CISI IAD Cheat Sheet 2026

The 30 highest-yield CISI IAD facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. A bond with a face value of £1,000, a coupon rate of 5% and a current market price of £950 has a current yield of approximately: → 5.26%
2. In the context of bond markets, what is 'duration matching' (immunisation) used for? → Aligning the duration of assets and liabilities to protect against interest rate movements
3. A 'callable bond' gives which party the right to redeem the bond before maturity? → The issuer
4. Which of the following statements about 'gilts' is correct? → They are UK government bonds issued by HM Treasury
5. Which of the following investments is exempt from UK Income Tax? → Returns from a qualifying Venture Capital Trust (VCT)
6. Which of the following best describes a 'convertible bond'? → A bond that gives the holder the right to convert into a specified number of equity shares
7. When conducting a fact-find for a new client, which of the following is LEAST likely to be relevant? → The make and model of the client's car
8. What is the primary purpose of the Debt Management Office (DMO) in the UK? → To manage the UK Government's debt portfolio and issue gilts
9. For UK tax purposes, how are offshore funds that do not have 'reporting fund' status taxed on disposal? → Gains are taxed as income at the investor's marginal income tax rate
10. What is the annual allowance for pension contributions that receive tax relief for most individuals in 2025/26? → £60,000
11. A 'zero coupon bond' is best described as: → A bond issued at a discount that pays no periodic interest
12. Which of the following best describes the 'risk-free rate' in the context of UK investment analysis? → The yield on UK Government gilts
13. Which of the following activities would require a firm to conduct a full suitability assessment under FCA rules? → Providing a personal recommendation to invest in a specific fund
14. What is the impact of rising interest rates on the price of existing fixed-rate bonds? → Bond prices fall as new bonds offer higher yields
15. Modified duration measures a bond's approximate price change for a: → 1% (100 basis point) change in yield
16. What is the relationship between bond prices and interest rates? → They move in opposite directions
17. A client aged 40 with a high risk tolerance and a 25-year investment horizon is saving for retirement. Which asset allocation is MOST appropriate? → 70-80% equities (globally diversified), 15-20% bonds, 5-10% alternatives
18. What is the maximum compensation limit per person per firm under the Financial Services Compensation Scheme (FSCS) for investment claims? → Up to £85,000
19. Which type of UK government bond is designed to protect investors against inflation? → Index-linked gilts
20. What is a 'floating rate note' (FRN)? → A bond whose coupon payments reset periodically based on a reference rate such as SONIA
21. Under MiFID II, what is the maximum period for which a firm must retain records of client suitability assessments? → At least 5 years, or the duration of the relationship plus 5 years for ongoing services
22. Which credit rating is considered the lowest investment-grade rating by Standard & Poor's? → BBB-
23. In the context of Modern Portfolio Theory, what does the 'efficient frontier' represent? → The set of portfolios offering the highest expected return for each level of risk
24. What does 'basis risk' refer to in fixed income markets? → The risk that the yield spread between two related instruments changes unexpectedly
25. An 'inverted yield curve' typically signals: → Expectations of falling interest rates or an impending economic slowdown
26. Which of the following best describes the yield curve in normal economic conditions? → Long-term yields are higher than short-term yields
27. What is the current annual exempt amount for Capital Gains Tax (CGT) for individuals in the UK for 2025/26? → £3,000
28. What does the Sharpe ratio measure? → The risk-adjusted return of a portfolio relative to the risk-free rate
29. A client has a portfolio with a beta of 1.5. If the FTSE 100 falls by 10%, what is the expected portfolio decline based on beta alone? → 15%
30. Which economic indicator is most commonly used to measure inflation in the UK for the purpose of the Bank of England's monetary policy target? → Consumer Price Index (CPI)