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CISI Fundamentals of Financial Services Exam Questions and Answers
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CISI Fundamentals of Financial ServicesExam Questions and Answers
Acquisition - Answer -A term used to describe the takeover or buying of a company by
another
Asset - Answer -Any item of economic or financial value owned by someone or a
company
Bank of England - Answer -The UK's central bank. Implements economic policy decided
by the Treasury and determines interest rates.
Bankruptcy - Answer -The situation where an individual, company or other organisation
is unable to pay its debts.
Bonds - Answer -Interest-bearing securities which entitle holders to annual interest and
repayment by both companies and governments.
Bitcoin - Answer -the most popular and fastest-growing digital currency.
Blockchain - Answer -A type of distributed ledger technology consisting of data structure
blocks that may contain data or programs, with each block holding batches of individual
transactions and the results of any executables. Each block contains a time stamp and
a link to a previous block.
Capital - Answer -Cash and assets used to generate income or make an investment.
Capital gain - Answer -An increase in the market value of a security.
Central bank - Answer -Central banks typically have responsibility for setting a nation's
or region's short-term interest rate, controlling the money supply, acting as a banker and
lender of last resort to the banking system and managing the national debt.
Closing price - Answer -the price of a security at the end of the day's business in a
financial market..
Collective Investment Scheme (CIS) - Answer -A fund run by a professional manager
that enables investors to pool their money. The manager selects the investments and
the investors share in any increase (or decrease) in their value.
Commission - Answer -Charges for acting as agent or broker.
, Coupon - Answer -the stated interest payment made on a bond
Credit rating - Answer -An assessment of a bond issuers ability to pay the interest and
repay the capital on the bonds. The best rating is triple A.
Credit risk - Answer -the probability that the borrower will fail to pay some of the interest
or principal
Currency - Answer -Any form of money being used as a medium of exchange
Cryptocurrency - Answer -Virtual or electric currencies which use encryption technology
to control the amount of currency issued as well as to record ownership.
DAX - Answer -German shares index, comprising the largest companies (30
companies)
Dealer - Answer -Individual or firm acting in order to buy or sell a security for its own
account and risk
Default - Answer -the situation where a borrower has failed to meet the requirements of
their borrowing, e.g. by failing to pay the interest due.
Deposit - Answer -a sum of money held at a financial institution on behalf of an account
holder for safekeeping.
Derivative - Answer -A financial instrument whose price is based on the price of
something else, typically another underlying asset. The underlying asset could be a
financial instrument e.g. a bond or a share, or a commodity such as oil, gold, silver, corn
or wheat.
Diversification - Answer -Investment strategy of spreading risk by investing in a range of
investments.
Distributed Ledger Technology (DLT) - Answer -The replacement of one centralised
ledger of transactions with a decentralised network of computers all holding copies of
exactly the same ledger (i.e. the technology that controls bitcoin)
Dividend - Answer -distribution of profits by a company to shareholders
Dividend yield - Answer -The most recent dividend expressed as a percentage of
current share price
Dow Jones Industrial Average Index (DJIA) - Answer -Major share index in the USA,
based on the prices of 30 major company shares.
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