Financial Services Foundation Module (Intermediate) Practice Exam

Financial Services Foundation Module (Intermediate) Practice Exam

 

The aim of the Financial Services Foundation Module (Intermediate) is to provide students with a comprehensive overview of the financial industry, focusing particularly on career paths related to financial analysis. This course also helps to establish a solid groundwork for the CFA, recognized as the foremost global qualification in investment fields. 

IMS Proschool, a prominent provider of financial services education in India, offers the Financial Services Foundation Program. This program offers the following advantages:

• Prepares you for careers in sectors like Financial Analysis, Investment Banking, Equity Research, and Portfolio Management.
• Facilitates your initial progress towards obtaining the globally recognized qualification in Investments - CFA (US).
• Provides you with the necessary skills for roles in the Investment Industry or Financial KPOs.
• Additionally, it prepares you for the Claritas certification from the CFA Institute.

 

Who should take the exam?

This module is beneficial for:

• Undergraduates seeking to grasp fundamental financial concepts and explore careers in investment and finance.
• Recent graduates entering the finance sector or considering further education in finance/CFA.
• Professionals from non-finance backgrounds aiming to acquire foundational knowledge in finance to enhance their current roles or explore potential transitions into finance careers.
• Graduates in fields such as BE/BCA/BSC intending to pursue careers in the financial domain within IT companies.

 

Exam Details

• Exam Name: Financial Services Foundation Module (Intermediate)
• Exam Languages: English
• Exam Questions: 45 Questions
• Passing Score: 50%

 

Course Outline 

The Exam can cover the given topics  - 

Module 1: Financial Services Industry Overview

• Introduction to Financial Services
• Definition, scope, and significance in economic development
• Role of financial services in capital formation, liquidity, and risk transfer
• Structure of the Financial Services Sector
• Banking sector: commercial, cooperative, and regional rural banks
• Non-banking financial institutions (NBFCs)
• Insurance companies, pension funds, and mutual funds
• Key Participants
• Financial institutions, regulators, intermediaries, investors, and corporates
• Trends and Developments
• Impact of globalization, liberalization, and deregulation
• Emerging business models and integrated financial services
• Career opportunities in financial services

Module 2: Financial Markets and Instruments

• Overview of Financial Markets
• Capital markets, money markets, derivatives markets, and forex markets
• Role in liquidity, pricing, and resource allocation
• Primary Market
• IPOs, FPOs, rights issues, and private placements
• Merchant bankers, underwriters, and registrars’ roles
• Secondary Market
• Stock exchanges, OTC markets, and electronic trading
• Market indices (Nifty, Sensex, S&P 500)
• Trading mechanisms and settlement cycles
• Financial Instruments
• Equity, bonds, debentures, commercial papers, treasury bills
• Derivatives and Structured Products
• Futures, options, swaps, and securitized products

Module 3: Financial Risk Management

• Types of Financial Risks
• Market risk, credit risk, liquidity risk, operational risk, and systemic risk
• Risk Identification and Assessment
• Methods of measuring risk: VaR, stress testing, scenario analysis
• Risk Mitigation Techniques
• Hedging with derivatives
• Diversification, insurance, and credit risk management
• Regulatory and Compliance Aspects
• Capital adequacy norms (Basel III)
• Role of regulators in monitoring and controlling financial risks

Module 4: Investment Analysis

• Return and Risk
• Expected return, standard deviation, and risk-return trade-off
• Fundamental Analysis
• Financial statement analysis: balance sheet, income statement, cash flows
• Ratio analysis: liquidity, solvency, profitability, and efficiency ratios
• Technical Analysis
• Price patterns, trend lines, moving averages, and indicators
• Portfolio Management
• Asset allocation, diversification, Modern Portfolio Theory, CAPM
• Time Value of Money
• Present value, future value, discounting, compounding

Module 5: Financial Products and Services

• Banking Products
• Deposits, loans, credit cards, and payment services
• Insurance Products
• Life, health, property, liability, and reinsurance
• Mutual Funds and Alternative Investments
• Equity, debt, hybrid, ETFs, hedge funds, private equity, venture capital
• Pension and Retirement Plans
• Defined benefit vs defined contribution schemes
• Other Services
• Wealth management, brokerage, financial advisory services, and structured products
• Module 6: Financial Regulations
• Regulatory Framework
• RBI, SEBI, IRDAI, PFRDA, and Ministry of Finance roles
• Key Laws and Acts
• Banking Regulation Act, Companies Act, SEBI Act, Insurance Act, PMLA
• Corporate Governance
• Ethics, transparency, accountability, and compliance codes
• Investor Protection
• KYC, AML, risk disclosure, and grievance redressal mechanisms

Module 7: Financial Technology (FinTech)

• Introduction to FinTech
• Definition, evolution, and impact on financial services
• Digital Banking and Payments
• UPI, mobile wallets, NEFT, RTGS, IMPS, blockchain
• Robo-Advisors and WealthTech
• Automated investment advisory and portfolio management
• Regulatory Technology (RegTech)
• Compliance automation, fraud detection, and monitoring systems
• Emerging Trends
• Artificial Intelligence, machine learning, cryptocurrency, DeFi

Module 8: Mathematics of Finance

• Time Value of Money
• Present value, future value, annuities, perpetuities
• Discounted Cash Flow (DCF)
• NPV, IRR, and payback period calculations
• Bond and Stock Valuation
• Pricing, yield, and duration of bonds
• Dividend discount model for equities
• Risk and Return Computations
• Portfolio variance, standard deviation, beta, Sharpe ratio
• Capital Budgeting Techniques
• NPV, IRR, profitability index, and sensitivity analysis

Module 9: Practical Applications and Case Studies

• Stock Market Simulation and Analysis
• Investment Portfolio Planning Exercises
• Risk Management Case Studies
• Insurance Claims and Financial Planning Scenarios
• FinTech and Digital Finance Implementation Examples