CISI Financial Markets study plan
CISI Financial Markets · Give each week a clear focus.
8 weeks · About 7 hours per week
Financial Markets Environment
Map the structure of the financial system: distinguish money markets from capital markets and list the main participants in each
Explain the role and functions of central banks and how interest rate decisions transmit through an economy
Define primary and secondary markets and describe how a company brings a new issue to market
Summarise the main asset classes and their risk/return characteristics in your own words
Your checkpoint
A one-page labelled diagram of the financial system (markets, participants, regulators, flows) with a 200-word written explanation of how a bond issuer reaches an investor
Financial Markets Environment
Describe the main types of financial intermediary and match each to the client need it serves
Explain how monetary policy tools (rates, reserves, open market operations) affect market prices
Identify the key economic indicators released regularly and state which markets each most affects
Distinguish systematic from unsystematic risk and give two examples of each
Your checkpoint
A 15-row comparison table of intermediaries (bank, insurer, fund manager, broker, exchange) showing function, typical client and main risk carried
Securities and Investments
Classify equity instruments by type (ordinary, preference) and state the rights attaching to each
Calculate dividend yield, earnings per share and price/earnings from supplied figures
Explain how a bond's price responds to a change in yield and describe the relationship between coupon, yield and price
Distinguish money market instruments from longer-dated debt by maturity and issuer
Your checkpoint
A worked calculation sheet with 10 self-set numerical problems on yield, EPS, P/E and bond pricing, each with your own solution shown
Securities and Investments
Describe the main collective investment vehicles and contrast open-ended with closed-ended structures
Explain the purpose and mechanics of a stock exchange listing and settlement process
Summarise the main investor protections in the retail distribution chain (advice vs execution-only)
Build a revision sheet linking each security type to its issuer, risk profile and typical investor
Your checkpoint
A two-page 'securities at a glance' revision sheet covering equities, government and corporate bonds, money market instruments and funds, self-tested by recall without notes
Derivatives
Distinguish forwards, futures, options and swaps by obligation, standardisation and counterparty risk
Explain the mechanics of margin and marking to market in a futures contract
Calculate the payoff and profit at expiry for a simple call and put given strike and premium
State the main uses of derivatives: hedging, speculation and arbitrage, with one example each
Your checkpoint
A payoff diagram set (long/short call and put) drawn from first principles with the break-even and maximum loss/gain labelled for each
Derivatives & Foreign Exchange
Explain how an investor uses an interest rate future or swap to hedge a rate exposure
Define spot, forward and cross rates and describe what drives the forward rate
Calculate a forward exchange rate from spot and interest rate differentials (interest rate parity)
Explain the role of exchange-traded versus OTC derivatives in managing currency risk
Your checkpoint
A single worked case study: a UK exporter hedging a USD receivable using a forward contract, showing the rate calculation, the outcome versus an unhedged position, and the residual risks
Foreign Exchange & Regulation and Ethics
Distinguish real and nominal exchange rates and explain purchasing power parity in plain terms
Describe how central bank intervention and interest rate differentials move a currency
Outline the core regulatory objectives (market integrity, client protection, financial stability) and name the bodies that pursue them
Apply the concepts of insider dealing, market abuse and conflicts of interest to short scenarios
Your checkpoint
Five short scenario answers (100 words each) on FX and conduct issues, each identifying the rule or principle engaged and the correct course of action
Financial Markets Environment & Securities and Investments & Derivatives & Foreign Exchange & Regulation and Ethics
Recall-test each domain using spaced repetition and log every weak area
Re-derive the key formulas (yield, P/E, option payoff, forward FX) from memory without prompts
Work through a full-length timed mock under exam conditions and review every wrong answer
Convert each weak area into a one-line corrective note and re-test it 48 hours later
Your checkpoint
A completed timed mock with a scored breakdown by domain and a one-page list of remaining weak points with corrective notes
Milestones
Week 2: Can explain, without notes, how a central bank rate change flows through money markets to bond and equity prices, and score at least 70% on a self-made 20-question Domain 1 recall test
Week 4: Can reproduce the 'securities at a glance' sheet from memory and correctly solve 8 of 10 calculation problems on yields, EPS and bond pricing
Week 6: Can draw call and put payoff diagrams from scratch and correctly calculate a forward FX rate from spot and interest differentials in under 10 minutes
Week 8: Achieve at least 75% overall on the timed mock with no single domain below 65%, and clear every logged weak point on re-test