Financial Securities Practice Exam

Financial Securities

About Financial Securities

In both public and private markets, securities are fungible, tradeable financial instruments used to raise cash. The phrase can be used to refer to any kind of financial instrument, however different jurisdictions have different legal definitions for it. The three main categories of securities are:

• Equity, which gives investors ownership rights
• Debt, which is effectively a loan returned with recurring payments
• Hybrids include features of both debt and equity.

Financial securities management has gained immense popularity across the globe resulting in huge demand for certified professionals.

Who should take the Financial Securities Exam?

• Finance and Investment managers, senior executives, executives
• Students
• Teachers
• Professionals in the securities markets.
• Professionals in other industries interested in aiming knowledge of the securities.

Skills Required

• Investment Fundamentals
• Types of Financial Securities
• Financial Mathematics & Valuation
• Market Operations & Trading
• Regulations & Ethics
• Risk Management & Performance Analysis

Financial Securities Certification Course Outline

Module 1: Introduction to Financial Securities

• Definition and characteristics of financial securities
• Role of securities in capital markets
• Primary vs. secondary markets
• Overview of investment products

Module 2: Equity Securities

• Common vs. preferred stock
• Rights of shareholders
• Stock market indices (S&P 500, NASDAQ, Dow)
• Stock valuation techniques (P/E ratio, DCF, Gordon Growth Model)

Module 3: Debt Securities (Fixed Income)

• Types of bonds: government, municipal, corporate
• Bond features: coupon, maturity, callability
• Bond pricing and yield calculations
• Duration, convexity, and interest rate sensitivity

Module 4: Derivatives & Structured Products

• Overview of derivatives: options, futures, swaps
• Using derivatives for hedging and speculation
• Option strategies (covered calls, spreads, straddles)
• Basics of structured products (e.g., convertible bonds)

Module 5: Mutual Funds & ETFs

• Open-end vs. closed-end funds
• Passive vs. active management
• NAV, expense ratio, and tracking error
• Fund selection and comparison

Module 6: Financial Market Structure & Participants

• Role of stock exchanges and over-the-counter (OTC) markets
• Trade settlement and clearing processes
• Market makers, institutional investors, and retail investors
• Types of investment accounts (margin, cash, retirement)

Module 7: Portfolio Management & Analysis

• Portfolio theory (Modern Portfolio Theory, CAPM)
• Asset allocation and diversification strategies
• Portfolio rebalancing and risk-adjusted returns
• Benchmarking and performance metrics (Sharpe, Treynor, Jensen)

Module 8: Investment Risk & Return

• Systematic vs. unsystematic risk
• Volatility, beta, and correlation
• Value at Risk (VaR) and scenario analysis
• Hedging with derivatives and asset allocation

Module 9: Securities Regulation & Ethical Practices

• Overview of key regulatory bodies: SEC, FINRA, FCA
• Insider trading laws, anti-money laundering (AML)
• Disclosure, suitability, and fiduciary duty
• Ethical investment standards (e.g., CFA Institute Code of Ethics)

Module 10: Practice Exam & Case Study

• Section A: Multiple-choice questions on securities concepts
• Section B: Bond and stock valuation problems
• Section C: Case study analysis: Building and evaluating a portfolio
• Section D: Regulatory and ethics scenario-based questions

Exam Format and Information

• Certification name – Certificate in Financial Securities
• Exam duration – 60 minutes
• Exam type - Multiple Choice Questions
• Eligibility / pre-requisite - None
• Exam language - English
• Exam format - Online
• Passing score - 25
• Exam Fees  - INR 1199