7/1/25, 12:07 AM CISI: Securities Exam
CISI Securities Exam includes accurate and verified questions
covering core topics such as equity and debt instruments,
derivatives, financial markets, settlement and clearing, portfolio
management, and risk. Designed for candidates pursuing the CISI
- Cumulative preference shares: Accumulate unpaid
dividends and pay them out in future years.
- Participating preference shares: Receive a fixed
dividend and also share in the company's profits
What are the different types with ordinary shareholders.
of preference shares?(2) - Redeemable preference shares: Enable the company
to buy back the shares from the shareholder at an
agreed price in the future.
- Convertible preference shares: Allow the
shareholder to convert the preference shares into a
predetermined number of ordinary shares.
- Zero coupon preference shares: Pay no dividend,
but offer an upside to the shareholder in that they
redeem at a price above that at which they are
issued.
How do you calculate flat Flat yield = (annual coupon/price) x 100
yield?(2)
NRY (net redemption yield) accounts for all expenses,
What is the difference such as taxes and fees, in addition to interest payments
between NRY and GRY?(2) and capital gain/loss at redemption. GRY (gross
redemption yield) only accounts for interest payments
and capital gain/loss at redemption, but not expenses
or taxes.
What is the formula for Conversion premium = (Market price of convertible bond -
conversion premium?(2) Conversion price) ÷
Conversion price x 100
What's the formula for PV = C / (1+r)^1 + C / (1+r)^2 + (C+FV) / (1+r)^1
present value of a bond?(2)
/ 1/1
3
, 7/1/25, 12:07 AM CISI: Securities Exam
Modified duration is a measure of the sensitivity of a
bond's price to changes in interest rates. It is calculated
as the percentage change in a bond's price for a 1%
change in interest rates, adjusted for the bond's
What is Modified Duration? (2)
remaining time to maturity and coupon payments.
- Time to maturity: Longer maturity bonds have higher
modified duration than shorter maturity bonds, as they
have more exposure to changes in interest rates.
- Coupon rate: Lower coupon rate bonds have higher
modified duration than higher coupon rate bonds, as
they are more sensitive to changes in interest rates.
Type of bond that allows the issuer to pay interest in
What are PIK notes?(2)
the form of additional securities rather than cash, and
are typically subordinated to other debt.
Convertible bonds allow the bondholders to convert
What is the difference
their bonds into shares of the issuing company's stock,
between exchangeable and
while exchangeable bonds allow conversion into shares
convertible bonds?(2)
of a different company's stock.
Type of bond in which the coupon rate changes
What is a stepped bond? (2)
over time, usually increasing at certain pre-
determined intervals
Commercial paper is a type of short-term unsecured
What is commercial paper?(2) promissory note issued by corporations, banks, and
other financial institutions to raise funds for their short-
term cash needs.
Warrants are issued by the company while covered
What are the differences warrants are issued by banks. Warrants have greater
between warrants and risk, while covered warrants have some degree of
covered warrants?(2) protection. Covered warrants can be exercised at any
time, while warrants have a specific exercise period.
What are the two main T-bills (issued by govs) and Commercial paper (issued by
money market instruments? companies)
(2)
Whats the formula for dirty Clean Price + Accrued Interest
price? (2)
What are Eurobonds cleared Clearstream or Euroclear
through? (2)
/ 2/1
3
CISI Securities Exam includes accurate and verified questions
covering core topics such as equity and debt instruments,
derivatives, financial markets, settlement and clearing, portfolio
management, and risk. Designed for candidates pursuing the CISI
- Cumulative preference shares: Accumulate unpaid
dividends and pay them out in future years.
- Participating preference shares: Receive a fixed
dividend and also share in the company's profits
What are the different types with ordinary shareholders.
of preference shares?(2) - Redeemable preference shares: Enable the company
to buy back the shares from the shareholder at an
agreed price in the future.
- Convertible preference shares: Allow the
shareholder to convert the preference shares into a
predetermined number of ordinary shares.
- Zero coupon preference shares: Pay no dividend,
but offer an upside to the shareholder in that they
redeem at a price above that at which they are
issued.
How do you calculate flat Flat yield = (annual coupon/price) x 100
yield?(2)
NRY (net redemption yield) accounts for all expenses,
What is the difference such as taxes and fees, in addition to interest payments
between NRY and GRY?(2) and capital gain/loss at redemption. GRY (gross
redemption yield) only accounts for interest payments
and capital gain/loss at redemption, but not expenses
or taxes.
What is the formula for Conversion premium = (Market price of convertible bond -
conversion premium?(2) Conversion price) ÷
Conversion price x 100
What's the formula for PV = C / (1+r)^1 + C / (1+r)^2 + (C+FV) / (1+r)^1
present value of a bond?(2)
/ 1/1
3
, 7/1/25, 12:07 AM CISI: Securities Exam
Modified duration is a measure of the sensitivity of a
bond's price to changes in interest rates. It is calculated
as the percentage change in a bond's price for a 1%
change in interest rates, adjusted for the bond's
What is Modified Duration? (2)
remaining time to maturity and coupon payments.
- Time to maturity: Longer maturity bonds have higher
modified duration than shorter maturity bonds, as they
have more exposure to changes in interest rates.
- Coupon rate: Lower coupon rate bonds have higher
modified duration than higher coupon rate bonds, as
they are more sensitive to changes in interest rates.
Type of bond that allows the issuer to pay interest in
What are PIK notes?(2)
the form of additional securities rather than cash, and
are typically subordinated to other debt.
Convertible bonds allow the bondholders to convert
What is the difference
their bonds into shares of the issuing company's stock,
between exchangeable and
while exchangeable bonds allow conversion into shares
convertible bonds?(2)
of a different company's stock.
Type of bond in which the coupon rate changes
What is a stepped bond? (2)
over time, usually increasing at certain pre-
determined intervals
Commercial paper is a type of short-term unsecured
What is commercial paper?(2) promissory note issued by corporations, banks, and
other financial institutions to raise funds for their short-
term cash needs.
Warrants are issued by the company while covered
What are the differences warrants are issued by banks. Warrants have greater
between warrants and risk, while covered warrants have some degree of
covered warrants?(2) protection. Covered warrants can be exercised at any
time, while warrants have a specific exercise period.
What are the two main T-bills (issued by govs) and Commercial paper (issued by
money market instruments? companies)
(2)
Whats the formula for dirty Clean Price + Accrued Interest
price? (2)
What are Eurobonds cleared Clearstream or Euroclear
through? (2)
/ 2/1
3
