures.
Correct Answer: D. Do not trade or tip others, protect the information, and follow the firm's escalation and
restricted-information procedures.
Explanation: Material non-public or inside information must not be used for personal trading or tipping. Firms operating under
Securities and Exchange Commission Ghana should maintain controls such as information barriers, restricted lists, surveillance,
and escalation procedures. Changing the account owner or trade size does not remove the core market-abuse concern.
Question 4. A company's share price is GH■50.00 and earnings per share are GH■5.00. What is the price-earnings
ratio?
A. 0.10 times
B. 45.00 times
C. 55.00 times
D. 10.00 times
Correct Answer: D. 10.00 times
Explanation: The price-earnings ratio equals market price per share divided by earnings per share. GH■50.00 divided by
GH■5.00 equals 10.00 times. The reciprocal would be an earnings-yield style measure, not the P/E ratio.
Page 1
,Question 5. Currency A is quoted at 0.9898 units of Currency B per A, and Currency B is quoted at 139.60 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 141.05 units of Currency C per Currency A
B. 0.0071 units of Currency C per Currency A
C. 138.17 units of Currency C per Currency A
D. 140.59 units of Currency C per Currency A
Correct Answer: C. 138.17 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.9898 B/A × 139.60 C/B
= 138.17 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 6. An investor buys a share for GH■100.00 and also buys a put with strike GH■85.00 for GH■2.00.
Ignoring costs and dividends, what is the maximum loss per share at expiration?
A. GH■17.00
B. GH■15.00
C. GH■83.00
D. GH■2.00
Correct Answer: A. GH■17.00
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: 100 + 2 - 85 = GH■17.00. The premium is part of the cost of protection and therefore increases the
maximum loss relative to stock price minus strike alone.
Question 7. A portfolio invests 35% in Asset A, which returns 14.0%, and the remainder in Asset B, which returns
-2.0%. What is the portfolio return?
A. 8.40%
B. 16.00%
C. 3.60%
D. 6.00%
Correct Answer: C. 3.60%
Explanation: A portfolio return is the weighted average of the component returns using portfolio weights. The calculation is (0.35 ×
14.0%) + (0.65 × -2.0%) = 3.60%. A simple average is appropriate only when the positions have equal weights.
Question 8. A company has current assets of 180 million and current liabilities of 60 million. What is its current
ratio?
A. 120.00
B. 4.00
C. 3.00
D. 0.33
Correct Answer: C. 3.00
Explanation: The current ratio equals current assets divided by current liabilities. = 3.00. Subtracting the two amounts
produces working capital, which is a different liquidity measure.
Question 9. A portfolio invests 40% in Asset A, which returns 10.0%, and the remainder in Asset B, which returns
9.0%. What is the portfolio return?
A. 9.50%
B. 9.40%
C. 9.60%
D. 1.00%
Correct Answer: B. 9.40%
Explanation: A portfolio return is the weighted average of the component returns using portfolio weights. The calculation is (0.40 ×
10.0%) + (0.60 × 9.0%) = 9.40%. A simple average is appropriate only when the positions have equal weights.
Page 2
,Question 10. A company reports net income of GH■60,000,000.00, preferred dividends of GH■2,000,000.00, and 15
million weighted-average common shares. What is basic EPS using these figures?
A. GH■0.25
B. GH■4.00
C. GH■3.87
D. GH■4.13
Correct Answer: C. GH■3.87
Explanation: Basic EPS allocates earnings available to common shareholders across the weighted-average common shares
outstanding. Subtracting preferred dividends leaves GH■58,000,000.00, and dividing by 15 million shares gives GH■3.87. Using
total net income without the preferred-dividend adjustment would overstate earnings attributable to common shares.
Question 11. An investor buys a call with strike GH■50.00 for a premium of GH■5.00 per unit. Ignoring transaction
costs, what is the breakeven underlying price at expiration?
A. GH■50.00
B. GH■5.00
C. GH■55.00
D. GH■45.00
Correct Answer: C. GH■55.00
Explanation: A long call breaks even at expiration when intrinsic value exactly offsets the premium paid. Therefore the breakeven
is strike plus premium, or GH■50.00 + GH■5.00 = GH■55.00. Below this level the position has a net loss at expiration, while above
it the position has a net profit.
Question 12. Currency A is quoted at 0.8172 units of Currency B per A, and Currency B is quoted at 92.15 units of
Currency C per B. What is the implied Currency C per Currency A cross rate?
A. 75.30 units of Currency C per Currency A
B. 0.0089 units of Currency C per Currency A
C. 92.97 units of Currency C per Currency A
D. 112.77 units of Currency C per Currency A
Correct Answer: A. 75.30 units of Currency C per Currency A
Explanation: When the quotation units align, multiply the two exchange rates so that Currency B cancels. 0.8172 B/A × 92.15 C/B
= 75.30 C/A. Dividing instead of multiplying would leave the unit conversion inconsistent with the requested quotation.
Question 13. A GH■10,000.00 face-value bond pays a 4.5% annual coupon in 4 equal payment(s) per year. What is
each coupon payment?
A. GH■2,500.00
B. GH■112.50
C. GH■225.00
D. GH■450.00
Correct Answer: B. GH■112.50
Explanation: Annual coupon interest is face value multiplied by the annual coupon rate, which equals GH■450.00. Dividing that
amount by 4 payment period(s) gives GH■112.50 per payment. The bond's market price is irrelevant to the contractual coupon
cash flow unless the question specifically asks for a yield measure.
Page 3
, Question 14. A company earns net income of 12 million and has average common equity of 60 million. What is
return on equity?
A. 20.00%
B. 12.00%
C. 5.00%
D. 80.00%
Correct Answer: A. 20.00%
Explanation: Return on equity compares earnings available to common equity with the equity capital supporting those earnings.
Using the stated figures, × 100 = 20.00%. The measure should not be inverted because equity divided by income answers a
different question.
Question 15. An investor buys a security for GH■80.00, receives GH■3.00 in cash distributions, and later sells it
for GH■60.00. What is the holding-period return?
A. -16.25%
B. -21.25%
C. -25.00%
D. -26.25%
Correct Answer: B. -21.25%
Explanation: Holding-period return equals price change plus cash income, divided by the initial price: (60 - 80 + 3) / 80. That
calculation gives -21.25%, assuming no taxes, fees, or other cash flows. Using only the price change would omit the distribution and
therefore would not measure the complete holding-period return.
Question 16. A new client provides inconsistent ownership information, resists explaining the source of funds,
and requests rapid transfers through several unrelated accounts. What is the best compliance response?
A. Close the account immediately in every case without following internal escalation or legal requirements.
B. Complete the transfers first and perform customer due diligence only if a regulator later asks.
C. Ignore the inconsistencies if the client is willing to pay higher fees.
D. Apply risk-based enhanced review, verify relevant ownership and source information, and escalate for suspicious-activity
assessment under applicable procedures.
Correct Answer: D. Apply risk-based enhanced review, verify relevant ownership and source information, and escalate
for suspicious-activity assessment under applicable procedures.
Explanation: The combination of opaque ownership, unexplained funds, and unusual movement of money is a meaningful
financial-crime red flag. A firm subject to Securities and Exchange Commission Ghana should follow risk-based customer due
diligence, escalation, and any applicable suspicious-transaction reporting requirements. Neither fee income nor a desire for speed
should displace required AML controls, and account closure decisions should follow the governing process.
Question 17. A company's share price is GH■60.00 and earnings per share are GH■5.00. What is the
price-earnings ratio?
A. 55.00 times
B. 12.00 times
C. 0.08 times
D. 65.00 times
Correct Answer: B. 12.00 times
Explanation: The price-earnings ratio equals market price per share divided by earnings per share. GH■60.00 divided by
GH■5.00 equals 12.00 times. The reciprocal would be an earnings-yield style measure, not the P/E ratio.
Page 4
