Free CISI IAD Securities mock exam
Sit the whole Securities paper: 80 questions running from money markets and gilts to portfolio construction, under a two-hour clock. Free, no sign-up, with a weighted score and an explanation for every answer.
Looking for the Level 3 Capital Markets Securities mock?What is on the CISI IAD Securities mock exam?
One full Investment Advice Diploma Securities practice paper: 80 questions in 120 minutes, weighted across the eight syllabus elements exactly as the real paper is. Score 56 out of 80 to meet the 70% practice threshold, then review every answer one at a time.
- Questions
- 80 original practice questions
- Time
- 120 minutes
- Practice threshold
- 70%, which is 56 of 80
- Access
- Free, with no account or card
How the paper is weighted
Securities is a technical unit of the CISI Level 4 Investment Advice Diploma, and it is not the Level 3 Capital Markets Programme paper of the same name. Eight elements share 80 questions, and two of them take half of those questions between them.
| Element | Questions |
|---|---|
| 1. Cash, Money Markets and the Foreign Exchange Market | 5 |
| 2. Fixed-Income Securities | 20 |
| 3. Equities | 20 |
| 4. Collective Investments | 8 |
| 5. Settlement, Safe Custody and Prime Brokerage | 7 |
| 6. Securities Analysis | 8 |
| 7. Portfolio Construction | 8 |
| 8. Investment Selection and Administration | 4 |
| Total | 80 |
Fixed-Income Securities and Equities are 20 marks each, 40 of the 80 together. Collective Investments, Securities Analysis and Portfolio Construction are eight apiece, Settlement, Safe Custody and Prime Brokerage is seven, Cash, Money Markets and the Foreign Exchange Market is five, and Investment Selection and Administration is four.
For the cleanest rehearsal, set aside the full 120 minutes, avoid notes and answer every question. There is no negative marking on the real paper, so a guess is always better than a blank. The mock hides feedback until submission and warns you before handing in a paper with blanks.
Full practice paper
80 questions. 120 minutes. No sign-up.
Sit the paper in one go if you can. Answers and explanations stay hidden until you submit, so the score is a more useful rehearsal than an instant-feedback quiz.
The timer starts when you press the button. Reloading or leaving the page ends this sitting.
Sample IAD Securities questions, with answers
8 questions at the standard of the paper above, weighted towards the elements that carry the most marks. Pick an answer to see whether you were right and why. None of these appear in the timed mock, so working through them first costs you nothing when you sit it.
Hartwell Estates plc wants a short-dated instrument paying no coupon and guaranteed by the UK government. Which is most appropriate?
Not quite. The answer is D.
A Treasury bill is a short-term instrument guaranteed by the UK government which pays no coupon, since it is sold at a discount to nominal value and redeemed at par, making that discount the whole of the investor's return. Commercial paper is also issued at a discount and repaid at face value, but it is an obligation of the issuing company or conduit and so carries credit risk that a government-guaranteed bill does not. Treasury bills are issued at a weekly tender held by the Debt Management Office, not bought from the Bank of England, which runs its own money market operations in other instruments.
In which of the following ways is a convertible bondholder compensated for a lower coupon?
Not quite. The answer is B.
A convertible bond will typically pay a lower coupon because the holder is compensated by an option to convert into the equity of the issuer, by convention its ordinary shares in a given conversion ratio. The right may be exercisable during a conversion window or only on maturity, and it gives the holder a share in any growth in the issuer's equity. Convertibles are often subordinated, so senior creditors must be settled in full before holders receive anything on an insolvency, which rules out priority over the issuer's other creditors. The compensation lies in the conversion right rather than in a charge over specified assets or a coupon that steps up later in the bond's life.
Buying by a crowd of speculative investors drives a share ever higher until sentiment suddenly changes. The consequence is that:
Not quite. The answer is D.
Speculative investors often buy particular shares in the hope of taking advantage of a rising trend in prices. As more investors buy, prices are driven higher still, which may encourage further buying. The process cannot continue indefinitely, and eventually the bubble bursts when prices fall back and there is a sudden change in sentiment. The fall in prices can then be as steep as the original rise, and that those who bought at the highest prices will suffer losses.
In which of the following does an excess of investors' sales over purchases result for an ICVC?
Not quite. The answer is B.
An ICVC is open-ended, so when investors sell back more shares than others buy, the shares are cancelled, the number in issue falls and the fund must pay out cash, which may force the managers to sell investments at a poor time. New shares are created only when investors subscribe, so an excess of sales reduces the number in issue rather than adding to it. Investors sell their shares back to the company rather than to buyers on an exchange, and the price stays in line with net asset value, so it does not move to a discount as a closed-ended investment trust's shares can.
Which statement is true of two member firms that deal on a trading system with a central counterparty?
Not quite. The answer is C.
Where a trading system provides a central counterparty, the central counterparty takes responsibility for settling the transaction with both sides, so the two firms settle with it and not with one another, and they remain anonymous to each other throughout. Margin is lodged with the central counterparty that carries the risk, not with the operator of the trading system, and the exchange takes on no obligation to deliver the shares.
Shares in a technology company trade at £3.20, with earnings per share of 16p for the last twelve months and a dividend of 8p. What is the price/earnings ratio?
Not quite. The answer is C.
The price/earnings ratio divides the share price by the earnings per share, so £3.20 divided by 16p gives a multiple of 20.0. Substituting the dividend of 8p for earnings doubles the multiple, dividing the dividend by the price gives the dividend yield instead, and dividing earnings by the dividend gives dividend cover. Only the earnings figure belongs in the denominator of this ratio.
Which of the following countries would suit an investor seeking exposure to commodity-based economies?
Not quite. The answer is D.
Geographical allocation blends countries whose economies have attributes different from the investor's own market, so that the economic cycles do not coincide. An investor who favours commodity-based economies wants exposure to countries whose output and exports are dominated by natural resources, which is why Australia and South Africa fit that brief. Exposure to the semiconductor industry or computer hardware points instead to South Korea or Taiwan, while the United States, the United Kingdom and Japan are the large public deficit economies contrasted with China's large surplus.
Meeting a client's withdrawal from cash and money market holdings makes which of the following necessary?
Not quite. The answer is B.
Where the portfolio already holds an adequate allocation of cash and short-term money market instruments, the immediate need is absorbed and no longer-dated holding has to be sold at a bad moment. What the withdrawal still does is alter the balance of the assets that remain, so a rebalancing exercise is required at some future point to restore the intended spread. A withdrawal met from the liquid allocation does not of itself call for a new strategic allocation.
Where the marks go on this paper
Two elements decide this paper. Fixed-Income Securities is 20 marks on issuance and redemption structures, index-linked gilts and floating rate notes, clean and dirty prices and accrued interest, running yield against gross redemption yield, duration, the shape of the yield curve, and the credit, inflation and liquidity risks behind all of it. It is also the only part of the syllabus that behaves like arithmetic rather than memory.
Equities is the other 20, and it is the easier one to under-prepare because it feels familiar. Ordinary and preference shares and the rights attached to each, primary issuance, order-driven and quote-driven trading, depositary receipts, indices, and the corporate actions candidates most often reverse: rights issues against bonus issues, and cum-dividend against ex-dividend.
Securities Analysis and Portfolio Construction are eight each, and together they are where the paper stops describing instruments and starts asking you to judge them. Ratios, statements and valuation on one side; correlation, the efficient frontier, beta and asset allocation on the other. Collective Investments is another eight and turns almost entirely on telling one fund structure from another.
Cash, Money Markets and the Foreign Exchange Market is five marks and Investment Selection and Administration is four. Nine marks between them, more than a tenth of the paper, and both are short enough to learn properly in an evening. Settlement, Safe Custody and Prime Brokerage is seven, and it is the element advisers have least day-to-day contact with.
How to use your result
Treat 70% as a practice threshold, not a readiness promise. A stronger signal is a run of timed scores above the threshold with no element repeatedly falling behind. On an 80-question paper each question is 1.25 percentage points, so no single question matters much and a whole weak element matters a great deal. If Fixed-Income Securities and Equities are both under 70%, the total cannot recover from it: they are half the paper.
Use the answer review to understand each miss, then revisit the relevant part of the IAD Securities exam guide. To drill a single topic rather than sit a whole paper, start with the free IAD Securities practice questions.
Looking for official material? IAD Securities past papers: what actually exists explains what CISI actually publishes and how to combine it with question practice. For more full papers, see the paid plans, from £59.
Independent practice material: PasskeyPrep is not affiliated with, endorsed by or accredited by the Chartered Institute for Securities & Investment. These questions were written independently against the syllabus. They are not copied from a live CISI exam or official past paper.
Frequently asked questions
Is this IAD Securities mock exam really free?
Yes. All 80 questions are free, with no account, email address or card. Submit and you get a weighted score, an eight-element breakdown and an explanation for every answer.
Does this mock match the real Securities exam format?
It uses 80 questions, a 120-minute timer, a 70% practice threshold and the element weightings set out for the paper. The questions are original PasskeyPrep practice material, not the CISI examination platform or official exam questions.
Which Securities paper is this?
The Securities unit of the CISI Level 4 Investment Advice Diploma, written against workbook Edition 16 and syllabus version 16.1, which covers exams sat up to 30 December 2026. It is not the Securities unit of the Level 3 Capital Markets Programme, which is a different level with a different workbook.
How does it fit with the other Investment Advice Diploma units?
Securities is the technical unit on instruments, analysis and portfolios. PasskeyPrep also covers UK Regulation and Professional Integrity, Investment Risk and Taxation, and Financial Planning and Advice, so the whole diploma can be revised in one place.
Turn the element breakdown into a study plan.
Unlock the full IAD Securities question bank, more timed mocks, study notes, flashcards and weak-spot tracking as part of a paid pass: £59 for this paper, or £89 for all fourteen.