Bulgarian Investment Consultant Exam study guide
Bulgarian Investment Consultant Exam · Work through your exam, one topic at a time.
The Bulgarian Investment Consultant Exam is a professional certification designed for people who advise clients on securities, funds and portfolio strategy in the Bulgarian market, or who want to demonstrate that level of technical knowledge to employers and clients. Candidates typically come from brokerage, asset management, private banking, compliance and financial advisory roles, and many sit it to formalise knowledge they already use daily. The Bulgarian Investment Consultant Exam study guide has 10 sections and about 3,633 words.
01Regulatory Framework and Market Supervision
Bulgaria's investment services regulatory framework is anchored in the Markets in Financial Instruments Directive (MiFID II), transposed into the Markets in Financial Instruments Act (MFIA). The Financial Supervision Commission (FSC) is the primary regulator for investment firms, while the Bulgarian National Bank (BNB) supervises banks and payment institutions.
367 words, about 2 min02Financial Instruments and Markets
Financial instruments under MiFID II include transferable securities (shares, bonds), money market instruments, units in collective investment schemes (CIS), derivatives (options, futures, swaps, forwards), and emission allowances. Candidates must understand the characteristics of each: equities confer ownership and voting rights; bonds are debt instruments with coupon and principal; derivatives derive value from underlying assets and can be exchange-traded or OTC.
378 words, about 2 min03Investment Products and Their Characteristics
Candidates must understand a wide range of investment products: shares, bonds (government, corporate, convertible), money market instruments (T-bills, commercial paper), collective investment schemes (UCITS, non-UCITS, ETFs), derivatives (options, futures, swaps, CFDs), and structured products (capital-protected notes, reverse convertibles). Key characteristics: risk/return profile, liquidity, maturity, issuer credit risk, and tax treatment.
319 words, about 2 min04Portfolio Theory and Asset Allocation
Modern Portfolio Theory (MPT) is central: diversification reduces unsystematic risk; the efficient frontier represents optimal risk-return combinations; the Capital Asset Pricing Model (CAPM) links expected return to systematic risk (beta). Candidates must understand asset allocation strategies (strategic vs tactical), correlation, and the impact of risk tolerance and investment horizon.
345 words, about 2 min05Valuation of Financial Instruments
Valuation covers equities, bonds, derivatives, and other instruments. For bonds, candidates must understand discounted cash flow (DCF), yield to maturity (YTM), duration (Macaulay and modified), convexity, and the relationship between price and yield.
317 words, about 2 min06Risk Management and Risk Measurement
Risk management involves identifying, measuring, and mitigating risks: market risk (equity, interest rate, currency, commodity), credit risk, liquidity risk, operational risk, and systemic risk. Candidates must understand risk measurement tools: Value at Risk (VaR), stress testing, scenario analysis, and Greek letters for options (delta, gamma, vega, theta, rho).
330 words, about 2 min07Investor Protection
Investor protection rules aim to ensure fair treatment, transparency, and redress. Key concepts: client categorisation (retail, professional, eligible counterparty), best execution, product governance (target market, PRIIPs KID), complaints handling, and the Investor Compensation Fund.
316 words, about 2 min08Suitability and Conduct of Business
Suitability and conduct rules ensure firms act honestly, fairly, and professionally. Key concepts: know-your-client (KYC), suitability assessment (knowledge, experience, financial situation, investment objectives), appropriateness (for non-advised services), and the distinction between execution-only and advised services.
299 words, about 1 min09Anti-Money Laundering and Compliance
AML/CTF compliance is governed by the Bulgarian Anti-Money Laundering Act (AMLA) and EU directives (AMLD). Key concepts: customer due diligence (CDD), enhanced due diligence (EDD) for high-risk customers (PEPs, correspondent relationships), simplified due diligence (SDD) for low-risk, suspicious activity reports (SARs) to the Financial Intelligence Directorate (FID), and record-keeping (5 years).
318 words, about 2 min10Taxation of Investment Income
Taxation of investment income in Bulgaria includes rules on capital gains, dividends, interest, and rental income. Key concepts: flat tax rate (10% for corporate and personal income), withholding tax on dividends (5%), and the exemption for capital gains on shares traded on a regulated market (if certain conditions met).
644 words, about 3 min