Derivatives Level 3 (Capital Markets Programme) – Quiz 02

Last Updated: June 2024

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CISI – Derivatives Level 3 (Capital Markets Programme) Quiz 02 is completed –
understand the relationship between return and maturity shown by yield curves: • normal yield curves • inverted yield curves • flat yield curves
know the main features of the corporate bond market
understand the relationship between government and corporate bonds: • yield spread over governments • high grade and high yield bonds • bond ratings, transition and default

Equity Markets:
know the principal features and characteristics of ordinary shares and non-voting shares: • ranking in a liquidation, for dividends • voting rights • partly paid shares and calls
understand the differences and principal characteristics of the following classes of preference shares: cumulative, participating, redeemable, convertible
understand the basic principles of equity valuation
understand the effect of corporate actions: • rights issues • bonus issues • stock splits • mergers and acquisitions • share buybacks

know the main softs and agriculturals and the influences on price: • coffee, cocoa, white sugar, soya bean, frozen concentrated orange juice (FCOJ), grains, livestock • change in demand • change in production, weather • holding and delivery costs • political or strategic

Base and Precious Metals :
know the main base and precious metals and the influences on price: • copper, nickel, aluminium, zinc, tin, lead, gold, silver, platinum and palladium • change in demand • change in production • marginal costs of mining • political or strategic • holding and delivery costs

Energy :
know the main energy products and the influences on price (crude oil, electricity and natural gas): • change in demand • change in production • marginal costs of production • holding and delivery costs • political or strategic

Crypto Assets :
Know the principal features and characteristics of cryptocurrencies and digital assets: • currencies, coins, non-fungible tokens • central control • use of distributed ledger technologies

know some of the other markets: • freight • emissions • weather • volatility

Exchanges and OTC Trading :
know the main products of the main exchanges
know the exchange membership structures (brokers, dealers and broker / dealers) and their principal rights: • executing trades for third parties • executing trades for their own account • executing trades for other members • capacity as broker • capacity as dealer
know the basic structure of OTC markets

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