CISI UK REGULATION
PROFESSIONAL
INTEGRITY V18 PRACTICE
EXAM COMPLETE 80
QUESTIONS
Question 1: A company sells newly issued shares to investors to raise fresh capital. In which market does this transaction take place?
Choices:
1) Primary market 2) Secondary market 3) Money market only 4) Derivatives market
Correct Answer: Primary market
Explanation: A primary market is where new securities are issued and the proceeds are raised for the issuer. Secondary markets are where existing securities are traded between investors.Page 1
Question 2: Which action is an example of UK �scal policy rather than monetary policy?
Choices:
1) Changing the Bank Rate 2) Changing government taxation and spending 3) Conducting open-market liquidity operations 4) Changing bank reserve requirements
Correct Answer: Changing government taxation and spending
Explanation: Fiscal policy concerns government taxation, borrowing and public expenditure.Monetary policy is primarily implemented through the Bank of England and includes interest- rate decisions.Question 3: A household wants to reduce the �nancial impact of a breadwinner dying unexpectedly. Which �nancial need is being addressed most directly?
Choices:
1) Liquidity management 2) Financial protection 3) Estate administration only 4) Market speculation
Correct Answer: Financial protection
Explanation: Life assurance and related protection products are designed to reduce the �nancial consequences of events such as death or serious illness.Page 2
Question 4: Which body is principally responsible for prudential regulation of major UK banks, building societies, credit unions, insurers and certain investment �rms?
Choices:
1) Financial Conduct Authority 2) Prudential Regulation Authority 3) Financial Ombudsman Service 4) Competition and Markets Authority
Correct Answer: Prudential Regulation Authority
Explanation: The PRA is the prudential regulator for banks, building societies, credit unions, insurers and certain major investment �rms. The FCA focuses primarily on conduct and market integrity across a wider range of �rms.
Question 5: What is the principal focus of the Payment Systems Regulator?
Choices:
1) Setting income tax rates 2) Regulating payment systems to promote competition, innovation and service-user interests 3) Determining compensation for investment complaints 4) Authorising all occupational pension schemes Correct Answer: Regulating payment systems to promote competition, innovation and service-user interests Explanation: The Payment Systems Regulator oversees designated payment systems and seeks to promote e�ective competition, innovation and the interests of service users.Page 3