CISI Financial Markets case studies
CISI Financial Markets · Put your knowledge to work in context.
The CISI Financial Markets qualification is one of the professional qualifications offered by the Chartered Institute for Securities & Investment (CISI), a professional body whose site describes a membership of over 54,000 members worldwide and lists qualifications, CPD, events and learning resources alongside membership services. This profile treats the exam as a multiple-choice assessment split into five equally weighted areas: the financial markets environment, securities and investments, derivatives, foreign exchange, and regulation and ethics. The CISI Financial Markets case studies are 5 cases and about 3,188 words.
1The Bond That Doesn't Add Up
A private client holds £250,000 nominal of a 4.5% UK gilt with exactly 6 years to maturity, currently priced at £98.50 per £100 nominal (clean). The client's adviser quotes a gross redemption yield of 4.9% and tells the client the bond is 'cheap versus the 4.75% coupon gilt maturing in 2031, which trades at £101.' The client asks you to sanity-check the yield, because she believes the yield should be closer to the running yield she has seen quoted elsewhere (4.57%).
616 words, about 3 min2Hedging a Sterling Receivable with a Forward
A UK exporter will receive USD 2,000,000 in 90 days for goods shipped to a US customer. Spot GBP/USD is 1.2650.
619 words, about 3 min3The Suspicious Order Flow
You are a compliance officer at a UK investment firm. A junior dealer reports that a client, an offshore company, has placed a series of buy orders in a small-cap AIM stock over three days totalling £1.8m - unusually large for this client, whose prior activity was £50k–£100k trades.
635 words, about 3 min4Duration and the Rate Shock
A pension fund holds a £40m portfolio split 60% in a 10-year gilt (modified duration 8.2) and 40% in a 2-year gilt (modified duration 1.9). The fund's liabilities have a present value of £38m and a duration of 7.5 years.
605 words, about 3 min5The Emerging Market Bond Fund Redemption
A UK-domiciled open-ended investment company (OEIC) invests in emerging-market local-currency government bonds. Over two weeks, redenomination fears in one country (which represents 12% of the fund) cause a 9% fall in that holding's value.
713 words, about 4 min